PMS minimum investment stays at ₹50 lakh: Who gets access to professional wealth management?
Under the new framework, portfolio managers cannot accept funds or securities worth less than ₹50 lakh from a client. However, this minimum investment requirement does not apply to accredited investors, subject to appropriate disclosures in the disclosure documents.
- Oct 13, 2026,
- Updated Oct 13, 2026 7:05 AM IST
The Securities and Exchange Board of India (SEBI) has retained the minimum investment requirement of ₹50 lakh per client under its new Portfolio Managers Regulations, 2026, keeping portfolio management services (PMS) largely targeted at wealthy investors.
The regulations, notified on October 7, 2026, will come into effect on April 1, 2027. They set out the rules governing portfolio managers, including their registration, operations, fees and responsibilities towards clients.
Under the new framework, portfolio managers cannot accept funds or securities worth less than ₹50 lakh from a client. However, this minimum investment requirement does not apply to accredited investors, subject to appropriate disclosures in the disclosure documents and terms agreed between the investor and the portfolio manager.
What changes under the new rules?
SEBI's regulations also tighten requirements around fees and investor protection. Portfolio managers cannot charge upfront fees, directly or indirectly. They may charge fixed fees, return-based fees or a combination of both, but must disclose the range of fees under different heads.
Managers must also maintain separate accounts for clients' securities and keep client funds in a separate account with a scheduled commercial bank. Investor grievances must be addressed within 21 calendar days of receipt.
These requirements are intended to strengthen transparency and accountability in the PMS industry, although their impact on investor experience will depend on implementation and compliance.
PMS regulations 2026: Key highlights
| Parameter | Key details |
|---|---|
| Minimum investment in conventional PMS | ₹50 lakh per client |
| Accredited investors | Exempt from the minimum, subject to prescribed disclosures and agreed terms |
| Effective date | April 1, 2027 |
| Discretionary PMS | Manager makes investment decisions independently under the client agreement |
| Non-discretionary PMS | Manager follows the client's directions |
| Upfront fees | Prohibited, directly or indirectly |
| Permitted fee models | Fixed fee, return-based fee or a combination |
| Fee disclosure | Range of fees under different heads must be disclosed Advertisement |
| Investor grievance redressal | Within 21 calendar days of receiving a complaint |
| Client securities | Must be held in separate accounts |
| Client funds | Must be maintained in a separate account with a scheduled commercial bank |
| Mutual fund-based PMS (PRIM) | Separate framework with a ₹25 lakh minimum investment per client |
| Minimum net worth for managers exclusively offering PRIM | ₹2 crore |
How PMS differs from mutual funds
PMS allows investors to have their portfolios managed by a professional manager under an agreement specifying the services and investment approach. Under discretionary PMS, the manager makes investment decisions independently according to the client's needs. In non-discretionary PMS, the manager acts according to the client's directions.
The ₹50 lakh threshold means investors need substantial capital to access conventional PMS. Mutual funds, by comparison, offer investors a way to access professionally managed portfolios without meeting this PMS-specific minimum investment requirement.
For investors, the choice between the two depends on factors such as investment objectives, costs, risk tolerance and the level of portfolio management they require.
A separate route for mutual fund-based PMS
The regulations introduce a separate framework called the Portfolio Management Service Route for Investment in Mutual Fund Units (PRIM). For managers exclusively offering this service, the rules prescribe a minimum net worth of ₹2 crore and a minimum investment of ₹25 lakh per client.
This creates a distinct route with a lower minimum investment threshold than conventional PMS, but it does not replace the ₹50 lakh requirement for regular portfolio management services.
Ultimately, SEBI's new framework preserves the high entry threshold for conventional PMS while introducing a separate mutual fund-based route. Investors will need to assess the services, fees, risks and eligibility conditions before deciding which investment option suits them.
The Securities and Exchange Board of India (SEBI) has retained the minimum investment requirement of ₹50 lakh per client under its new Portfolio Managers Regulations, 2026, keeping portfolio management services (PMS) largely targeted at wealthy investors.
The regulations, notified on October 7, 2026, will come into effect on April 1, 2027. They set out the rules governing portfolio managers, including their registration, operations, fees and responsibilities towards clients.
Under the new framework, portfolio managers cannot accept funds or securities worth less than ₹50 lakh from a client. However, this minimum investment requirement does not apply to accredited investors, subject to appropriate disclosures in the disclosure documents and terms agreed between the investor and the portfolio manager.
What changes under the new rules?
SEBI's regulations also tighten requirements around fees and investor protection. Portfolio managers cannot charge upfront fees, directly or indirectly. They may charge fixed fees, return-based fees or a combination of both, but must disclose the range of fees under different heads.
Managers must also maintain separate accounts for clients' securities and keep client funds in a separate account with a scheduled commercial bank. Investor grievances must be addressed within 21 calendar days of receipt.
These requirements are intended to strengthen transparency and accountability in the PMS industry, although their impact on investor experience will depend on implementation and compliance.
PMS regulations 2026: Key highlights
| Parameter | Key details |
|---|---|
| Minimum investment in conventional PMS | ₹50 lakh per client |
| Accredited investors | Exempt from the minimum, subject to prescribed disclosures and agreed terms |
| Effective date | April 1, 2027 |
| Discretionary PMS | Manager makes investment decisions independently under the client agreement |
| Non-discretionary PMS | Manager follows the client's directions |
| Upfront fees | Prohibited, directly or indirectly |
| Permitted fee models | Fixed fee, return-based fee or a combination |
| Fee disclosure | Range of fees under different heads must be disclosed Advertisement |
| Investor grievance redressal | Within 21 calendar days of receiving a complaint |
| Client securities | Must be held in separate accounts |
| Client funds | Must be maintained in a separate account with a scheduled commercial bank |
| Mutual fund-based PMS (PRIM) | Separate framework with a ₹25 lakh minimum investment per client |
| Minimum net worth for managers exclusively offering PRIM | ₹2 crore |
How PMS differs from mutual funds
PMS allows investors to have their portfolios managed by a professional manager under an agreement specifying the services and investment approach. Under discretionary PMS, the manager makes investment decisions independently according to the client's needs. In non-discretionary PMS, the manager acts according to the client's directions.
The ₹50 lakh threshold means investors need substantial capital to access conventional PMS. Mutual funds, by comparison, offer investors a way to access professionally managed portfolios without meeting this PMS-specific minimum investment requirement.
For investors, the choice between the two depends on factors such as investment objectives, costs, risk tolerance and the level of portfolio management they require.
A separate route for mutual fund-based PMS
The regulations introduce a separate framework called the Portfolio Management Service Route for Investment in Mutual Fund Units (PRIM). For managers exclusively offering this service, the rules prescribe a minimum net worth of ₹2 crore and a minimum investment of ₹25 lakh per client.
This creates a distinct route with a lower minimum investment threshold than conventional PMS, but it does not replace the ₹50 lakh requirement for regular portfolio management services.
Ultimately, SEBI's new framework preserves the high entry threshold for conventional PMS while introducing a separate mutual fund-based route. Investors will need to assess the services, fees, risks and eligibility conditions before deciding which investment option suits them.