I am not a professional financial investor/trader. I don't have any professional licenses in financial field. However, due to the success of management of my own account, some friends ask me to be their account manager. Can I charge management fee as my W2 salary? Thanks in advance for any advises.
I handle managed accts and I dont charge any mgmt fee. I personally feel that I should only be paid if I make money for my clients. Im my opinion, charging a mgmt fee is like asking for some "spending money" in case you don't produce positive returns for your clients. Is that the way you wanna come across to your clients?..... especially your friends ?? Charging a mgmt fee is like the big banks charging misc fees to their clients to make extra money. In the long run, this shows greed and a lack of integrity, IN MY OPINION.
If you have incurred additional overhead costs to trade for your clients than a fee might be appropriate, albeit a very small one. The answer to your original question is yes, you can charge a fee and it is taxable income. Don't expect your clients to provide you with a W2, however.
From: http://www.cftc.gov/industryoversight/intermediaries/cpoctaexemptionsexclusions.html "Exemption from Registration as a Commodity Trading Advisor Section 4m(1) of the Commodity Exchange Act (CEA), 7 USC 6m(1), provides an exemption from registration for a person who, in the preceding 12 months, has not furnished commodity trading advice to more than 15 persons and who does not hold himself out generally to the public as a commodity trading advisor (CTA). " I'm trying to figure out if it is legal to charge performance fees if one fits to the criteria above. Not operating a pool but has power of attorney to trade futures for clients' individual accounts and has less than 15 clients. Especially for the case the clients not being "sophisticated investors"... Thanks!
I myself am in the same situation i have just got back into trading after getting fired up from some friends that were interested in trading commodities but didnt have any experience with them i used to be an ap and have a series 3. I have been trading there accounts for a couple months as a favor they are close friends fortunately for them there accounts are up 100k or 50 percent. I was also very interested in charging a performance fee without being a cta under the exemption.