Fyers eyes PMS debut with more transparency, low fees 
Special 
Fyers eyes PMS debut with more transparency, low fees At a time when portfolio management services (PMS) are fast gaining popularity amongst the high networth individual (HNI) segment looking for professional management of their wealth, new-age online trading and investment platform Fyers has also decided to enter the PMS arena.
Fyers aims to disrupt the PMS segment by bringing in more transparency and a better fee structure. “I think the PMS industry is a little opaque. It can be more transparent,” says Tejas Khoday, Co-founder and CEO, Fyers.
“They are not too different from mutual funds. The whole point of alternative investing is that it should be specialised. They should be different. But if you look at many of the portfolios, they have 15-20 stocks in them. How different is it from mutual funds? But look at the fee structure,” he adds.
He further highlights the fact that PMS firms charge anything between 1.5 per cent and 2 per cent as management fee and also levy a performance fee and pass-through fee separately.
“This fee tends to be in the range of 15-20 per cent which does not make sense at all. This is not the right way to manage investment portfolios,” says Khoday.
This assumes significance as PMS is fast gaining traction as the go-to destination for wealthy individuals who are looking for higher returns and are ready to bet on fund managers that promise them an alpha—returns over and above the benchmarks—while providing bespoke investment schemes.
“We are out to bring in some transparency and accountability and not to overly diversify. We think that it can be done and in fact, there is a need and people have been asking us. So, we thought why not create a low-cost, structured and concentrated portfolio,” says Khoday.
While it may appear that PMS is similar to mutual funds, the key difference is that while one can invest as low as Rs 500 in a mutual fund, the minimum investment ticket size in a PMS is Rs 50 lakh—a limit which is mandated by the Securities and Exchange Board of India (Sebi).
Incidentally, the numbers clearly corroborate the growing popularity of PMS. The total assets under management (AUM) of the PMS industry has nearly trebled in the last seven years – rising from Rs 10.45 lakh crore in March 2016 to nearly Rs 28 lakh crore in March 2023, as per data from capital markets regulator Securities and Exchange Board of India (Sebi).
More importantly, the number of investors in the PMS arena—though a fraction of that of mutual funds—has also seen a corresponding rise from a mere 52,288 in FY16 to nearly 144,000 in FY23.
“PMS is supposed to be something different from mutual funds. If a PMS right now says that we will do the exact same thing as mutual funds and charge them 10 times, that's not going to work. We are here to change that,” says Khoday.
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