SEBI has approved and notified a new investment route called PRIM, which will allow portfolio managers to construct and manage portfolios using eligible mutual fund products for clients investing at least ₹25 lakh. The move is significant because the standard minimum for traditional Portfolio Management Services (PMS) is ₹50 lakh.
For affluent and emerging high-net-worth investors, PRIM is intended to create another professionally managed option between independently building a mutual fund portfolio and entering traditional PMS. However, a lower minimum does not automatically make PRIM suitable. Investors still need to understand the investment universe, fees, risks, tax implications, portfolio strategy and level of professional management involved.
Important regulatory note: SEBI's Board approved the PRIM framework on September 24, 2026. SEBI subsequently notified the Portfolio Managers Regulations, 2026 in October 2026, with the new regulations taking effect from April 1, 2027.
What Is SEBI's New PRIM Route?
PRIM stands for Portfolio Management Service Route for Investment in Mutual Fund units. Under the notified framework, it will allow a registered portfolio manager to manage a client's portfolio using eligible direct-plan mutual fund products rather than constructing the portfolio primarily from individual securities.
Under the notified PRIM framework, the minimum investment threshold is ₹25 lakh per client. Existing portfolio managers intending to offer PRIM may be permitted to do so under segregated investment approaches, subject to conditions specified by SEBI.
PRIM should not simply be understood as "PMS starting at ₹25 lakh." The important difference is what the portfolio manager manages. In traditional PMS, the manager can invest directly across a broader permitted securities universe. Under PRIM, the portfolio is constructed from specified fund-based products.
What Can PRIM Portfolios Invest In?
The notified PRIM framework provides for investment in eligible products of Indian asset management companies, including:
- Direct plans of mutual funds
- Exchange-Traded Funds (ETFs)
- Index funds
- Specialised Investment Funds (SIFs)
PRIM provides a framework for portfolio managers to manage portfolios using the permitted fund-based investment products. The detailed operating conditions for existing portfolio managers will be subject to the requirements specified by SEBI.
Why Does the ₹25 Lakh Threshold Matter?
The ₹25 lakh minimum creates a new professionally managed route for investors who may have more capital than a typical self-directed mutual fund investor but are below the ₹50 lakh standard PMS threshold.
| Investment Route | Minimum Investment | Management |
|---|---|---|
| Mutual Funds | No PMS-style minimum; scheme minimums apply | Fund manager manages the scheme |
| PRIM | ₹25 lakh | Portfolio manager manages allocation across eligible funds |
| Traditional PMS | ₹50 lakh | Portfolio manager manages a broader permitted portfolio |
The distinction is particularly relevant for investors in the ₹25 lakh to ₹50 lakh range who want professional asset allocation and portfolio monitoring without moving directly into conventional PMS.
However, ₹25 lakh is an entry threshold, not a recommendation. Investors should first assess liquidity needs, financial goals, risk tolerance and whether professional portfolio management adds enough value to justify its additional costs.
How Does PRIM Work?
PRIM is a portfolio-management route under which client funds are invested in the permitted direct plans of mutual funds in India, including index funds, Exchange-Traded Funds (ETFs) and Specialised Investment Funds (SIFs).
Regulation 30(2) provides that an existing portfolio manager intending to offer PRIM may be permitted to do so under segregated investment approaches, subject to conditions specified by SEBI. The detailed processes for portfolio construction, management, monitoring and other operational requirements should therefore be considered once the applicable conditions for existing portfolio managers are available.
PRIM vs Traditional PMS: What's the Difference?
PRIM and traditional PMS both involve a portfolio manager, but their investment universes and minimum thresholds differ significantly.
| Factor | PRIM | Traditional PMS |
|---|---|---|
| Minimum investment | ₹25 lakh | ₹50 lakh |
| Investment universe | Eligible mutual funds, ETFs, index funds and SIFs | Broader range of permitted securities |
| Portfolio management | Portfolio manager | Portfolio manager |
| Primary portfolio decisions | Fund selection and allocation | Direct security and broader portfolio selection |
| Customisation | Depends on mandate | Generally broader flexibility |
| Investor suitability | Investors seeking professional management of fund-based portfolios | Higher-ticket investors seeking broader PMS strategies |
Is PRIM the Same as PMS?
PRIM operates within the portfolio-management framework, but it should not be treated as identical to conventional PMS.
