Financial Awareness Series
Portfolio Management Services (PMS)
A SEBI-regulated investment service where a professional portfolio manager directly manages an individual's securities portfolio — tailored to their goals, risk profile, and financial situation.
What is Portfolio Management Services (PMS)?
Portfolio Management Services (PMS) is a professionally managed investment service where a SEBI-registered Portfolio Manager manages your investment portfolio directly in your name. Unlike mutual funds where all investors share a pooled fund, PMS gives you a personalised portfolio of stocks, bonds, or other securities held in your individual demat account.
PMS is designed for investors with higher investible surplus who want a customised, actively managed approach to wealth creation.
Why is RxT Introducing This?
At RxT, we believe in financial awareness before financial action. PMS is often misunderstood or confused with mutual funds. Knowing what it is — and what it is not — helps you make better-informed decisions.
Offers a personalised, actively managed portfolio
Suitable for investors with significant investible surplus
Provides direct ownership of securities in your name
⚠️ PMS is not suitable for all investors. It requires a minimum investment of ₹50 lakhs as mandated by SEBI.
How PMS Differs from Mutual Funds
Mutual Funds
- •Pooled investment — all investors share one fund
- •Units are held in your folio
- •Minimum investment can be as low as ₹500
- •Less customisation — same portfolio for all investors
- •SEBI-regulated under AMC framework
PMS
- •Individual portfolio — securities held in your demat
- •Direct ownership of each stock/bond
- •Minimum investment of ₹50 lakhs (SEBI mandate)
- •Fully customised to your goals and risk profile
- •SEBI-regulated under Portfolio Manager regulations
Types of PMS
Discretionary PMS
The portfolio manager has full authority to make investment decisions on your behalf. You set the objectives and risk tolerance — the manager handles execution.
Non-Discretionary PMS
The portfolio manager suggests investments but the final execution requires your approval for each transaction. You stay in control of every decision.
Advisory PMS
The portfolio manager only provides advice. You are responsible for executing all trades yourself through your broker. Lower fees, higher involvement.
How Does PMS Work?
You open a separate demat and trading account with the portfolio manager
Complete KYC, risk profiling, and sign the portfolio management agreement
Transfer a minimum of ₹50 lakhs to the designated account
The portfolio manager constructs and manages your portfolio based on your agreed strategy
Regular reports and transparent statements are shared — you can view your holdings anytime
Portfolio is periodically reviewed and rebalanced based on market conditions and your objectives
What to Check Before Choosing a PMS Provider
SEBI registration number of the portfolio manager
Track record and performance across different market cycles
Fee structure — fixed fees, profit-sharing, or hybrid
Investment strategy and philosophy (value, growth, quant, etc.)
Portfolio concentration and diversification approach
Communication frequency and transparency of reporting
Lock-in period and exit load, if any
Minimum investment requirement and additional investment norms
Risk Factors to Understand
PMS investments carry market risks and are not suitable for risk-averse investors.
Market Risk
PMS portfolios are subject to market volatility. Returns are not guaranteed and the value of your portfolio can go down.
Concentration Risk
Some PMS strategies hold a concentrated portfolio of 15–25 stocks, which can lead to higher volatility compared to diversified mutual funds.
Manager Risk
Performance depends heavily on the portfolio manager's skill and decision-making. Past performance does not guarantee future results.
Liquidity Risk
Certain strategies or securities within a PMS may have limited liquidity, making it difficult to exit quickly without impacting price.
RxT's Perspective
PMS is a powerful tool for the right investor — but it is not for everyone. At RxT, we first help you understand your financial foundation, goals, and readiness before evaluating whether PMS makes sense for your situation. We introduce this as part of our commitment to financial awareness before financial action.
Important Disclaimer
- •PMS investments are subject to market risk. Returns are not guaranteed.
- •RxT does not provide PMS services directly and is not a SEBI-registered Portfolio Manager.
- •This content is for educational purposes only and does not constitute investment advice.
- •The minimum investment amount in PMS is ₹50 lakhs as per SEBI regulations.
- •Consult a SEBI-registered investment advisor before making any investment decisions.