Mar 4, 2012

PMS: Is it Portfolio Management or Mismanagement?

Heads we win, tails you lose!

So you think that you’ve acquired the status of a HNI (High Net worth Individual) with a few lakh to spare and are looking beyond the realm of mutual funds either because already heavily invested in them or to design a customized portfolio for yourself or just to pamper your ego.
Photo by zabidazabadu

And here comes your wealth advisor with a exotic product called PMS (Portfolio Management Services) and tells you that it will provide you returns far better than plain-vanilla mutual funds. And you’re wondering, why not go for it?

Ok, now just try guessing
the name of a ULIP product offered by the mutual funds, brokerages and wealth management firms. Yes, you’ve guessed it right! PMS is another ULIP sort of product meant to fleece you. As I wrote earlier, one of the heights of financial stupidity is investing in Portfolio Management Services (PMS). Both ULIPs and PMS are used to make a fool of investors; the only difference being that while ULIPs are sold/mis-sold by Life Insurance Companies, PMS is mis-sold by Asset Management Companies (AMCs), Stock Broking Companies and Wealth Management Firms.

It is human nature to get tempted by fancy looking products; like moths to flame we’re invariably attracted by glamour. The term Portfolio Management Services (PMS) and ‘wealth management’ appear glamorous; similarly the name of various products offered under PMS also appear to be quite exotic; for example,

Here’s a list of few of these exotic investment products:

-ICICI Prudential PMS Aggressive Portfolio

-ICICI Prudential PMS Deep Value Portfolio

-Sharekhan PMS ProPrime

-Sharekhan PMS ProTech

-Absolute Freedom Option by Reliance Portfolio Management

-ING India BSE 200 Quant Equity Portfolio

-HSBC Alpha Account Signature Portfolio

I hope now you’ll remember what is the full form of PMS…it is ‘Portfolio Mis-management Scheme’.

But Fisher, making such generalized statements not supported by facts is not expected from you? Come up with some convincing arguments?

O.k. just wait, I’ll surely write a detailed post about what exactly is PMS and why it is considered harmful for your financial health.

Also see:

1. Height of Financial Stupidity

2. Truth behind Complex Financial Products

3. Money Quest Financial Stupidity Awards


  1. Is there any product for long term investing (with lock in period if necessary). What I am saying is mutual funds may go for short term incentives because of constant pressure of performance and end up matching just benchmark returns. Is there a product (or equity mutual fund) which really looks for good companies and hold on to them for a long time?

  2. You Are . I Have ING PMS 200 since Aug 2010. In today i lost
    Rs. 2 lacs. Not good to invest in PMS

  3. You left one of the worst in business - Kotak PMS. Absolute leeches. PMS returns good only when market is going up. Even a monkey which picks stocks at random makes money when markets are going up. Mutual Funds are far better portfolios to invest.


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