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?
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.
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.
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.
With monthly fees, the Clients will see less sag in their statements. IMO, monthly is the only way to go.
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.
How many accounts and funds can you accumulate in IB Master Account. Sounds something a start up advisor can work on.