Where are PMS advisory clients gone?

The number of clients, who opted for advisory PMS fell sharply in the past 7 years, shows SEBI data.  

In April 2012, there were 10830 clients seeking advice for PMS investment under advisory category, which fell to 4,102 clients by June 2019. However, the total assets under PMS advisory business increased from Rs.69249 crore in April 2012 to Rs.1.90 lakh crore in June 2019.. 

Currently, PMS players offer three services – discretionary, non-discretionary and advisory. While the stock selection is at discretion of fund managers in discretionary PMS, investors have a say in stock selection in a non-discretionary PMS. Investors who take advice from portfolio managers to invest in Indian markets fall under advisory model. Most advisory assets are primarily offshore and HNIs mandates.

Vishal Kapoor, IDFC Mutual Fund believes that many PMSs have restructured their business and launched AIF business in recent times. This has led to a fall in the number of PMS advisory clients as these clients have moved to these AIFs. 

In addition, many FIIs who form a majority of clients in advisory PMS have started their own PMS or moved their funds to other investment products, said Jimmy Patel, MD & CEO, Quantum Mutual Fund.