Help Please - managed accounts

I am inthe process of setting up a small fx managed accounts company. I intend to trade my own account and then duplicate the trades with clients accounts allocatin the size relative to what they invest. This keeps it simple as I can use power of attorney to trade their accounts. The accounts will be in their name so it will be tax free for them and I intend to invoice them for a percentage of profits on a quarterly basis. I have 2 main questions ...
1) system wise I have looked at all the systems and am still no sure. I will be quite active and would like to get a system that can apportion my trades over the client accounts or duplicatethe trades .. The best so far for me is CMC... i have not seen them mentioned on the forum.. so am i missing something ?

2_) regulation wise.. i can do this for friends and family but to expand and maybe advertise the irish regulation system is crazy.. i will require compliance officers etc !!! is their any way around this ?

Get a lawyer and listen to her when she tells you not to go asking for legal advice from random strangers on a message board.

jj

beekeeper said:

I am inthe process of setting up a small fx managed accounts company. I intend to trade my own account and then duplicate the trades with clients accounts allocatin the size relative to what they invest. This keeps it simple as I can use power of attorney to trade their accounts. The accounts will be in their name so it will be tax free for them and I intend to invoice them for a percentage of profits on a quarterly basis. I have 2 main questions ...
1) system wise I have looked at all the systems and am still no sure. I will be quite active and would like to get a system that can apportion my trades over the client accounts or duplicatethe trades .. The best so far for me is CMC... i have not seen them mentioned on the forum.. so am i missing something ?

2_) regulation wise.. i can do this for friends and family but to expand and maybe advertise the irish regulation system is crazy.. i will require compliance officers etc !!! is their any way around this ?

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u r joking r'nt u

sorry didn't want to waste to many real words

Beekeeper,

Expanding on Mr Belflan's profund analysis, I will offer you mine: this is a wind-up, right?

Re Mathemagician's remark, ignore this. I'm telling you it can't be done unless you are regulated (and have an awful lot of money and background to achieve it).

Grant.

believe it or not i am not joking.. i have 2 large clients who are family friends so i dont require regulation. Will be leaving with just those 2 for first 6 month or so and in the meantime will look into a wayaround the regulation. I think settig up outside of EU is bestbet. Am i mad ?? What aboutthe system ??

beekeeper said:

believe it or not i am not joking.. i have 2 large clients who are family friends ....

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Not for much longer!:whistling

Beekeeper,

Which country were you thinking of moving to? The nearest I'm aware of is Andorra.

"The accounts will be in their name so it will be tax free for them." How do you work this out?

"will look into a wayaround the regulation" Are you a QC or do you know any?

"regulation wise.. i can do this for friends and family". Not if your deriving a financial benefit.

Grant.

Beekeeper -

Good luck in this mate, I am in the same situation. However, in the US, there isn't too much in the way of regulation that I can find. It might be different in the EU.

None the less, talk to a lawyer, and get all your bases covered before starting. It's where I am at right now.

beekeeper said:

I am inthe process of setting up a small fx managed accounts company. I intend to trade my own account and then duplicate the trades with clients accounts allocatin the size relative to what they invest. This keeps it simple as I can use power of attorney to trade their accounts. The accounts will be in their name so it will be tax free for them and I intend to invoice them for a percentage of profits on a quarterly basis. I have 2 main questions ...
1) system wise I have looked at all the systems and am still no sure. I will be quite active and would like to get a system that can apportion my trades over the client accounts or duplicatethe trades .. The best so far for me is CMC... i have not seen them mentioned on the forum.. so am i missing something ?

2_) regulation wise.. i can do this for friends and family but to expand and maybe advertise the irish regulation system is crazy.. i will require compliance officers etc !!! is their any way around this ?

Click to expand...

Hi Beekeeper,

Just to reassure you that you're not mad, this is something that I have looked into doing quite seriously for some time......so maybe we are both mad.

Having traded and mentored in U.S. Stocks for a number of years, I (like you) have investigated the possibility of trading on behalf of others via Power of Attorney. The best system I have found to implement this is the Friends & Family Advisor account provided by Interactive Brokers which allows you trade up to 15 accounts from 1 Master Account. This system even allows you to set up fees that are charged directly to your clients' broker accounts with their written permission, which is given when they submit a signed Power of Attorney form to IB to allow you to trade their account.