Traditional PMS can directly own securities selected by the portfolio manager. PRIM instead creates a professionally managed portfolio from eligible fund products.
Calling PRIM simply "low-ticket PMS" therefore misses the structural difference.
PRIM vs Mutual Funds: What's the Difference?
A mutual fund already has a professional fund manager, so investors may reasonably ask why another manager is needed.
The difference is the level at which management takes place.
Mutual Funds
A mutual fund manager decides which securities belong inside a particular scheme. The investor generally decides:
- Which schemes to buy
- How much to allocate to each
- When to rebalance
- Whether funds overlap
- When to switch or exit
PRIM
Under PRIM, the portfolio manager takes responsibility for portfolio-level decisions within the agreed mandate. This may include:
- Selecting eligible funds
- Deciding allocations
- Combining active and passive strategies
- Monitoring portfolio risk
- Rebalancing the overall portfolio
PRIM therefore adds professional portfolio construction above the management already happening inside each mutual fund.
What Are the Potential Benefits of the PRIM Route?
Depending on the strategy and investor, PRIM may provide:
- Professional fund selection
- Structured asset allocation
- Portfolio-level diversification
- Ongoing monitoring
- Rebalancing
- Reduced dependence on individual DIY decisions
- Access to eligible SIF strategies within a broader portfolio
- A lower entry threshold than traditional PMS
Another potential benefit is accountability. Instead of separately owning several funds without a portfolio-level framework, investors can evaluate one professional manager responsible for how those funds fit together.
These benefits still depend on the quality of the investment process and the value delivered after fees and taxes.
What Are the Costs and Fees Under PRIM?
The fee structure and other operating conditions applicable to PRIM offered by existing portfolio managers will depend on further conditions specified by SEBI.
Investors may therefore need to consider:
- Applicable portfolio-management charges
- Underlying fund expenses
- Transaction-related costs, where applicable
- Tax implications
- Other charges disclosed under the applicable framework
Applicable charges, exit conditions and other operational requirements should be reviewed once SEBI specifies the relevant conditions for existing portfolio managers.
Why Investors Should Look Beyond the Management Fee
The total cost of a PRIM investment approach may include portfolio-management charges, underlying fund expenses and other applicable costs. Investors should review the complete cost structure once the relevant conditions for existing portfolio managers are specified by SEBI.
Investors should consider the total cost of ownership in relation to the services provided under the applicable investment approach.
What Are the Risks and Limitations of PRIM?
Professional management does not remove investment risk. Key considerations include:
- Market risk: Mutual funds and SIFs can decline with underlying markets.
- Fund-selection risk: Selected funds may underperform alternatives or benchmarks.
- Strategy risk: The portfolio's allocation may not perform as expected.
- Fees: Additional management costs reduce net returns.
- Tax impact: Switching or redeeming units can trigger capital-gains consequences.
- Underlying product risk: Each fund or SIF carries its own risks.
- No guaranteed return: A portfolio manager cannot make market-linked investing risk-free.
PRIM may therefore not suit every investor simply because they have ₹25 lakh available.
Who Should Consider the PRIM Route?
PRIM May Be Relevant for Investors Who:
- Have ₹25 lakh or more available for the strategy
- Want professional portfolio-level management
- Prefer fund-based investments
- Do not want to select and monitor multiple funds themselves
- Want structured asset allocation and rebalancing
- Are comfortable with the applicable management costs
PRIM May Not Be Necessary for Investors Who:
- Prefer DIY investing
- Have straightforward investment requirements
- Are comfortable selecting and rebalancing mutual funds
- Do not need portfolio-level delegation
- Prefer to minimise additional management costs
PRIM vs PMS vs Mutual Funds: Which Route May Suit You?
A simple way to think about the three options is:
- Mutual Funds: May suit investors comfortable selecting and managing their own fund allocation.
- PRIM: May suit eligible investors with ₹25 lakh or more who want a portfolio manager to manage an eligible fund-based portfolio.
- Traditional PMS: May be relevant to investors meeting the ₹50 lakh threshold who want access to a broader professionally managed investment universe.
Suitability depends on individual circumstances. Minimum investment amounts should never be used as the sole decision criterion.
How Purnartha Can Help Investors Navigate the PRIM Route
Purnartha is registered with SEBI as a Portfolio Manager and a non-individual Investment Adviser. As an existing portfolio manager, any PRIM investment approach offered by Purnartha would be subject to the conditions specified by SEBI under the applicable regulatory framework.
