Frequently Asked Questions (FAQs) – SEBI Portfolio Management Services (PMS)

Everything you want to know about Portfolio Management Services (PMS)

Frequently Asked Questions – Portfolio Management Services (PMS)

1. What is Portfolio Management Services (PMS)?

   PMS is a specialized investment service where a professional portfolio manager manages your money by investing in equities, debt, or a mix of securities. The investment strategy is customized based on your financial goals, risk profile, and investment horizon.

2. How is PMS different from Mutual Funds?

   a) Ownership: In PMS, you own individual stocks; in mutual funds, you own units of a pooled fund.

   b) Customization: PMS is tailored to your investment profile.

   c) Transparency: PMS offers detailed reports and real-time access to your portfolio.

   d) Ticket Size: PMS requires a minimum investment of ₹50 lakhs (as per SEBI), while mutual funds have no such requirement.

3. Who can invest in PMS?

   Any Indian Resident, High Net-Worth Individual (HNI), Non-Resident Indian (NRI), or Corporate entity can invest, provided the minimum investment is ₹50 lakhs.

4. Is PMS regulated by SEBI?

   Yes. All PMS providers must be registered with the Securities and Exchange Board of India (SEBI) and adhere to its strict regulatory framework to protect investors.

5. What are the types of PMS?

   a) Discretionary PMS: The portfolio manager takes all investment decisions.

   b) Non-Discretionary PMS: You make the final decision based on the manager’s recommendations.

   c) Advisory PMS: The manager provides advice; execution is your responsibility.

6. What is the minimum investment required?

   As per SEBI guidelines, the minimum investment in PMS is ₹50 lakhs, either in the form of cash or listed securities.

7. What is the fee structure in PMS?

   Fee models may include:

   a) Fixed Fee (e.g., 1–2% annually on AUM)

   b) Performance-Based Fee (charged as a percentage of profits above a hurdle rate)

   c) Additional costs may include brokerage, custodian, and audit fees.

8. Are returns from PMS guaranteed?

   No. PMS returns are not guaranteed and are subject to market risks, just like any equity investment. However, they are managed professionally with a clear strategy and active risk management.

9. How is performance reported in PMS?

   You’ll receive:

   a) Regular portfolio statements

   b) Capital gains reports

   c) Audited annual reports Many PMS platforms also offer online dashboards for real-time tracking.

10. Can NRIs invest in PMS?

    Yes, NRIs can invest in PMS through NRE/NRO accounts and a Portfolio Investment Scheme (PIS) account, subject to RBI and FEMA regulations.

11.  What are the tax implications in PMS?

    Gains from PMS are taxed like direct equity investments:

    a) Short-Term Capital Gains (STCG): 15%

    b) Long-Term Capital Gains (LTCG): 10% beyond ₹1 lakh/year
    c) PMS providers also offer detailed tax statements to simplify filing.

12. How can Kuber Capital help with PMS?

    At Kuber Capital, we:

    a) Assess your goals and risk profile

    b) Connect you with top SEBI-registered PMS providers

    c) Assist with onboarding and documentation

    d) Provide ongoing performance tracking and rebalancing support