IB maintain that this is all legal and above-board because all your "clients" are doing is effectively giving you permission to access their account similar to a joint account. I would add however that the charging of fees directly from their account using IB's system enters a grey area in terms of legality. Also, you would not be allowed to actively market and advertise this as a business.....that is strictly against FSA regulation.

I know a number of people who have operated this Power of Attorney setup for a number of years for multiple "clients" - it is all done on a gentlemen's aggreement basis and it works for them as a business arrangement - I'm not saying it's 100% legal or that I agree with the setup, but it works for many people.


Thanks

Damian

Professional U.S. Stock Trader

Damian,

The US environment is irrelevant here. This is strictly FSA terriority.

We have a saying in Enland - "Been there, done that". Well, I've been there and done it, so I know what I'm talking about.

Grant.

Ok,

Well I see nobody is actually offering any help here. I think comments like "they used to be your friends" is really a waste of time.

Talk to a lawyer....it's obviously the only person who can help you with it. I do not know the UK regulations myself.....I wish I could be of more help.

Best of luck in your search.

grantx said:

Damian,

The US environment is irrelevant here. This is strictly FSA terriority.

We have a saying in Enland - "Been there, done that". Well, I've been there and done it, so I know what I'm talking about.

Grant.

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Hi Grant,

Being as I'm an Englishman with a UK Passport whose lived in England for 30 years, I'm well aware of the sayings that you have in England, thanks - LOL.

I trade U.S. Stocks and Options, but have never lived in the U.S., so everything in my post above is based around being in the UK, although I have recently moved to Dubai about a year ago.

I wasn't for one minute suggesting that you did not know what you were talking about - in fact, I am quite sure you probably know far more about the topic than me - I was just giving my opinion, which is what we all do here.


All the best,

Damian

Porfessional U.S. Stocks & Options Trader

Cheers for allthe advice lads. I am meeting a solicitor this week aboutit and willlet you lads know how i geton. In the meantime I will have a look at IB's system.

Thanks again.

Damian,

I'm afraid I added 2+2 and got 5 - "Professional U.S. Stock Trader" threw me. My apologies.

Good Trading,

Grant.

grantx said:

Damian,

I'm afraid I added 2+2 and got 5 - "Professional U.S. Stock Trader" threw me. My apologies.

Good Trading,

Grant.

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LOL - probably my fault.....I will change my signature so as not to mislead.....


Thanks

Damian

Just one thing!!

Unless you have at least $5m AUM. I think every IB in the world except for Bear Sterns will laugh at you.
However if you are well capitalised there are a few firms in the city which might be able to help you.
The biggest one is called PCE Investors. Try them, but make sure you have at least £200K as start-up capital and at least $2M AUM. Unless you can do things this way you are going to have a hard time getting up and running.

If Timothy Sykes can start a hedge fund, so can you. Start small and work your way up. You'll need a good trading track record and make it official by hiring an accountant. There are tons of books on starting a fund. I do not know all the regulations, so get legal help and start reading.

Although startups can be costly AND risky, so it's good to have the trading skills, as well as people skills.

It's too bad some members here are complete A-holes and not willing to even give a hint of advice.
If you don't post something constructive, don't post at all (Belfan! not to point any fingers spelling is important by the way!)

Mr.J-Arthur said:

If you don't post something constructive, don't post at all (Belfan! not to point any fingers spelling is important by the way!)

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UNDERSTANDING MATHS IS JUST AS IMPORTANT Mr.J-Arthur!

Beekeeper .. How are you getting on? Have you resolved your issues or are you still looking for answers?

That's b*S*.

from what I beleive if you are not actually taking control of the money (ie power of attorny right sto trade the $$ through the brokerage) and it is friends and family you are fine. All this "you need legal advice, can't be done is complete hogwash."

Tell me why this cannot be done? You do not need to be regulated for what he is proposing.

Re Mathemagician's remark, ignore this. I'm telling you it can't be done unless you are regulated (and have an awful lot of money and background to achieve it).

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