Comments on: PMS: When to choose one http://www.subramoney.com/2009/11/pms-when-to-choose-one/ Personal Finance Sat, 11 Feb 2012 16:56:34 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: anonymous http://www.subramoney.com/2009/11/pms-when-to-choose-one/comment-page-1/#comment-1994 anonymous Thu, 26 Nov 2009 08:12:42 +0000 http://www.subramoney.com/?p=2661#comment-1994 - Another risk is pooling of trades. PMS guy will pool all trades and execute, including his own. The most profitable trades he will keep for himself (who else :-)). The next profitable trades he will assign to guy who has max corpus given , so that the client doesnt take out his money. In short he will do some rebalancing in all accounts so that everyone gets something, just so that they dont take the money out. (The best trades he takes for himself) In this process, even in 2003-2007 bull run, few pms customers got much less returns than what they would have got if they just put in a index fund. I think Sebi banned this, but these guys will have some way to override the rules. - Another risk is pooling of trades. PMS guy will pool all trades and execute, including his own. The most profitable trades he will keep for himself (who else :-) ). The next profitable trades he will assign to guy who has max corpus given , so that the client doesnt take out his money. In short he will do some rebalancing in all accounts so that everyone gets something, just so that they dont take the money out.
(The best trades he takes for himself)

In this process, even in 2003-2007 bull run, few pms customers got much less returns than what they would have got if they just put in a index fund.
I think Sebi banned this, but these guys will have some way to override the rules.

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