As further guidance for existing portfolio managers is awaited, investors should evaluate PRIM based on the applicable regulations, their financial goals, risk profile, investment horizon, liquidity requirements and overall portfolio needs.
Understanding PRIM Alongside Other Investment Options
PRIM introduces another route that investors may evaluate alongside options such as self-managed mutual funds, traditional PMS and investment advisory services.
When comparing these routes, investors may consider:
- Investment objectives
- Risk profile
- Investment horizon
- Liquidity requirements
- Portfolio structure
- Applicable costs
- Tax implications
- Level of professional management required
The appropriate route depends on the investor's broader financial position rather than the minimum investment threshold alone.
Evaluating the PRIM Framework
For investors considering PRIM, it is important to understand the permitted investment universe, applicable regulatory conditions and the terms of the relevant investment approach.
As SEBI issues further guidance for existing portfolio managers, investors should review the final structure, costs, portfolio-management approach and other applicable terms before making an investment decision.
Why Professional Guidance Matters
Professional guidance can help investors understand how different investment routes may fit within their broader financial plan. This may include evaluating asset allocation, risk exposure, liquidity requirements, costs, tax considerations and long-term objectives.
Until further regulatory guidance for existing portfolio managers is available, PRIM should be evaluated as a developing investment route rather than as a standardised offering with identical terms across providers.
Considering a ₹25 lakh+ investment?
The suitable investment route depends on financial goals, risk profile, investment horizon and portfolio requirements, not simply the minimum investment amount. Investors considering PRIM should review the applicable SEBI requirements and the terms of the relevant investment approach once further guidance for existing portfolio managers becomes available.
What Should Investors Check Before Choosing a PRIM Strategy?
Before committing capital, review:
- SEBI registration of the portfolio manager
- SEBI's applicable PRIM regulations and requirements
- Investment approach
- Asset-allocation methodology
- Eligible investment universe
- Fund-selection process
- Risk profile
- Rebalancing policy
- Applicable fee and cost structure
- Underlying fund expenses
- Tax implications
- Reporting standards
- Historical performance once available
- Exit and withdrawal conditions
Conclusion
PRIM is intended to expand the professionally managed options for investors meeting the ₹25 lakh minimum by providing a portfolio-management route using eligible direct mutual funds, including index funds, ETFs and SIFs.
It is not simply a lower-ticket replacement for traditional PMS. PRIM operates through a more defined fund-based investment universe, while conventional PMS offers broader portfolio flexibility.
Investors should therefore compare PRIM, mutual funds and traditional PMS based on investment objectives, risk tolerance, costs, tax implications and the level of professional management they need. The ₹25 lakh minimum is an entry criterion, not an indication that PRIM is appropriate for every investor who can meet it.
Frequently Asked Questions
PRIM stands for Portfolio Management Service Route for Investment in Mutual Fund units. It allows portfolio managers to construct portfolios using eligible direct mutual fund products.
The notified PRIM regulations prescribe a minimum investment of ₹25 lakh per client.
PRIM operates through the portfolio-management framework but has a more restricted, fund-based investment universe than traditional PMS.
PRIM uses eligible mutual funds, ETFs, index funds and SIFs, while traditional PMS can invest across a broader permitted securities universe. PRIM also has a ₹25 lakh minimum compared with ₹50 lakh for standard PMS.
The notified PRIM regulations permit investment in direct plans of mutual funds in India, including index funds, ETFs and Specialised Investment Funds.
Yes. The notified regulations permit PRIM portfolios to invest in direct plans of mutual funds in India.
Yes. ETFs and index funds are included within the permitted investment universe.
Yes. Specialised Investment Funds are included among the eligible products.
The fee structure and other applicable costs for PRIM offered by existing portfolio managers will depend on the conditions specified by SEBI. Investors should review the applicable fees and underlying fund expenses once these details are available.
Investors meeting the ₹25 lakh minimum may be eligible, subject to applicable SEBI conditions and the terms of the relevant investment approach.
Not automatically. Suitability depends on the investor's goals, risk profile, liquidity needs, costs and preference for professional portfolio management.
PRIM may suit investors seeking professional management of a fund-based portfolio, while traditional PMS may suit investors seeking a broader securities universe. The decision should be based on portfolio needs rather than the minimum investment alone.