A money manager is an individual who manages an investment portfolio on behalf of their clients, either individuals or institutions. Typically, the field of money management is occupied by people with a wide range of skills that span from research and identification of potentially profitable investments, to monitoring actively traded positions and deciding on an ideal time to sell/buy the assets. Also, commonly referred to as a portfolio manager or investment manager, this career path has become an extremely popular area for self-employment, particularly with the popularity of online forex trading.
What Does a Money Manager Do?
A money manager advises and purchases a variety of assets, including stocks and forex, for a range of clients. Most money managers make use of highly sophisticated quantitative and analytic techniques, while some have seen a lot of success allying in-depth market and financial knowledge with their intuition. A money manager will consult with clients to understand their needs, while acting as a liaison between them and financial institutions.
How Do You Become a Money Manager?
A Bachelor's degree in Economics and/or Finance is usually necessary for individuals who would like to become money managers. It usually requires a four-year period of study at a university, which is then followed by a Certified Financial Analyst (CFA) course.
While the CFA certification is necessary as a gateway to employment in large financial advisory firms, there is another way to get into the industry – becoming a Multi-Account Manager (MAM) by opening an account with a trusted forex broker.
What Is a Multi Account Manager (MAM)?
The MAM program has been introduced by most large online forex brokers to allow self-employed portfolio managers to enter into trades and manage the investments of their clients. The money manager is able to easily and effectively execute block trades on the accounts under their management through a single account, without the need to create a complex investment fund.
The profits and losses that result from a MAM account manager are distributed across the managed accounts. All the clients' accounts are linked to the investment manager's main forex trading account, with all the trades made on the account reflected proportionately within clients' managed accounts.
A large and reputable forex broker will provide the self-employed money manager with administrative support and handle all the back-office work, letting them concentrate on finding clients, advisory services, market analysis and management of investment portfolios.
Benefits of Using A MAM Account for Both Managers and Clients
MAM accounts offer a host of benefits to money managers and their clients, greatly simplifying exposure to the market and offering great prospects for profitability.
- Earn Without Investing Their Own Cash: Forex MAM accounts let account managers solicit and engage groups of clients in manageable pools without needing to put in any money of their own. They profit from the successful investments they make with other people's money.
- Fully Customized Trading Environment: Investment managers can fully customize all trading conditions within their MAM including leverage, spreads and commissions and account currencies, among others. This feature lets the money manager maintain a larger margin between the broker's rates and their own markup, increasing the potential profits.
- Automatic Calculation of Fees and Commissions: All money managers have access to a management portal on the online forex broker account from which they can calculate their earnings and deduct fees easily from client accounts.
- Deposits and Withdrawal of Funds While Maintaining Trading Activity: A manager can deposit or withdraw funds from a MAM at any time, without having an effect on trading activity. This is because reputable brokers help them to set up withdrawal restrictions that are activated when there are open positions that could be affected.
Becoming a self-employed money manager can be a very profitable way to take advantage of the many opportunities in the money market. Although it can be tricky acquiring clients at first, with a steady record of success, it is possible to build up a large client base in time through the use of social trading platforms. It is important for prospective money managers to realize that they will not become rich overnight, but thanks to the low initial requirements and very limited risks involved, a dedicated investment manager should eventually start to see profits rolling in.