PMS Foundation

SEBI set ₹50 lakh as the threshold to ensure PMS is accessed only by investors who can afford the operational complexity (separate demat, transaction-by-transaction tax, individual reporting) and absorb the higher concentration risk. The threshold also supports the Portfolio Manager's economic viability — managing customised portfolios for ₹10 lakh tickets would not be cost-effective.

Yes. Because the securities sit in your own demat account, all dividends, bonus issues, rights, buybacks, and other corporate actions accrue directly to you, on the same terms as if you held the stocks yourself. This is one of the structural differences from mutual funds, where these benefits accrue to the fund and are reflected in the NAV.

You receive transaction confirmations through your broker (since the trades happen in your demat account), and the Portfolio Manager provides quarterly portfolio statements with detailed positioning. You will not see real-time alerts on every trade, but you have full transparency on holdings and transactions through your demat account at any time.

The most important operational difference: in a mutual fund, you hold units and the fund holds the securities. The fund's buy-sell activity is invisible to you (you only see the NAV). In a PMS, you hold the securities directly, so every Portfolio Manager transaction reflects in your demat — and creates a tax event on your books. This means PMS portfolios typically generate more granular tax reporting than mutual funds.

Not necessarily. The Manager operates within a SEBI-mandated investment framework and the strategy disclosed in the Disclosure Document. The POA grants execution authority but not unlimited risk-taking. The investor reviews holdings quarterly and can withdraw at any time. The greater "risk" of Discretionary is psychological — investors must accept that they will not approve every trade.

Generally no — these are distinct service types under SEBI rules and require different agreements. Switching usually means redeeming from one and re-subscribing to the other, with the corresponding tax events.

The investor — because the investor executes the trade. The Advisory Portfolio Manager provides recommendations but does not bear execution risk. This is one reason Advisory is suitable only for sophisticated investors who can independently evaluate recommendations.

The Power of Attorney is limited — it authorises the Portfolio Manager to buy and sell securities specifically within the agreed strategy and demat account, and does NOT permit fund transfers, account closures, or other transactions outside the investment mandate. Always read the POA carefully and consult your legal advisor before signing.