How/When would you take out performance fees?

Discussion in 'Professional Trading' started by pistolpt, May 9, 2012.

  1. Lets say you have a $300,000 IB master account with family and friend sub-accounts. You charge a 10% performance fee & your strategy kicks but and makes them a combined $100,000 one year.

    When would you take that fee out? Monthly? Annually? When they redeem?
     
  2. rmorse

    rmorse ET Sponsor

    Monthly is typical.
     
  3. Maybe someday you can think things through.

    People put money in and they get a return.

    you, as a participant, do more than put money in. You earn fees which, any thinking person knows, are earned and in the fund from the point forward when they were earned.

    So far you don't understand how much money each person has in the fund and especially you.

    When building wealth, no one who is building wealth stops doing it.

    I'm sure you can find a new lawyer who knows something about building wealth to help you rewrite your contracts with these people. Your present lawyer is fairly ignorant.
     
  4. Roark

    Roark

    Yes, you want to get those fees asap, because next month you'll probably lose them $200,000.
     
  5. I would think quarterly so as to let
    profits accumulate more than a monthly
    draw . Plus it will reflect in your % track
    record if you take monthly. You give it
    2 extra months to let money work to
    earn more money.
     
  6. I would think quarterly so as to let
    profits accumulate more than a monthly
    draw . Plus it will reflect in your % track
    record if you take monthly. You give it
    2 extra months to let money work to
    compound and earn more money.
     
  7. heech

    heech

    Like anything else.... it depends.

    I do quarterly, which is not uncommon in the CTA/CPO space.
     
  8. LEAPup

    LEAPup

    With monthly fees, the Clients will see less sag in their statements. IMO, monthly is the only way to go.
     
  9. heech

    heech

    No, you can certainly "show" performance fees every month... But they'd just be liabilities/fees due. That's what I do, but fees only crystallize into my accounts quarterly.
     
  10. toc

    toc

    How many accounts and funds can you accumulate in IB Master Account. Sounds something a start up advisor can work on. :D
     
    #10     May 10, 2012