Forex money managers are becoming a sought after commofity, as more people look to the forex market to increase returns on their portfolios. Managed forex accounts are now one of the most popular forms of investment. So why hire a forex money manager to look after your funds? In the first instance, it is the belief that they will make you money. Is this the case for the majority of money managers?
Well, in the vast majority of cases, it is true that a forex money manager can get better returns in trading forex than most ordinary investors. It is a fact that most retail traders have blown their accounts within 3 months. Most then give up, or lose even more money in forex, or try to find a reputable managed forex account to invest their money in. Finding a reliable and high performing foreign currency manager can sometimes be challenging, but it well worth the search.
So what are the advantages of investing in a managed forex account, and how, in practice, can a fund manager help to assist an investor get superior returns? Firstly, you get the ability to access the complex world fx trading with a small amount – just $5,000 gets you in to most managed forex accounts.
Another of the key advantages of using a forex manager and a managed forex account is that you have total control over your investment. What does this mean exactly. When you open your account, you do not open the account directly with the forex money manager, but with the forex broker with whom the manager will be taking the trades. This means that the manager will have no access to your money.
The forex money manager trades your funds via a power of attorney that you have granted him, but at no time does he have any other rights, such as to withdraw funds from your account. When you open up an account, the first thing to remember is that you do so directly with the forex broker. So the first thing you need to make sure is that the forex broker is reputable, and is fully regulated by the appropriate authorities.
A further comfort in terms of safety of funds for investors is that your funds will be held by a properly regulated forex broker. All regulated brokers need to deposit a capital amount with the government regulator, and to comply with strict regulations in order to be able to conduct forex broking business. In addition, most countries will offer some form of deposit protection to the investor, so that in the event of the broker going bankrupt, the investor’s funds will be guaranteed by the government where the broker is based.
In terms of other paperwork that you will need to complete, the fund manager will ask you to sign a limited power of attorney. This is a normal procedure, and enables the broker to give permission to the asset manager to trade your account.
