If there is an ideal service to grow an FX brokerage client base with the potential to increase revenue dramatically, it would be offering MAM accounts using the right software solution.
Running a Forex brokerage is not an easy endeavour. There are many factors to consider for long-term success, from regulatory conditions to having the best platform configuration and managing risk correctly.
Still, the biggest challenge is attracting traders and getting them to deposit, and trade volume and a solid MAM offering can help with that.
All brokers want to build a loyal client base and stand out among a sea of competitors by offering something different. That is why offering a MAM solution should not be overlooked.
The case for managed accounts
As trading requires experience, discipline, and an edge to succeed, only a small percentage of Forex traders are profitable long-term.
As a result, many traders give up in the early stages, understanding they cannot control their emotions and are unlikely to be profitable.
This makes the offer of an experienced money manager trading on behalf of an investor seem like an appealing proposition. Investors feel they are in safe hands, and a money manager is not trading charged with emotion since it is not their money but simply funds in investor accounts.
For these reasons and since limited alternative investment opportunities exist in many jurisdictions worldwide, and managed accounts have become increasingly popular among retail traders looking to diversify their capital and enjoy a potential high yield.
So what exactly is a MAM account?
MAM, or Multi-Account Manager software solutions, allow money managers to trade on behalf of their clients for a performance fee while automating all aspects of the money management and fee collection process.
Trading is done from a master account, and depending on the allocation method chosen, trades at varying sizes will be copied directly to the money managers’ client accounts. The money managers can set allocation methods and percentages.
Performance fees will be collected automatically at the end of each month or quarter, removing the need for clients to transfer them to their money managers manually. This entire process can be automated with the correct solution.
How is MAM software beneficial for brokers?
In addition to increased trading frequency, clients referred by money managers often come with hefty deposits, which translates into higher trade volume. This increased frequency and volume means more trade revenues for the brokerage.
Client base growth
MAM accounts enable brokers to appeal to a broad audience that otherwise would not be possible. It effectively attracts valuable Money Managers into your business who actively work for you growing your client base and passing trade volume. It can be part of one of the most cost-effective client acquisition methods, with money managers finding clients themselves
Acquire high net worth investors and large deposits
Clients referred by money managers generally are financially capable individuals that approach a managed account with more significant deposits and a longer time horizon. In many cases, money managers hold a portfolio of high-net-worth individuals that can rapidly be onboarded with sizable deposits
Increased trade flow
Having MAM or managed accounts at a brokerage will arouse the interest of potential investors and money managers looking for a platform to offer. A single money manager can bring significant trading volume and profitable trade flow without a broker needing to provide research and
Diversify broker offering
Diversifying your offering is becoming increasingly challenging due to the saturation of the FX market. Offering MAM accounts provides something unique and different to a broker’s product line that they can shout about.
In addition, specific MAM solutions also offer built-in copy trading and signals solutions, which, applied in the right way, can change the image of a broker, ultimately providing a critical deciding factor.
How the YOONIT MAM solution helps brokers?
PLUGIT’s flagship YOONIT portal offers a mature MAM solution controlled via a web interface while plugging directly into MT4 and MT5 servers.
It offers all mainstream allocation methods that money managers can control and brokers can administer. Options exist for B-book trades while also A-booking using all popular bridges. The copy-trading and signals solution add-ons add interesting ways a broker can pump up its offering.
Want to learn more about how a YOONIT MAM deployment can impact your firm’s bottom line and change your business offering? Contact us to find out more.