Setting up Managed Account vs. hedge fund?

EliteTraderNYC · Mar 13, 2009

I have an individual who is willing to let me trade $1 million of their money (a non-US citizen with an SSN in NYC).

Has anyone here setup a managed account with a profit-sharing agreement and trading authority?

What are the steps necessary? How much does it cost?

I have a Series 7 license, is this enough?

What else? I think setting up a hedge fund is too cost-prohibitive.

Thanks,
EliteTraderNYC

Pekelo · Mar 13, 2009

All you need is love, I mean IB's Family and Friends Advisor Account and you are good to go.

http://www.interactivebrokers.ca/en/accounts/advisors/advisorsMain.php?ib_entity=ca

EliteTraderNYC · Mar 13, 2009

Thanks, do you know if they have profit sharing agreements or do I need to get that separately?

Pekelo · Mar 14, 2009

They do...

toc · Mar 14, 2009

does this mean that 10 friends or family accounts are joint into 1 master account like a mutual fund portfolio? and any stocks purchased say 100 of Intel, are allocated to each account as per their proportion of the Master Account?

If that is true then it should help a lot in keeping mind focused on markets.

CateFul · Mar 21, 2009

just curious
do you need to be licensed to run a managed account?

total_keops · Mar 21, 2009

Quote from CateFul:

just curious
do you need to be licensed to run a managed account?

"Professional advisors that manage client accounts in excess of state registration minimums (generally 16 or more accounts and US $25 million in assets) must be registered under local regulatory law (e.g. Registered Investment Advisors (RIA) for US securities and Commodity Trading Advisors (CTA) for US commodities)."

crgarcia · Mar 21, 2009

Quote from EliteTraderNYC:

I have an individual who is willing to let me trade $1 million of their money (a non-US citizen with an SSN in NYC).

Has anyone here setup a managed account with a profit-sharing agreement and trading authority?

What are the steps necessary? How much does it cost?

I have a Series 7 license, is this enough?

What else? I think setting up a hedge fund is too cost-prohibitive.

Thanks,
EliteTraderNYC

Nobody believes in hedge funds anymore.

Go for managed accounts.

CateFul · Mar 23, 2009

Quote from total_keops:

"Professional advisors that manage client accounts in excess of state registration minimums (generally 16 or more accounts and US $25 million in assets) must be registered under local regulatory law (e.g. Registered Investment Advisors (RIA) for US securities and Commodity Trading Advisors (CTA) for US commodities)."

Thanks!
So if I have less than 16 accounts and <$25mm I don't need to be registered?

heech · Mar 23, 2009

Quote from toc:

does this mean that 10 friends or family accounts are joint into 1 master account like a mutual fund portfolio? and any stocks purchased say 100 of Intel, are allocated to each account as per their proportion of the Master Account?

If that is true then it should help a lot in keeping mind focused on markets.

IB/TWS gives you numerous options for allocation. You can always do custom allocation, or you can program a fixed allocation percentage between different "client" accounts.