RIA or PMS? ₹43.3T in India’s portfolio services

India’s portfolio management services (PMS) sector oversees more than ₹43.3 trillion in assets and manages over 2.2 lakh investor accounts. Investors choose between advice from around 1,041 SEBI‑registered Registered Investment Advisers (RIAs) and professionally managed PMS products that require a minimum ₹50 lakh ticket.

A Registered Investment Adviser operates under the SEBI (Investment Advisers) Regulations, 2013. RIAs provide fee‑only, product‑neutral financial advice and do not take custody of client funds or execute trades on behalf of clients. SEBI limits RIA fees to either up to 2.5% of assets under advice per family per year or a fixed ceiling, currently reported at up to ₹1.51 lakh per family per year. Because clients execute transactions themselves, following RIA recommendations does not by itself create taxable events.

Portfolio Management Services are regulated under the SEBI (Portfolio Managers) Regulations, 2020. A PMS manager holds and trades securities on a client’s behalf and must accept clients with at least ₹50 lakh to invest. PMS can be discretionary, where the manager trades without prior approval for each transaction; non‑discretionary, where the manager recommends trades that require client approval; or advisory, where only recommendations are provided and the client executes trades. Securities bought in a PMS remain in the client’s demat account and clients receive holding‑level statements and time‑weighted return reports.

PMS providers typically charge a management fee and may levy a performance fee. Additional costs can include brokerage, custody charges, audit fees and GST. Active trading within a PMS can generate capital gains or losses; under current 2026 tax rules, listed equity long‑term capital gains above the exemption limit are generally taxed at 12.5%. RIA engagements do not create tax events by themselves because clients control the timing of transactions.

Investors with smaller investable sums, multiple financial goals or a preference to retain final decision‑making often engage an RIA. High‑net‑worth individuals with at least ₹50 lakh and a preference to delegate day‑to‑day portfolio management tend to use PMS. Many investors combine both services: an RIA may construct an overall financial plan and recommend allocations while a PMS manages the portion of the portfolio assigned to active management. One industry example shows a ₹2 crore portfolio split across mutual funds, a PMS tranche and fixed‑income holdings, with the RIA overseeing the allocation and the PMS managing its assigned equity portion.

Before engaging either service, verify registration on SEBI’s Registered Intermediaries database. Review fee schedules, reporting frequency, exit terms and the type of PMS being offered. Key choices include whether the client wants to retain trade approval, the size of the investable corpus, whether comprehensive financial planning is needed or only portfolio execution, and how the timing of disposals will affect tax liabilities.