Strong multi-account manager (MAM) tools are important for your brokerage, as they are an attractive way to onboard money managers into your business and boost your trade volume.
Many traders like managed account programs because they want some or all of their investment to be managed by a professional forex asset manager. Some clients are also attracted to these programs because they can invest funds in multiple programs with different trading strategies in order to minimize their risk.
So, to take advantage of a trader’s interest in managed accounts and realize your full earning potential for the brokerage, you’ll need MAM software. When searching for the right MAM software, consider these 5 features:
1. Client portal integration
Even though forex clients may want a professional broker to control their trades, they still like to see what’s happening with their money.
Your MAM should fully integrate with your trader’s portal, or trader’s room, so that clients can log in to a system to see the trades allocated to them, their floating P&L and equity in real-time. Choosing a MAM with a user-friendly design and interface is key here, as the point of offering this data visibility is for stakeholders to view their managed account activity at their convenience.
Your clients will appreciate this easy access experience, which will contribute to improving client retention.
2. Shared data access
Continuing on the topic of integration, you’ll also need to have back office and CRM software connected to your MAM. This way, it allows for collaboration between the money managers for managed account programs and the IBs who introduced the trader. Trading activity and updates for accounts connected to the MAM should show up in a central hub so all partners can understand what is happening on an account that they are involved with.
When partners collaborate on a managed account program, key insight can be shared so actions can be taken to raise assets under management and generate more volume.
Don’t forget that the MAM tool should be connected to not just any CRM, but a specialized CRM for Forex brokers. That way the system can also automate compensation for the collaborating partners and their accounts, which relieves a significant amount of back office overhead and reduces the error margin that comes with allocating returns or performance fees manually.
3. Intelligent stopout controls
Something important to investors is having control over their risk. Having the ability to set intelligent stop out controls achieves this.
Look for MAM software that has the ability to allow clients to set their own stopout for when their sub-account, attached to a money manager master account, closes positions automatically when it reaches a specified level.
However, although this is a strong draw for the investor, it can also impact the account manager’s trading strategy if the stopouts occur unpredictably. Therefore, account managers need to have the flexibility to set minimum stopout requirements for their managed sub-accounts so both investors and managers can align their propensity for risk and work together smoothly.
Choose MAM software that enables account managers to have the control to create a program that they can make successful, but still provides stakeholders with the power they need to manage their risk.
4. MAM technical implementation
MAM software can be available through a server side plug-in or from an application that connects to the server via API.
There are a few disadvantages to using a plug-in for MAM. A plug-in will consume resources on the trading platform, making it slower. There are several cases where updates to the plug-in, or to the trading platform build, have caused the trading server to crash and thus halted all clients’ trading. This is not a good situation.
Using API based tools have several advantages over plugins.
Firstly, by using a manager API and allocating the trades to managed accounts (which aren’t hosted on the trading platform) it improves allocation capabilities. When using a plugin the minimum allocation on the platform is 0.01 lots. With API tools you can allocate up to six decimal places.
For a plugin based tool, the minimum allocation means that you cannot allocate a 0.01 lot trade to multiple managed accounts correctly. Some people try to work around this limitation by implementing their own hacks, but you should avoid that since it will result in incorrect reporting, which is a regulatory violation.
When the MAM system uses an API and manages the accounts independently from the platform, none of the above limitations apply, and 0.01 lot can be allocated and reported correctly to as many managed accounts as needed.
Additionally, we all know that MT4 groups are limited and using them to manage your managed accounts restricts you from utilizing them for more profitable strategies.
If you use the API version of a MAM tool, only the manager account exists on MT4 or MT5; the sub-accounts do not have corresponding accounts within MetaTrader, which reduces clutter on the platform and improves group flexibility and control.
That’s why when choosing a MAM tool, we advise you to find one that has API capabilities.
5. Fee management
MAM forex tools need to give brokerage firms and account managers sufficient control over the fee structures. There should be options for a management fee and a separate performance fee, allowing brokers to charge according to their involvement in a given program or account.
Check that your chosen MAM tool can allocate management fees based on how long a client has been in the managed account program and prorate the management fee if someone joins after the billing period or leaves the program in the middle of a billing period.
A final thought
We think offering managed account programs can be a big draw for investors and can help you to grow your volumes. If you are looking for MAM software tools for your business, it’s essential to find ones that can deliver the right kind of experience and capabilities that your investors and money managers expect.
Whether you have some questions about one of these topics or are looking for new MAM software, contact us We’re happy to help.
Better Partner Management, More Successful Partners
CurrentDesk works with any third-party MAM tool you’re already using, or has a built-in universal calculations for management fees and configurations like high-water marks.
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