How do you legally trade/manage other peoples money?

Discussion in 'Professional Trading' started by orbit23, Feb 18, 2020.

  1. orbit23


    Let's say you have a good track record and you have investors ready to back you with capital.

    How do you even legally manage that? What is the cost of compliance? What is the minimum amount of money for you to manage to be worth it? Can it be 100k-1M$?

    Do they just send you the money, do you manage the money through their brokers account? Can you take money from accredited investors, or from anyone?

    Can this even be done legally?

    I am from europe, but any experience would be useful. I have neither of the criteria as of right now, but am curious if it is possible down the hall in the next few years.
    CannonTrading_Ilan likes this.
  2. easymon1


    start with your family and piss them off real good first.
    orbit23, jys78, SteveH and 3 others like this.
  3. Overnight


    Prolly want to speak with a Euro lawyer who is experienced in that field.
  4. apo99


    I have about 1m$ of friends and family money, they were averaging 9-10% percent for a while, so i just made it as a loan were i was paying them a flat 9% a year. Much easier that way for small amounts. When i make less which i haven't yet, i pay out of pocket, i keep the difference when i make more
    cruisecontrol, leon7 and billv like this.
  5. TommyR


    yeah what you do right you go to these lawyer experts. they will make the legal structure where they can put money in. at 1 million you can just trade with a broker who has clearing agreements with the exchange and deposit with him and then carry on as was. i see it as pointless. i would say before they can invest they have to agree some amount of it is going to be used to pay for the infrastructure projects, the computers, the new fibre optic G network, the cost of migrating onto each exchange with colocation in terms of engineers programmers hardware etc and some of the bills, in return they will not be forced out and will be allowed to leave their money in the fund up to 100x . they have to add something with their money exactly as it would be used in a normal business not just expect all energy to be spent making their 1m grow to 2m inside 2 months.
  6. gaussian


    When you're trying to avoid getting into battle with slimeballs, hire a slimeball of your own.

    Get a lawyer.
  7. wrbtrader


    Don't do it nor mange money for family members.

    Regardless, you're going to need a license regardless to the country you're in and maybe a little more than that considering you're in Europe.

    Yet, if you're really set on doing such...concentrate on getting the proper licenses considering you seem to be talking about more than a few people. Also, talk to your broker about "manage accounts" and the requirements for such.

    Seriously, talk to your broker in Europe...not this forum. Something else, if you manage the money of others, your broker will change your status from individual to professional without notice.

    Next, they will begin charging you professional fees that's going to cost you a lot more than the fees as an individual. Here's the part that sucks, after you've been classified as a professional...its going to follow you to other brokers even if you're no longer managing money of others.

    When that happens, you're going to need to jump thru a burning fire to be classified again as an "individual".

    Last edited: Feb 19, 2020
    jackfx, gaussian and comagnum like this.
  8. MrMuppet


  9. d08


    That's not true at all. With family, probably the easiest way is to set up an LLC and you can do it very cheaply in quite a few countries. Electronic filing and you won't even need an accountant.
    You can also do a loan agreement as @apo99 mentioned, as you're not managing money but took a personal loan, you're not qualified as a professional.
    cruisecontrol, billv and Nobert like this.
  10. icallgod


    I think it is safer to just use the copy trading system set up by some brokers. Let them fund their accounts and copy at their own risk. You don't wanna go to jail do you?
    #10     Feb 19, 2020
    SteveH likes this.