Family offices and Portfolio Management Services are increasingly intersecting in the Indian wealth management landscape. This article explains where they intersect for a CA-led practice.
The Rise of Family Offices in India
Growth of Family Offices
In 2018, India had just 45 known family offices. By 2024, that number has jumped to nearly 300. The signal is clear: wealth in India is becoming more organized.
Wealth Allocation
Family offices are allocating capital across PMS, AIFs, global funds, and startup syndicates. PMS and AIF have become central to family office portfolios because the regulatory and tax treatment around them is now well-defined.
The Intersection of Family Office and PMS
PMS as a Core Service
Portfolio Management Services let a professional fund manager handle a client's equity portfolio on a discretionary or non-discretionary basis. For family offices, PMS forms the workhorse of their investment portfolios.
Advisory and Compliance Support
CAs can provide portfolio accounting and audit support for HNIs, family offices and PMS and AIF clients. This work covers consolidation of holdings across brokers, custodians and platforms, NAV and cash reconciliation, corporate-action tracking, and accurate capital-gains computation.
Opportunities for CA-Led Practices
1. Portfolio Accounting
CAs can provide portfolio accounting services for family offices and PMS clients, including:
- Consolidation of holdings across brokers and custodians
- NAV and cash reconciliation
- Corporate-action tracking
- Capital gains computation
2. Tax Advisory
CAs can provide tax advisory services for family offices and PMS clients, including:
- Income tax planning
- Capital gains optimization
- GST compliance
- FATCA/CRS compliance
3. Audit and Compliance
CAs can provide audit and compliance services for PMS businesses, including:
- Annual compliance audit
- Performance audit
- Net worth certification
4. Structuring Advisory
CAs can provide structuring advisory for family offices and PMS businesses, including:
- Investment vehicle selection
- Fee structuring
- Regulatory compliance
Regulatory Considerations
SEBI's Proposal
SEBI has proposed allowing AMCs to manage non-broad-based pooled funds without PMS licences. This has sparked debate over regulatory parity, competitive fairness, and market safeguards.
Compliance Requirements
Family offices and PMS businesses must comply with:
- SEBI (Portfolio Managers) Regulations, 2020
- SEBI (Alternative Investment Funds) Regulations, 2012
- Income Tax Act, 1961
- GST regulations
- FATCA/CRS requirements
Building a CA-Led Family Office Practice
Service Offering
- Core Services: Tax advisory, audit, and compliance
- Wealth Management Services: PMS advisory and structuring
- Family Office Services: Estate planning, succession planning
- Investment Services: Portfolio accounting and reporting
Client Segments
- Single Family Offices: Wealthy families with their own family office
- Multi-Family Offices: Platforms managing multiple families' wealth
- HNI/UHNI Clients: High net worth individuals and families
Expert Legal Guidance
Anuj Desai & Associates provides expert legal advisory services on family office and PMS structuring for CA-led practices. Our securities law and tax experts help firms build compliant family office practices and serve HNI/UHNI clients. Contact us for guidance on family office and other regulatory matters.