Special joint account

Discussion in 'Retail Brokers' started by murrica, Feb 25, 2013.

  1. murrica


    Hello Elite Trader,

    I have a quick question about possible retail account types that a broker might offer. Interest is in various derivatives (futures / options), but would consider firms that specialize in one or the other, if the right firm(s) can cater to my needs.

    Here's what I am looking to arrange:

    - Open an account and be able to fully own the account: my retail account, my risk, my profits and losses, my taxes, etc.
    - Have a third party of my choosing (individual, not a professional/registered broker/adviser or anything of that nature) maintain complete control over all trade execution. I would not have any control over trade execution via platform or phone, only for moving money in and out and other administrative tasks. E.g. I would be responsible for any margin calls, taxes, etc., etc..
    - Third party who manages the account has no risk to any of their personal assets, either directly or indirectly, legally, for tax purposes, etc. E.g. if any problems arise the liability would fall 100% on me.

    Sorry if the question seems simplistic -- not sure what is the best way to go here, and not sure which broker can accommodate such a need. Do I need to look into trading via LLC? Is it even possible to set it up so I take 100% of the risk (account is basically 100% in my name), and have a third party (individual) manage the account but not really have their name associated with the account for tax or legal purposes? (That seems ambiguous, particularly the legal part, but any and all info on this matter is appreciated).

    Maybe there is a common type of joint or managed account into which I should be looking? Recommendations?

  2. murrica


    Also if anyone has any specific broker recommendations or can point to a link of an account type that (mostly) fits my criteria, please feel free to post here or PM me if necessary.

    Much appreciated -- thank you.
  3. you can give the trader power of attorney over the account (or aspects of the account). You are liable for all the trades they do.
  4. murrica


    Thanks newwurldmn. This sounds along the lines of what I am seeking. However, I likely need to do some additional d.d. regarding the legal implications.

    Taking this one I found as an example: http://www.optimusfutures.com/supp_managed_accounts.pdf

    ..is there anything that the CTA (Commodity Trading Advisor) should know from a legal or tax perspective? Do they need to list anything at all on their tax returns or seek any legal advice of any kind? Just want to make sure all based are covered.. (cya).

    Is there any advantages to forming a business entity? Any protections, etc? Ok to just keep it all as individuals? This would be for me (my money, my account, my liability) and another individual who is not a family member performing as the CTA.

    Again, any and all info is helpful and appreciated. Hoping to get as much info on the table as possible, either directly or indirectly related to my inquiry.

  5. JamesL


    LPA - limited power of attorney

    Just about every firm has the form online along with the account application. It's a simple form to execute. You don't have to worry about giving full power of authority by accident as the firm requires something more than just filling out the online form.+

    With IB, you can setup a login for another person/identity that limits the account activity, i.e. trade only or account management only or a combination of both.
  6. murrica


    Ok, sorry if this has already been answered by you and others, but clarifying this would be very helpful to me.

    I want to be absolutely sure that my chosen trader has absolutely no liabilities of any kind, both legal and tax, and otherwise. Hence, if we have a joint account in my name and my chosen trade has LPA over just the trades, I would like to ensure that this person's assets are not at any kind of risk, whatsoever. And, I want to know if there are any tax implications for this trader (outside of our direct business arrangement), and whether something like a mortgage loan application or their employment status, or their credit, or anything similar, would be affected by their status as having LPA over my account for executing trades only.

    Any and all info is very much appreciated. Again, sorry if this is simplistic or already answered -- just want to be 100% certain.
  7. not sure if this fits the bill but

    ib has a security token. You can't access any account functions like moving money without it

    but you can elect to trade without it

    so the trader only needs the screen name and password

    you hold the security token and can access account management and also the trading screen at anytime

    and if a problem should arise, you can use your security token to change the password at anytime
  8. murrica


    Thanks oldtime -- that's not so much a concern for my situation; I am more concerned about all possible (perhaps unforeseen) liabilities for my trader and their assets/credit/etc/etc.
  9. You say "joint account."

    That is the last thing you want.

    If it is a joint account, both parties are liable.

    It is not a complicated issue. The account should be in your name only. Then he just trades it for you.

    After all, every corporation or trust operates this way. Their employees trade the corporation's account. Do you think the employees are personally liable? Of course not.

    Do you think the account is a joint account? Certainly not.

    Do you think that if I let a CTA manage my account, that it is a joint account? Absolutely not, it is in my name only and he is just allowed to enter trades on it.

    So it is very normal.

    BUT if you fill in the forms and make it a joint account with your trader, you have just made him liable. Of course some broker might suggest that but they are just looking to spread the liability. Ignore them.

    Listing your trader as an authorized trader *only* on the account form is fine.
  10. murrica


    Yes, I think you've highlighted my concerns about accidentally having the trader be liable via joint account.
    #10     Mar 21, 2013