SEBI’s board approved a new route on 24 September 2026 for portfolio managers to build client portfolios using mutual fund units. Called PRIM, it has a ₹25 lakh minimum investment. For an investor who wants someone to choose and monitor funds, it could offer convenience. The important question is whether that service is worth its additional cost.
What has been approved?
PRIM stands for Portfolio Managers’ Route for Investing in Mutual Fund units. A registered portfolio manager would manage a client’s portfolio through direct plans of mutual fund schemes, including index funds and exchange-traded funds, and eligible specialised investment funds. The manager can tailor the mix and make ongoing decisions for the client. This is a board decision; investors should wait for the final rules and actual offering documents before treating any advertised service as available on settled terms.
Ordinary direct mutual funds remain available without PRIM. A direct plan has the same underlying portfolio as its regular counterpart but generally a lower expense ratio because it does not include a distributor commission, as SEBI’s investor education page explains. PRIM adds a portfolio manager’s service above the costs already built into the funds.
Put the fee in rupees
Under the board-approved framework, the fixed management fee may be up to 1% of the client portfolio’s value, and a performance-linked fee is also permitted. At 1%, a ₹25 lakh portfolio implies ₹25,000 a year in fixed management fees before considering changes in value, any performance fee, taxes or the funds’ own expense ratios. The 1% figure is a ceiling for the fixed fee, not the total cost of investing or a fee every provider must charge.
Even a small annual cost compounds. As a simple illustration, ₹25 lakh growing at 10% for ten years becomes about ₹64.8 lakh; at 9%, it becomes about ₹59.2 lakh, a difference of roughly ₹5.6 lakh. These are hypothetical net growth rates, not PRIM return forecasts. Actual fees, taxes, fund choices and market performance will differ.
Questions before signing up
- What will I pay in total: the manager’s fixed and performance fees, fund expenses, taxes and transaction costs?
- What service and reporting will I receive, and how will the manager measure results against a suitable benchmark after all costs?
- How much discretion will the manager have to change funds, and what conflicts might arise from choosing funds linked to the manager?
- Could I meet the same goal with a simpler mix of direct funds and advice for a clearly stated fee?
For a household comfortable managing a simple portfolio, the new route is not automatically an upgrade. For someone who needs tailored management and will use it, the service might justify the price. The decision should rest on the written fee schedule, investment approach, risks and alternatives when the final framework and products are available.
Sources: SEBI board meeting decisions, 24 September 2026; SEBI Investor: regular and direct mutual funds. This article is educational and is not a recommendation to invest.