First and foremost, mutual funds are not risk free. There are risks in equity funds, index funds, debt funds and even in liquid funds. There is no assured return and it is entirely based on market forces. Obviously, you may have found it hard to believe that any idea or product could have only advantages and no risks. The PMS advisor was transparent enough to explain the risks of a PMS to Vijay. There are basically two risks in any PMS. Firstly, when a PMS invests in equities, there is a market risk that you cannot avoid despite the best of research and in-depth market insights. When you have situations like the sub-prime crisis in 2008, all PMS schemes are likely to be hit negatively. Secondly, PMS depends on few HNW investors for a bulk of their corpus. If a few large HNW investors decide to withdraw money from PMS, it can put tremendous strain on the PMS and impact your performance. Of course, this risk is not too pronounced in case of reputed PMS outfits with good track records, but the risk surely exists. A PMS surely offers some unique advantages to clients. While they may not be available to all investors, PMS can surely add all-round value for HNW investors.