Why Premium Portfolio Managers Are Failing To Justify Their Fees

In investing, as in life, paying more doesn't always mean you will be getting more

- Dhirendra Kumar

A recent social media post caught my attention—not so much for what it said, but for the torrent of responses it unleashed. An investor shared how his relative had entrusted ₹65 lakh to a portfolio management service (PMS) in 2022, only to see it grow to about ₹74 lakh by mid-2025. That translates to an annual return of roughly 6.9%—barely ahead of a bank fixed deposit and lagging most mutual funds and market indices. Meanwhile, the portfolio manager earned a comfortable 2% fee each year, regardless of performance.