Negotiating account management fee - please advise

[smbtnt]

Hi,

I am looking for advice from experienced forum members on managing a trading account. I am currently trading my own modest trading account for the past 2 years, fulltime and profitable for 1 year.
I was introduced to a certain individual by a member of my family who would like to invest in my account. The sums being offered to initiate the account are ten times my current trading pot with intentions of increasing this every X months depending on performance.
However, there are a few complications in negotiating fees and ROI between the parties.
1) The investor would like me to assist his 'friend' who is a relative novice in trading my setup by executing mirror trades in the proposed account.
2) The investor would like to split the account 50-50 between the 2 parties i.e investor and friend being one party, myself and the family member who introduced me to the investor being the other.
The opportunity to trade an account of this magnitude and the increase in leverage offered attracts me a great deal but the proposed account split is something that I am not sure about.
I did not bargain for the family member ( a good friend of the investor) who introduced me to the investor to receive a split of the profits and I most certainly did not expect us to act as one party in this agreement.
I would be receiving approx 40% of the net profits on a monthly basis, the family member would receive 10% and the investor and the novice trader 50%.
Is this a fair split considering I am bringing the most to the table? Should the family member receive a monthly flat rate just for introduction? is 50% a fair split? How would I tackle the scenario of when the novice trader becomes proficient and is a position to solely trade the account in X number of months/years?

I would appreciate advice on this matter.

Thanks

 

[Crap Buddist]

I dont like the sound of it, but its down to you and you are sounding concerns on it already.

I'd prefer if you work out a fair rate and tell the wanna be trader to keep his nose out. I just dont like that at all.

I think you should give them the terms to be honest mate.

Good luck.

 

[Cigar]

Why not let the main investor pay the introduction fees. You just ask for what you want.. there'll be less emotional hassle that way. If he gets paid £100/£1000 a month, thats their business. All the better if you didn't know.
About the newbie, even if you teach him, who's to say he will become a good trader. Maybe increase your %age by explaining how long and difficult this training would be. Even if the guy becomes good and the main investor pulls his money for his mate to trade.. well, you've made some money. Nothing to say the main investor will stay for ever anyway.
Remember, 40% of something is better than 0% of everything (been there, got that teeshirt)

I'd just view it as a short term business opportunity.

 

[north5]

Only you can decide if it's fair. At the end of the day you must be happy with the deal, if you are not then it will come back and bite you in some form (diagreements, falling out etc).

One thing I would say is that I would be looking for a cut of all future profits from the novice trader if I trained them up and made them profitable with a system.

 

[Paul71]

Hi,

I am looking for advice from experienced forum members on managing a trading account. I am currently trading my own modest trading account for the past 2 years, fulltime and profitable for 1 year.
I was introduced to a certain individual by a member of my family who would like to invest in my account. The sums being offered to initiate the account are ten times my current trading pot with intentions of increasing this every X months depending on performance.
However, there are a few complications in negotiating fees and ROI between the parties.
1) The investor would like me to assist his 'friend' who is a relative novice in trading my setup by executing mirror trades in the proposed account.
2) The investor would like to split the account 50-50 between the 2 parties i.e investor and friend being one party, myself and the family member who introduced me to the investor being the other.
The opportunity to trade an account of this magnitude and the increase in leverage offered attracts me a great deal but the proposed account split is something that I am not sure about.
I did not bargain for the family member ( a good friend of the investor) who introduced me to the investor to receive a split of the profits and I most certainly did not expect us to act as one party in this agreement.
I would be receiving approx 40% of the net profits on a monthly basis, the family member would receive 10% and the investor and the novice trader 50%.
Is this a fair split considering I am bringing the most to the table? Should the family member receive a monthly flat rate just for introduction? is 50% a fair split? How would I tackle the scenario of when the novice trader becomes proficient and is a position to solely trade the account in X number of months/years?

I would appreciate advice on this matter.

Thanks

There's two people in this, you and the investor, fcuk friends, family and teaching. Who's got the most bargaining power?

Don't become the investors b!tch.

He thinks he can buy what you've got.

If you're confident enough of your ability smbtnt, why are you even thinking about anything that doesn't take the investor for a ride. Rip his balls off mate, make him do the thinking.

Go for it, kid!

 

[tech_trader]

Well seeing as how it is your methodology, you have the upper hand.

1) don't teach your strategy to anyone
2) a typical money manager charges 2% management and 20% incentive. If you are receiving 40% of the profit, it is a pretty good deal.