Many PMS players have launched direct plans of their PMS.
With this, PMS players offer an option to investors to invest in PMS without engaging intermediaries.
However, experts believe that direct plans in PMS will take time to gain traction among investors largely due to operational constraints. In addition, investors need guidance and advice to invest substantial amounts of Rs.50 lakh and above.
In direct plan of PMS, investors are expected to do risk profiling on their own, understand terms and conditions, discuss fees and profit sharing with PMS players and completer all necessary formalities like assigning the power of attorney and so on.
Daniel GM, Founder – Director, PMS Bazaar believes that investors would find it difficult to pick best PMS due to unique nature of the product. There is no standardisation in PMS. He said, “Many investors will not take the undue risk to invest Rs.50 lakh without guidance. However, direct plans will pick up if the regulator introduces standardisation in terms of product structure, fees and so on.”
Monalisa Shilov, CBO & Investment Specialist at Trivantage Capital, a PMS company said that investors are yet to consider direct plan PMS as investing in direct PMS is not as simple as mutual funds. “Investing directly would require investors to do risk profiling and discuss complex matters like profit sharing and power of attorney, which is cumbersome for them. On the other hand, intermediaries offer these services with ease and simplicity to investors.”
Shilov further said that the PMS industry doesn’t offer paperless KYC and investors are required to complete their application physically. “Onboarding clients in PMS requires physical signatures of an investor which has now become a problem due to covid crisis. It takes 5-7 days to open an account after taking the physical sign and KYC documents of an investor. There is an urgent need to shift this onboarding process to online like other investment products to make investment easier,” said Monalisa.