5 Tips For Selecting A Reliable & Reputable Forex Money Manager
Before you onboard a new forex fund manager to your brokerage, consider some of the suggestions offered in today’s article.
It’s quite common for new forex brokers to open their doors to any fund manager that approaches them. The consequences of this decision, however, can have severe long term implications. Forex brokers should take careful consideration when selecting a new fund manager or forex fund management system. From our experience, “guilty until proven innocent” is the suggested approach to take when evaluating new fund managers. Consider these 5 guidelines when selecting a forex fund manager:
1. Profit Sharing Should Always Be A Win/Win
Money managers who are only looking to earn revenue on volume should be rejected on the basis that their interests conflict with the investor. It’s simply too tempting for the manager to “churn” or overtrade the account and all too easy to walk away if things go sour. Such a scenario inevitably leaves the broker holding the bag. If the money manager under consideration is only looking for performance based remuneration, that’s a good sign.
2. Consider the Reputation of Your Brokerage
Selecting an unreliable forex fund manager can quickly leave your brokerage with a bad reputation that could be disastrous to the future of your business. Not only could your broker’s name be tarnished, should the managed fund go belly up, sooner or later the investors will be knocking on your door. Although a short term spike in revenue from a fund manager can be lucrative, selecting the wrong manager can end up being a long term lose/lose for your forex brokerage.
3. Always Verify the Performance of the Forex Fund Manager
As a matter of good practice, you should demand to see live account statements or performance results on a trusted site such as Myfxbook. A trustworthy fund manager should have nothing to hide and be more than willing to brag about a positive track record. If you run into excuses when asking for performance figures, or only receive trading statements that look questionable, this is a major red flag.
When evaluating potential forex fund managers, it is always best to exercise caution as a poor choice can lead to potentially severe long term consequences.
4. Think Long Term
Managed account services can add additional workload to a brokerage when one factors in the steps required to get the fund management system running: account creation, processing of payments, servicing clients, and the technical configuration of the PAMM or MAM managed account system are just a few examples. Because of the workload involved, it makes sense to only partner with a reliable forex fund manager. Not only could a poor choice create some of the problems outlined previously, it may also lead to a massive strain on staff and system resources.
5. Use Your Best Judgement When Choosing a Forex Fund Manager
Despite the negative reputation often associated with forex fund management companies, there are indeed reliable forex money managers in this industry. With that in mind, if you are on the fence about a particular fund manager, from our experience it is best to reject the offer. Although reputable fund managers are not easy to find, if you are truly intent on offering money management services and are having difficulty locating a reliable partner, we are able to assist you further.
Atomiq Consulting – Forex Fund Management Services
If you are looking for a reputable forex investment company to partner with, we are more than happy discuss our forex managed account services in further detail. In addition, as part of our services at Atomiq Consulting, we are more than happy to provide a professional assessment of a forex money manager currently under consideration by your brokerage. To discuss either offering in further detail, don’t hesitate to contact us today!
