How to choose a PMS: a due-diligence checklist.
A ₹50 lakh commitment deserves better than a sales deck. The questions you ask before signing matter more than any advertised return. This is the full list, in order.
Judge every manager on the same six tests.
One great year tells you almost nothing. What separates a durable PMS from a lucky one is behaviour across full cycles, honest risk disclosure, a bench behind the star manager, a fee stack you have seen in writing, and exit terms you have actually read. Run the same checklist on every candidate and the marketing falls away.
Six checks, at a glance.
SEBI already bans upfront fees and caps exit loads; the rest is on you. Pick a test: here is what a good answer and a red flag look like on each.
Steady through 2020 & 2022, shown as TWRR
Only the recent rally shown
What to checkSteady through 2020 & 2022, shown as TWRR
Only the recent rally shown
The return, and the ride.
Demand the full cycle, not the highlight reel.
Insist on seeing how the strategy behaved through the March 2020 crash and the 2022 rate-hike correction, and the recoveries that followed. SEBI requires discretionary managers to report time-weighted returns (TWRR) against an appropriate index; that format strips out the luck of cash-flow timing and shows pure managerial skill.
Prefer rolling returns over a single point-to-point CAGR; a flattering start date can make a mediocre manager look brilliant.
Drawdown, concentration, turnover.
Returns are the reward; these three numbers are the ride. Maximum drawdown is the deepest fall on record. Steady compounding with a shallow drawdown usually beats a higher headline with violent swings, especially at ₹50 lakh-plus. Concentration shows how the book is built: position and sector caps tell you whether one bad call can sink the year. Turnover is how often the manager trades. High churn bleeds brokerage and short-term tax, and can signal an undisciplined process.
One star manager is a feature, and a fragility.
Many Indian PMS strategies are built around a single name. That keeps the thinking accountable, but it also hangs your outcome on one person. Asking what happens if they leave is not rude. It is diligence.
Look for a real research bench, a written investment process, and a stated succession plan. Firms where the philosophy lives in the institution, not one head, age better over a 5–10 year holding period.
What it costs, and who verifies it.
Get the full fee stack, in writing.
The management fee is only the visible layer. Fixed plans run up to about 2.5% a year; performance plans take 10–20% of gains above a hurdle, with a mandatory high-water mark so you never pay twice on the same recovery. Underneath sit brokerage at actuals, custodian charges, other operating costs (SEBI-capped at 0.50% of average AUM), and 18% GST on the fees themselves.
SEBI bans upfront fees entirely, caps exit loads at 3-2-1% over the first three years, and requires a direct on-boarding option. Ask for the whole stack modelled on your ticket size: one all-in annual number. For the worked maths, see PMS fees & costs.
The index must match the mandate.
A mid-cap book measured against a large-cap index flatters itself. SEBI now ties each strategy to a stated benchmark category; verify it mirrors where the money actually sits. On the way out: your shares stay in your own demat throughout, but confirm the notice period, liquidation speed and where you sit on the exit-load taper. Clean exit terms are a manager telling you they expect you to stay by choice.
Cut through sales bias with one score.
Every deck you are shown was made by the seller. The Nyra Score grades every strategy across our 900+ tracked offerings on the same 0–10 basis, so the first cut is evidence, not polish. Build the shortlist there, then run this checklist on the finalists before you ever sit with a manager.
The question sheet, in one place.
Every ask from the tests above, on one sheet. Get each one answered in writing before you sign.
| Test | № | Ask for |
|---|---|---|
| Track record | 01 | A minimum of five years of TWRR data, including the drawdowns |
| 02 | Rolling returns versus the benchmark, not one cherry-picked start date | |
| 03 | Peer comparison within the same category, not just a broad index | |
| Risk | 04 | Worst drawdown: how deep, and how long the recovery took |
| 05 | Largest single-stock position and top-10 concentration | |
| 06 | Sector limits and how widely the book is spread | |
| 07 | Annual portfolio turnover, and the cost + tax friction it creates | |
| Fees | 08 | Fee model (fixed, performance or hybrid) and the exact hurdle |
| 09 | High-water mark confirmed in the documentation | |
| 10 | Brokerage, custodian, operating expenses (capped at 0.50% of AUM) + 18% GST | |
| 11 | The exit-load schedule, and whether direct on-boarding is offered | |
| 12 | One number: the full estimated annual cost on your ticket size |
The first cut is evidence, not polish.
The Nyra Score grades every strategy across our 900+ tracked offerings on the same 0–10 basis. Build the shortlist there, then run this checklist on the finalists.
Choosing a PMS, answered.
Keep reading.
Build the shortlist on evidence, then run the checklist.
Educational content only, not investment advice. Figures reflect SEBI rules current to 2025-26 and may change; verify specifics before acting. PMS, AIF & GIFT City investments are subject to market risks; past performance is not indicative of future returns.