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Portfolio Management Service (PMS) – FAQ (Frequently Asked Questions)

What is a PMS?

 

A PMS (Portfolio Management Service) is a service offered to investors wanting to invest in the Indian stock markets on the basis of expert knowledge, research and experience.

 

Who can use a PMS?

 

A PMS service can be used by an investor who wants to invest in the Indian stock
markets and benefit from India's economic growth, but doesn't have the necessary time,
knowledge or experience to do so.

 

How is a PMS different from a Mutual Fund?

 

A PMS is more transparent than a Mutual Fund as the stocks purchased are in your name. The cost structure of the PMS is also more competitive and thus give you the opportunity to make higher returns.

 

Can everyone invest in a PMS?

 

While a Mutual Fund is open to everybody, a PMS is more selective and the minimum amount needed to invest is higher. It is meant for more sophisticated investors looking for exponential returns.

 

What are the types of returns I can expect?

 

Returns vary on the basis of your needs and investment profile. On an average, looking
at India's economic growth, you can expect returns in the range of 45%-55% per year
over the next ten years. The returns depend also on your PMS fund manager and
according to SEBI regulation cannot be guaranteed.

 

What all PMS services are available in India?

 

There are various PMS services available in India such as Kotak Portfolio Management
Services (Kotak Securities) Reliance Portfolio Management Services, ICICI Portfolio
Management Services and FAMS Portfolio Management Services amongst others.

 

How do I choose which PMS to invest in?

 

Invest with someone who philosophy of investing matches your outlook. If you believe in
long term investing on the basis of knowledge, don't invest with a fund manager who
believes in daily trading and speculation.

 

Which PMS has given the best returns?

 

Due to the private nature of the fund management industry, it is difficult to say which is

the best PMS service has given the best and maximum returns.

 

How does the PMS work?

 

A new bank account, DP and trading account are opened in your name and then it is
professionally managed by your PMS Fund Manager. Your PMS fund manager will
have a specific POA (Power of Attorney) to manage this account.

 

Whose names will the stocks be in?

 

Stocks will be in your personal name and not in the name of your PMS manager. All dividends will also be directly credited into your account. Your stocks will be held in Demat form (electronic form) in your name and can be accessed by you at anytime.

 

What about the funds I invest?

 

The funds you invest will be kept in a new bank account opened in your own name.

 

Will I be able to see what stocks are being bought and sold?

 

Yes, the PMS system is completely transparent and you will get to know what is being

done with your funds.

 

Can I access my funds whenever I need them?

 

Yes, you can access your funds anytime you want by giving prior intimation. There is no

lock-in-period.

 

Can I also transfer my existing shares to the new PMS account?

 

Yes, you can transfer your existing shares to your new PMS account and have it

managed professionally.

 

How do performance based fees work?

 

Performance based fees ensure your fund manager is motivated to maximize your

returns. Based on the returns given, performance based fees are charged.

 

Will I get a receipt for the charges?

 

Yes, you shall get a receipt for all charges. The PMS operates under very strict
regulatory norms laid down by SEBI (Securities and Exchange Board of India), BSE
(Bombay Stock Exchange), NSE (National Stock Exchange) and all other regulatory
authorities.

 

Can Non-resident Indian (NRIs) invest in a PMS?

 

Yes, NRIs can invest in a PMS. For that they will need to also open a PIS (Portfolio
Investment Scheme) account, for this permission from RBI(Reserve Bank of India)
needs to be taken. This documentation and permission will be handled by your PMS
manager. The documents can be sent across to anywhere in the world and you don't
need to be present physically in India.

 

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Also, know how to buy mutual funds online:

 

Invest in DSP BlackRock Mutual Funds Online

 

Invest in Reliance Mutual Funds Online

 

Invest in HDFC Mutual Funds Online

 

Invest in Sundaram Mutual Funds Online

 

Invest in Birla Sunlife Mutual Funds Online

 

Invest in IDFC Mutual Funds Online

 

Invest in UTI Mutual Funds Online

  

Invest in SBI Mutual Funds Online

 

Invest in L&T Mutual Funds Online

 

Invest in Edelweiss Mutual Funds Online

 

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