Thanks to a well-developed capital market, India's Portfolio Management Services (PMS) industry is defying expectations by experiencing significant growth despite the country's lower per capita income. Ashish Chauhan, Managing Director & CEO of NSE, highlighted this at an event organised by the Association of Portfolio Managers in India (APMI). The event brought together industry leaders, including SEBI's Chairperson, Madhabi Puri Buch.
As a keynote speaker, Chauhan presented on the Indian PMS Industry, trends and way forward. He expressed confidence in the Indian investment industry's role in creating wealth for the next 30-40 years. This optimism stems from India's favourable demographics and increasing technology adoption across sectors. As such, there are multiple business opportunities for portfolio managers. Chauhan stated that better business opportunities would mean higher responsibilities towards investors.
Data presented at the event underscored this optimism. The industry's Assets Under Management (AUM) has seen a healthy 16% Compound Annual Growth Rate (CAGR) over the past decade, with the client base tripling in that same timeframe.
Ethical and compliance standards
As the PMS industry continues its upward trajectory, it is crucial to maintain ethical and compliant investment practices. Chauhan stressed this point, noting the increasing influence of technology, particularly Artificial Intelligence (AI) and smart algorithms, on investment decisions. This trend aligns with the growing demand from investors for seamless and user-friendly investment experiences, such as single-window investment solutions.
APMI's role
The historical perspective on the PMS Industry was also discussed. Ashish Chauhan traced the roots of the PMS industry back to the early 1990s when pioneering wealth management companies began offering customised services to high-net-worth individuals (HNIs) and ultra-high-net-worth individuals (UHNIs). This coincided with a growing demand for sophisticated financial products. The Securities and Exchange Board of India (SEBI) played a crucial role in the industry's development, introducing the first PMS regulations in the 1990s and further strengthening the framework in 2020. The establishment of APMI, with its focus on promoting industry best practices, fostering sustainable growth, and advocating for the interests of both PMS providers and investors, is a testament to the industry's commitment to quality and growth.
This was the summary of Chauhan's speech presented at the APMI conference held on 4 July 2024.
