Can PMS Fees Be Adjusted With Taxes?

justdoit2552 · Post by **justdoit2552** » Thu Apr 01, 2010 8:49 am

@Sanjay: whats the fees like? what percentage is that?

sanjaymwadhwa · Post by **sanjaymwadhwa** » Thu Apr 15, 2010 2:47 pm

Justdoit: This year my fees came upto be around 35% of returns, excluding basic 10%. I'm charged based on returns provided.

oasis138 · Post by **oasis138** » Fri Apr 16, 2010 3:11 am

sanjaymwadhwa;279276Justdoit: This year my fees came upto be around 35% of returns, excluding basic 10%. I'm charged based on returns provided.

1/3rd of returns in fees??? wow.. that's better than even the best hedge fund managers in the US.. are you sure about this number? and then yeah tack on another 10%??

sanjaymwadhwa · Post by **sanjaymwadhwa** » Fri Apr 16, 2010 12:02 pm

I have paid these fees, so am sure. The fees are slab wise ranging between 10% on the lower end to 40% on the upper end, depending on the returns. That is pretty high and that is why I have been thinking of alternatives - maybe a good mutual fund, I don't know. Would appreciate some views. The 10% is the hurdle rate - that is till the fund managers don't charge anything till they don't cross 10%.

RRK · Post by **RRK** » Fri Apr 16, 2010 12:36 pm

PMS fees are usuaully two folds.

(1) basic management fee (2) incentive fee when they cross the hurdle rate.

(1) what is your basic management fee ?

I guess #2 is 1/3 over hurdle rate ? For example, if your fund does 20% return and hurdle rate is 10%, you will pay 1/3 of 10% (20-10%) as a fee.
Is it right ?

sanjaymwadhwa · Post by **sanjaymwadhwa** » Tue Jul 13, 2010 4:54 pm

Had been out of touch, so sorry for the delay.

RRK - Basic management fee is 2%.
Yes, you are right. Hurdle rate is 10%, will pay for returns above hurdle rate. Tax filing time is near. Please advice.

happymister · Post by **happymister** » Wed Jul 21, 2010 4:54 pm

I would suggest you look at alternatives like International Money matters who work on a fee based on assets they manage - and not based on % of your profits.
I am more comfortable with this approach - as I don't want to take too many risks with my portfolio.
they are a one-stop shop for all your financial needs - MFs (they charge a service fee after entry load was abolished - based on your net assets with them).

the fees you are currently paying are too high IMHO. plus their portfolio is probably too volatile.
how were their returns during the down turn in 2007-2009? that is the real test of their returns in a bear market.
please be careful in terms of what you wish for.
PMS will try to maximise your returns which might not be the same goals at other investment options such as capital protection or minimize volatility which are equally important goals.

you also do not have to put all your eggs in one basket.
you can have a PMS plus you can some MFs in addition plus you can take some services like IMM provides as well.
there is no one-size-fits-all in the investment world thankfully ! ;-)