Securities and Exchange Board of India (SEBI) Chairman Tuhin Kanta Pandey on Wednesday, 30 September said that portfolio management services (PMS) in India have the potential to grow at more than 20 per cent compounded annually, as wealth creation deepens and investor participation expands across the country. He made the remarks while addressing the 3rd Annual Investor Conference of the Association of Portfolio Managers in India (APMI) in New Delhi.

What Pandey Said

Pandey noted that most segments of India's investment universe have already been clocking growth rates in excess of 15 per cent CAGR, creating a structural runway for PMS to outpace that benchmark. “In fact, PMS can go over 20 per cent,” he said, though he was careful to frame the figure as an indicative potential rather than a formal regulatory projection.

The SEBI chief stressed that the PMS industry must sharpen and communicate its distinct value proposition as the broader investment market grows more competitive and diverse.

PMS vs Mutual Funds and AIFs

Pandey addressed the question of whether PMS competes with other investment vehicles, drawing a clear distinction between the segments. “Let’s not discount the fact that we have other means. They have a mutual fund industry and AIF. These are components that are meeting different kind of clientele. They do not necessarily compete with each other,” he said.

He explained that PMS is designed for high-net-worth individuals (HNIs) seeking professionally managed, customised portfolios, while mutual funds serve the mass-market investor base and alternative investment funds (AIFs) cater to yet another distinct category. Passive investment products, he added, appeal to cost-conscious investors who prioritise low-fee structures over active management.

Why It Matters for the Industry

The PMS segment, though niche relative to the mutual fund industry, has been gaining traction as India's affluent investor class grows. According to SEBI data, the number of registered PMS providers and assets under management have risen steadily over recent years, tracking the broader expansion in financial savings.

Notably, Pandey’s remarks come at a time when SEBI has been tightening disclosure and reporting norms across investment products, pushing the industry toward greater transparency and investor trust. The regulator has also been working to strengthen the framework around HNI-focused products to ensure that product complexity does not outrun investor understanding.

Building Investor Confidence

The SEBI chairman underlined that as competition and product choice intensify, the PMS industry’s long-term growth will hinge on its ability to build and sustain investor confidence. Communicating a clear, differentiated value proposition — particularly against the backdrop of low-cost passive funds gaining ground globally — will be critical for the sector’s next phase of expansion.

With India’s household financial savings increasingly moving into market-linked instruments, the APMI conference signals a growing institutional focus on positioning PMS as a credible, regulated, and scalable wealth management option for the country’s expanding affluent class.