MAM Accounts

MAM (Multi-Account Manager) profiles allow traders to hand over their investments to skilled fund managers in the financial markets, whilst also maintaining a level of control over trades. The best MAM account managers offer competitive performance indicators, flexibility and access to reputable platforms such as MT4. This review explains how to open an account and ranks the top UK forex brokers with MAM accounts:

What Are MAM Accounts?

MAM, Multi-Account Manager, accounts permit professional fund managers to trade on behalf of multiple retail clients. MAM accounts are suitable for both beginner traders with limited market knowledge, and for high-net-worth individuals looking for a hands-off approach to investing.

Traders can choose a fund manager with a proven track record, with experience in trading multiple assets. Pepperstone and Vantage FX, for example, allow fund managers to trade forex, stocks, indices, and commodities on behalf of customers.

Typically, retail traders can set criteria around how trades are executed, meaning they maintain control over how their personal funds are invested. This may include the restriction of certain stocks due to non-compliance with ethical practice or the amount of leverage being used to reduce risk.

How MAM Accounts Work

Fund managers can manage risk from one profile, executing trades on behalf of their customers simultaneously – typically in ‘blocks’. Professional investors will look after multiple trading accounts in a single master account.

A pre-defined profit split will be taken by the fund manager, known as a performance fee, often every month. Let’s say four investors are part of one ‘pool’ of traders. Investor A deposits £20,000, Investor B deposits £25,000, Investor C deposits £15,000 and Investor D deposits £40,000. The MAM account will therefore hold a total of £100,000.

If the money manager trades with the full amount of money and a £10,000 profit is made, each investor receives a split of the funds. The fund manager then takes a 10% performance fee, receiving £1,000. The remaining profit of £9,000 will be split between the four investors based on their initial deposit weighting:

• Investor A receives £1,800
• Investor B receives £2,250
• Investor C receives £1,350
• Investor D receives £3,600

Investments can be executed in professional trading platforms. The Axi MAM account, for instance, provides pro traders access to the popular MetaTrader 4 (MT4) terminal.

How To Get Started With A MAM Account

It is relatively straightforward to open a MAM account. We outline the basic method to get started, though this may vary slightly between brokers and forex-managed MAM accounts:

1. Choose a broker that offers MAM trading accounts – Select a well-known and trusted brand that holds a license with the Financial Conduct Authority (FCA) in the UK. Popular MAM brokers in the UK include Pepperstone, AxiTrader and FXTM.
2. Register for a trading account – Once you have checked that you are happy with the trading terms, including minimum funding requirements and selection of assets, fill out any required account registration forms with the broker.
3. Select a fund manager using the published performance statistics – Look for key performance metrics, reliability ratings and any fees that they charge.
4. Set your trading criteria such as attitude to risk and investment parameters – Make sure to spend some time researching the criteria you can set with the money manager. Once this is done, they can begin trading on your behalf.

Before you sign up, review the terms and conditions in the agreement with the fund manager. Many MAM account brokers will provide a Limited Power of Attorney (LPOA), a document that oversees the manager-investor relationship.

Pros Of Brokers With MAM Accounts

• Performance metrics – The best brokers publish a range of performance indicators of fund managers including full trading history, profit gains, and popular assets being traded. This can help you determine which MAM advisor to trust with your capital.
• Flexibility – The majority of brokers with MAM accounts offer retail traders the flexibility to control and manage trading activities to some degree. This may include the opportunity to pull out of an account if the performance of the professional trader slips.
• No market knowledge needed – A key advantage of using a MAM account is that previous trading experience or expertise in the financial markets is not essential. Instead, the fund manager is the experienced investor. Pepperstone MAM account professionals, for example, are required to have a minimum of three years of trading experience.

Cons Of Brokers With MAM Accounts

• Risk – Investments made via MAM accounts still incur the risk of losses and are not sheltered from market volatility. Losses can exceed the initial capital deposited if the fund manager is not careful. Remember that previous performance history does not guarantee profits and you should never invest more than you can afford to lose.
• Fees – The fund manager will be entitled to a performance fee for managing the investment pool. This could be anywhere in the region of 1-20%. This is typically a set percentage calculated on the trading gains, though commission charges may also apply to executed orders. There may also be a minimum account balance requirement to be accepted by a MAM fund manager. FP Markets, for instance, has a minimum deposit requirement of £100.

How To Compare Brokers With MAM Accounts

• Withdrawals – It is important to understand whether you can withdraw your funds/profits at any time. For example, some brokers with MAM accounts may set a fixed payment timeline or expect a certain number of trades before you can withdraw.
• Fees – Costs are an important factor when comparing brokers with MAM accounts. The fee structure will determine the amount of profit that will be taken by the fund manager. Ensure you are aware of all the charges involved with trading, including any commission fees per trade and a monthly/annual service charge. It is also important to determine whether a minimum investment amount is required. This could be anywhere from £100 to £50,000.
• Dashboard Interface – Access to an intuitive MAM account dashboard via a broker-dealer is important. You will want to be able to view the trading history of the fund manager, with real-time performance statistics. The interactive platform should also allow you to customise investment criteria.
• Customer Service – Contactable and responsive customer support is key when investing your money with a fund manager. Live chat or telephone may be the most appropriate method if any issues arise, particularly if you notice any performance slips.
• Assets – Is the fund manager able to invest in a range of asset classes via the broker on your behalf? This can be useful to protect investments against sector volatility and reduce risk. Having a choice of instruments is also useful if you wish to trade independently outside of your MAM profile. The Interactive Brokers MAM account, for example, provides trading opportunities across stocks, forex, funds, options, and futures markets.
• Security – Although you are investing through an experienced professional, profits are not guaranteed. Fortunately, the best MAM account brokers provide plenty of information about their listed agents. Pepperstone, for example, requires MAM account partners to have relevant qualifications and experience to be able to trade on their terminal.

Bottom Line On MAM Accounts

Brokers with MAM accounts offer a hands-off solution to online trading. They may be suitable for those who don’t have the time to source profitable investment opportunities, or who lack the experience to trade forex, for example. Key features to look for include minimum investment requirements, flexibility around changing criteria, and competitive funding terms.

See our table of the top UK brokers with MAM accounts to start trading.

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