PMS Fees in India — Management & Performance Fee Guide
PMS fees in India are rarely a single expense ratio. Most discretionary mandates combine a fixed management fee, a performance-linked fee, brokerage/turnover costs, GST where applicable, and operational charges disclosed in the agreement. Comparing “cheap vs expensive” without that breakdown is how investors mis-hire managers.
This guide explains fee building blocks and how to stress-test them in rupees. Cross-read Fees, the Fee Destroyer, and Polaris fee disclosure. Not personalised advice.
The usual fee stack
Fixed management fee is charged on assets (or as defined in the agreement) whether markets are calm or violent. Clearmind Polaris publishes a 0.5% fixed management fee — billed once per year inside a doubling cycle in our compounding illustrations.
Performance fee shares upside above a hurdle or milestone structure. Ask for worked examples at your intended capital: a 20% performance share of profit sounds abstract until you convert a doubling year into rupees of fee, GST, and tax.
Implicit costs — brokerage, impact, and turnover — do not appear as a neat TER line. Patient implementation with a clearer fixed fee can beat hyperactive strategies with a lower headline rate.
How to compare PMS fees without fooling yourself
- Request the full fee schedule in the draft agreement, including GST treatment and exit or switch charges.
- Model flat, up, and down years — performance fees behave asymmetrically across paths.
- Compare net-of-fee outcomes and reporting quality, not only the management-fee percentage. See Returns.
- If you are still comparing to mutual funds, separate structure from cost: PMS vs mutual fund.
Minimum ticket interacts with fee economics
The SEBI ₹50 lakh PMS minimum means fee conversations happen on serious capital. Below that ticket, RA or model portfolio products may apply — different fee schedules, different licences. Use PMS minimum investment in India and the min-ticket calculator before debating performance fee tiers.
Questions to email before you commit
- What is charged if the portfolio is flat for a year?
- When is performance fee crystallised, and how are high-water marks handled?
- Are there soft-dollar, research, or platform charges outside the published %?
- Can you show a sample invoice and a sample client report for the same period?
Bring those answers into a mandate-fit conversation with approximate capital and horizon. Fee clarity is a hiring filter — not a negotiation after you have already emotionally committed.