Investors have several common questions regarding Portfolio Management Services (PMS). Here are the frequently asked questions (FAQs):
1. What is PMS?
Portfolio Management Services (PMS) involves professional management of clients' investment portfolios, aiming to achieve specified financial goals through tailored investment strategies.
2. How does PMS differ from mutual funds?
PMS offers personalized portfolio management with direct ownership of securities, allowing customization based on individual client needs, whereas mutual funds pool money from multiple investors and have standardized investment strategies.
3. What is the minimum investment required for PMS?
The minimum investment amount as per SEBI PMS Regulations is ₹50 lakhs. This can be made in cash, stock transfer, or a combination of both.
4. Who manages my investments in the PMS?
A team headed by the qualified fund manager will manage the investments under PMS. At Prospero Tree, we follow a Fundamental Research driven investment style with a focus on long term wealth creation
5. What is the tax treatment for PMS investments?
The tax liability for PMS investors is similar to that of direct investors in the stock market. This will typically mean that you will have to pay Long Term Capital Gains Taxes and Short Term Capital Gains Taxes, as applicable.
6. What fees are associated with PMS?
The fees charged will be dependent on the fee structure offered by the PMS. At Prospero Tree, we offer multiple fee structure in combination of Fixed Fee and Performance Fee. To understand the same in details, please connect with us.
7. What are the additional costs in PMS?
The PMS account may include custodian fees, Fund accounting fees, demat charges, auditing charges, and some other incidental costs. As an indicative number, all of these cost will usually be very tiny portion of your total value.
8. Can I partially withdraw from my PMS?
Yes, clients can partially withdraw funds, but the remaining portfolio value at the time of withdrawal must stay above ₹50 lakhs as per SEBI regulations
9. How often will I receive reports on my portfolio?
Investors typically receive regular updates and statements regarding their portfolio performance (typically quarterly), with audited statements provided annually at the end of the financial year.
10. What happens if my portfolio value falls below the minimum requirement?
If the portfolio value falls below ₹50 lakhs due to market fluctuations, clients are not required to top up their accounts unless they wish to make additional investments.
11. Is there a lock-in period for investments?
While there is no formal lock-in period, early withdrawals may incur exit loads depending on the terms agreed upon in the PMS contract. We encourage investing into the PMS with a 5+ years horizon.
12. Are investors required to open new demat accounts for a PMS?
Yes. An investor is required to open a new demat account in his/her own name with the designated custodian chosen by us
