Can PMS charge exit load on transmission of units/investments to the nominee after the death of the investor within a period of 2 years from the date of investment in PMS (Port Folio Management Plan)? Apart from this, PMS has also levied management fee for two consecutive quarters and still the transmission is not complete.
—Name withheld on request
Based on the limited facts stated in your question, is the exit load allowed on redemption of units or Investment. In my view, transmission can be viewed differently than redemption, as in the case of transmission it is the transfer of units or investments, triggered by a natural event. However, this is subjective and depends on the PMS provider and the service agreement, if they want to waive the exit load.
Management fee will be applicable on management fee charged during transmission, if managed by the PMS provider during the investment process. Unless the provider agreement mentions any waiver of management fee during transmission, which is highly unlikely.
You may also note that if you decide to liquidate or redeem your PMS after the completion of the transmission process within the exit load period, you will be charged the applicable exit load based on the PMS agreement.
Harshad Chetanwala, founder of MyWealthGrowth.com, replied. Have personal finance questions? Send an email to mintmoney@livemint.com
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