PMS adds 3,000 clients a month as HNIs seek personalisation beyond mutual funds

Even as digital-first platforms and low-cost investment models gain popularity, Portfolio Management Services (PMS) continue to see strong traction — growing 25-30% annually and adding nearly 3,000 new clients each month. Their appeal? A mix of customization, active management, and high-conviction strategies that app-based solutions can’t replicate.

Despite the surge in SIPs and structured products, PMS is evolving—not fading. It’s becoming more transparent, tech-enabled, and aligned with long-term wealth creation for high-net-worth individuals (HNIs), family offices, and entrepreneurs.

While PMS accounts are fewer than mutual funds, their average ticket size is significantly higher. “PMS is no longer a niche product; it has become a core component of asset allocation strategies for every HNI and family office,” said the Association of Portfolio Managers in India (APMI). “It complements mutual funds and AIFs by offering differentiated exposures and flexibility in portfolio construction.”

Bhavik Thakkar, CEO of Abans Investment Managers, echoed this optimism. “The market share of PMS relative to mutual funds may be small, but the assets under management are growing steadily. Investors are recognizing the importance of expertise-driven portfolios, especially in volatile markets where active management can mitigate risk.”

What sets PMS apart is its ability to provide direct portfolio ownership, hands-on strategy, and visibility into every stock held. “Investors are looking at PMS for focused strategies that align with their long-term vision,” said R. Pallavarajan, Founder at PMS Bazaar. “PMS gives serious investors a degree of precision and personalization that new-age platforms cannot fully replicate.”

Key differentiators include concentrated strategies, active rebalancing, and agility in responding to market volatility. “The unique value of PMS lies in customization and ownership,” noted APMI. “Managers bring in-depth research, seasoned judgment, and the ability to take exposures which low-cost, model-driven platforms cannot replicate.”

However, challenges persist. The ₹50 lakh minimum ticket size continues to be a barrier—though SEBI is reviewing this. Additionally, lingering myths around high fees and average returns weigh on adoption. “The myth around PMS is still there among investors—they feel the fees are higher or returns are similar to mutual funds,” Pallavarajan observed. To address this, PMS players are introducing performance-linked fees, where clients pay only when returns are delivered.

Transparency is also in focus. “PMS providers must improve awareness and simplify communication,” Thakkar said. “Too many investors see PMS as opaque or inaccessible, when in fact it can be highly transparent if executed well.” SEBI’s enhanced disclosure norms and the adoption of digital reporting tools are closing that perception gap.

Technology is playing a pivotal role. From digital onboarding to real-time dashboards, PMS firms are adopting tools that strengthen engagement without compromising on the bespoke nature of their offerings. “Digital adoption will strengthen client engagement, from on-boarding to performance tracking,” said Pallavarajan. “This will help PMS scale without diluting its core strength — personalized portfolio construction.”

Experts agree: PMS isn’t being displaced by new-age platforms — it’s coexisting. While SIPs and Smallcases cater to retail investors, PMS appeals to those who seek personalisation, accountability, and alpha generation. “PMS is not losing relevance; it is evolving,” APMI said. “The key is to make it accessible, transparent, and performance-oriented while leveraging technology to enhance client experience.”

With evolving fee models, growing digital capabilities, and sharper investor awareness, PMS is no longer a boutique offering — it’s becoming a core pillar of India’s wealth management landscape.