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Are you interested in becoming a forex account manager?
If the answer is yes, you are in the right place. Here we will go through everything you need to know in making that step. Not only will we help you find some of the top pamm account brokers offering the best managed forex trading account options, but we will also guide you step-by-step.
Let’s get started.
How to become a forex account manager
Becoming a forex account manager, there are several steps you should follow. These are detailed below to help you know where to get started.
Learn about the forex market
Absolutely, you will need to know a lot about the forex market. You are going to be managing funds for others who will expect that you have the professional knowledge they may not have, and the ability to be successful in providing returns.
Some professional working experience in trading and finance will be helpful, along with accreditations and qualifications in the field such as bachelor’s or master’s degree in Finance and similar areas with prior trading experience.
Improve your skills and make profits
As mentioned, you will be trading on behalf of clients who will expect the best and a profitable return. This means you have to stay on top of your own trading skills and never stop improving.
Trading for yourself is a great thing to continue doing. This helps you build confidence, knowledge in the market, and a positive trading history to show your investors.
Open a trading account for practice
Once you have found a respected and well-regulated broker to deal with, you should open a trading account both to practice and get used to what they offer. This also helps you to keep building your own reliable track record in trading.
Check out our list of the best micro forex brokers to help select a broker with small accounts you can open.
Launch a website or blog
Beyond just having a broker and being available, you may want to increase your visibility and give your investors methods to contact you directly. Your own website or blog is perfect for this.
It can help solidify your credibility with clients as well as being a great tool for communication, marketing, and ultimately increasing your investor base.
Open a managed account with the broker
When you are ready, you can get your managed account open with a broker. You will need to choose an excellent and reputable broker offering PAMM or MAM accounts based on your needs. You will then be ready to start managing money.
For help choosing, you can read our article on the best PAMM Forex brokers to see some of the top choices.
Do you need to be licensed to become a fund manager?
With most brokers, you will need to be licensed. This may be different for offshore clients in which case you may not require it, though the regulation in most countries will be such that licensing is required.
Even as a fully licensed and regulated fund manager, you will need to comply with several laws and regulations.
Firstly, you should complete a detailed questionnaire related to your own financial situation and approach to risk. You also need to have a net worth of at least $100,000 and should not use more than 15% of this net wealth for investing.
There will typically be a fee of $100 for each new client and around $50 in annual admin fees. There is also a monthly fee of $5.000 to maintain regulation as a corporate authorized representative.
How does a fund manager earn money?
When it comes to earning money as a fund manager, you will typically be able to set your own fees and minimum deposits depending on the broker.
All of these are clearly agreed in advance with investors who sign-up, and these will be your key ways to earn.
A performance fee can be paid based on your profits for an investor. This kind of fee is typically no problem as the investor is also happy given that you and in turn they, have made a profit. It can vary from 10% up to as much as 30% of the profit amount.
This kind of fee is based on a percentage of the spread in each position you open. With this type of fee, you will be paid win or lose based on the volume you trade.
This type of fee may not be well received by traders since you will be earning even on losing positions for them.
This fee is usually charged as an annual fixed fee for the management of your client’s money. It can also help you sustain your operations even during losing periods. While investors may not love this kind of fee, they can usually accept that you still need to earn.
A management fee can also help you manage risk better and potentially stop you from chasing riskier trades in order to make a profit.
How to become a forex account manager FAQs
How do I become a forex account manager?
To become a forex account manager you need to open an account with a broker by proving to have relevant trading experience. It is also beneficial to have a personal website in order to show your trading records and make yourself known to all the possible investors.
Do you need a license to manage forex accounts?
This depends on each country’s regulations. The general rule is that you need to be licensed to manage other people’s money. You might though, find brokers who are willing to let you manage other people’s money without a license but only to offshore clients.