Advisor account - charging fees

A

alphastocks

I am starting a managed account business and just wanted to discuss a few issues. If I use IB's friends and family account set up, can I charge a performance fee out of the client's accounts? Is that legal?

I was thinking about 100k min and 30% performance fee based on the high watermark.

Appreciate any thoughts on this.

I will probably ask Hannah Terhune over at CMSG to draw up some papers.

Originally I was thinking about setting it up as a hedge fund, but why go through that before I have any investors.

By the way, does anyone know if I can legally market a managed account business, or must it be stealth like a hedge fund?
 
One more thing...

My strategy consists of a long equity portfolio that is hedged by shorting s&p futures. That being said can I manage someone's 401k account under my program?

Anyone know?
 
Quote from alphastocks:

One more thing...

My strategy consists of a long equity portfolio that is hedged by shorting s&p futures. That being said can I manage someone's 401k account under my program?

Anyone know?
More...

I don't see how you will be able to manage 401k assets in this for a number of reasons:

1) The mutual fund provider where the assets are is not about to just send you a check to manage money from their pool of assets.

2) Active 401k money must remain in the company sponsored 401k to keep tax treatement. Unless you are able to get the entire 401k plan, highly unlikely, I don't see how you can do it.

The real option will be OLD 401k money people have sitting at a previous employer and/or current IRA's. OLD 401k money can be rolled to a traditional IRA. Then, it's a matter of if IB allows you to trade futures in an IRA.

There's definitely some issues with trying to manage and trade retirement money. It's much easier to deal with non-qualified funds as the account gets opened, funded, and off you go.
 
You must log in or register to reply here.
Back
Top