Introduction

India’s wealth management landscape has transformed rapidly in the last two decades. Once seen as an elite product for ultra-rich investors, Portfolio Management Services (PMS) are now gaining wider acceptance among affluent investors looking for personalised strategies.

The numbers speak volumes. PMS assets under management (AUM) surged from ₹7.3 lakh crore in 2014 to over ₹32 lakh crore in 2024. With rising financial literacy, technology-driven platforms, and more high-net-worth individuals (HNIs), PMS has become a powerful vehicle for wealth creation.

But here’s the real question: Which PMS style is right for you? To answer that, let’s explore the 3 types of PMS in India – Discretionary, Non-Discretionary, and Advisory – and understand the key differences.

What Are Portfolio Management Services (PMS)?

In simple terms, PMS is like hiring a personal chef for your investments. Instead of following the same recipe (mutual funds) as everyone else, PMS tailors a portfolio based on your unique risk appetite, goals, and investment horizon.

Unlike mutual funds where money is pooled, PMS portfolios are managed individually. SEBI mandates a minimum investment of ₹50 lakh to ensure PMS remains targeted at HNIs.

India’s PMS Growth Story

The evolution of PMS in India can be divided into three phases:

Phase Key Highlights
1990s – Early 2000s PMS was a luxury for the ultra-wealthy. Limited access, low transparency, and evolving regulations.
Mid-2000s – 2015 SEBI introduced stricter rules on disclosures and reporting, boosting investor trust. Tech adoption began.
2015 – Present Surge in HNIs, fintech integration, and rising demand for customised strategies. PMS AUM crossed ₹32 lakh crore in 2024.

According to a study, the PMS and AIF industry is projected to grow at 26% CAGR, touching ₹43 lakh crore by 2028.

Clearly, PMS is no longer a niche—it’s becoming mainstream in India’s wealth management story.

The Three Types of PMS in India

1. Discretionary PMS

In Discretionary PMS, the portfolio manager has full authority to make buy/sell decisions on your behalf.

  • Who it suits: Investors who want experts to actively manage their money without needing to approve every decision.
  • Pros: Saves time, leverages professional expertise, dynamic decision-making.
  • Cons: Limited investor control, depends heavily on manager’s skill.

💡 Think of it as handing the steering wheel entirely to a professional driver.

2. Non-Discretionary PMS

In Non-Discretionary PMS, the manager suggests trades, but the investor must approve them before execution.

  • Who it suits: Investors who want to stay in control but still value expert guidance.
  • Pros: Active involvement, tailored advice, flexibility.
  • Cons: Decision-making can be slower; emotional biases may creep in.

💡 This is like driving your car with Google Maps guidance—you get advice but decide the final route.

3. Advisory PMS

In Advisory PMS, the manager only provides recommendations. The investor executes trades directly in their account.

  • Who it suits: Experienced investors who want insights but prefer to control execution.
  • Pros: Full control, access to expert insights.
  • Cons: Execution responsibility lies with the investor, requires strong market knowledge.

💡 This is like having a personal trainer—you get expert advice, but you must do the workout yourself.

Key Differences Between Discretionary and Non-Discretionary PMS

Feature Discretionary PMS Non-Discretionary PMS
Decision-making Manager has full control Investor approves each trade
Investor involvement Minimal High
Speed of execution Fast Slower
Control Low High
Suitability Busy HNIs, trust professionals fully Investors who like to stay involved

Which PMS Style Suits You Best?

  • Choose Discretionary PMSif you:
    • Are a busy professional or entrepreneur.
    • Prefer delegating decisions to experts.
    • Value performance and speed over control.
  • Choose Non-Discretionary PMSif you:
    • Like staying involved in decision-making.
    • Have time to review recommendations.
    • Prefer a collaborative style with your manager.
  • Choose Advisory PMSif you:
    • Are a seasoned investor with market knowledge.
    • Want to retain control of execution.
    • Need expert inputs but enjoy managing trades.

Additional Insights: PMS vs Mutual Funds

While both PMS and mutual funds are managed by professionals, they differ:

Aspect PMS Mutual Funds
Minimum Investment ₹50 lakh As low as ₹500
Portfolio Type Customised Common pool
Control High (depends on type) None
Suitability HNIs looking for tailored solutions Retail investors

A PMS Bazaar analysis (2023) revealed PMS strategies outperformed benchmarks by an average of 70%, compared to 48% for mutual funds.

Bottom Line

India’s PMS industry has come a long way—from an exclusive product for the wealthy to a structured, tech-driven wealth management solution.

Understanding the differences between Discretionary, Non-Discretionary, and Advisory PMS is crucial before investing. The right choice depends on your risk appetite, involvement preference, and financial goals.

At Dezerv, we simplify complex wealth management decisions. If you’re evaluating PMS options, our experts can help you identify which investment style suits you best.

📞 Call us today to book an expert consultation.

Frequently Asked Questions

Q1. What is the minimum investment required for PMS in India?
 The SEBI-mandated minimum is ₹50 lakh, ensuring PMS is tailored for HNIs.

Q2. Which is better: PMS or mutual funds?
 It depends on your needs. PMS offers customized strategies and higher potential returns but requires higher investment. Mutual funds suit retail investors with smaller ticket sizes.

Q3. Is PMS safe?
 Like all market-linked investments, PMS carries risks. However, SEBI regulations and professional management add transparency and accountability.

Q4. Which PMS type gives the highest returns?
 Returns depend on the portfolio manager’s strategy, market conditions, and your chosen PMS type. Historically, Discretionary PMS has been popular due to faster execution.

Q5. Can senior citizens invest in PMS?
 Yes, provided they meet the minimum ticket size. Many opt for PMS with systematic withdrawal plans (SWPs) for regular income.

Disclaimer

Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. PMS investments are also subject to market risks and require careful evaluation of objectives and risks. The information provided is for educational purposes only and should not be construed as investment advice. Please consult your financial advisor before making any investment decisions.