Manage other people' accounts?

Some people asks me to manage their accounts -in common brokers like Optionsxpress, Think or Swim, E*Trade-, and share profits.

This will be my first step in the profitable business of managing other' people money.

Neither me nor my clients are US citizens / residents.

Is there some special account, or written agreement that will help me?
Any other suggestions?


Thanks a lot

 

To start off, I think what you're doing is illegal w/o licensing, not sure though.

Couple issues first:

1. If you blow out their account, they could possibly sue you, or even worse, claim to the broker that they didn't make the transactions and demand their money back (which will trace the activity to you and now you're in some hot water)

2. If you make a profit, they could just straight up refuse to pay you. Very little legal recourse for you.

If you want to do it,

DEFINATELY DEFINATELY make a written agreement, CLEARLY stating the risks of trading, etc.. and clearly stating what the profit split is, and how losses are handled, and the time span on which you get paid, etc.. put EVERYTHING in the written agreement.

From experience, when things money related are done between 2 unrelated parties and are not done in writing, shit goes wrong.


Oh.. and check out IB's "Advisor Account"

 

That depends on the rules of the country he and/or his clients reside in.

As a non US manager handling non US accounts you don't need to register as a CTA with the NFA. Local regulator probably has some rules though (they always have ).

 

you have to register in your residency country. and in most countries i know, the regulator doesn't allow that or establishes extremely high hurdles.

if they do allow you, dont do that as part of verbal agreement as pointed out earlier before. chances are, you're end up in court or in prison.

either way, i'd recommend starting an investment/trading pool instead, which can have several shareholders and allows you to conduct the trading with limited liabilities and without any special authorization from regulators.

check with your lawyer.

 

would certainly check with the local regulator (usually they're quite helpful). where I live trading pools definitely are regulated (and quite costly to set up and run).