PMS players experiment with pay-only-for-profit model, skip fixed fees

The model has emerged during a period of regulatory change

People who manage investment portfolios of the rich are increasingly pitching for a model where they are only paid for the profits they make.

Investors typically pay portfolio management services (PMS) providers an annual fixed fee of around 2 per cent of the money they manage. They also pay them a share of the profits made. This is usually around 20 per cent of gains above a certain threshold. This ‘two and 20’ model is giving way to a ‘zero and 20’ model, according to industry experts.

“We are increasingly seeing a trend wherein a service provider is willing to