Legal to trade other people's money?

[gordon2007]

Re: Legal to trade other peoples money?

Honestly people, why all the negative sentiment towards pirate? He asked a simple question and basically got attacked, ridiculed, challenged and sorts of other crap.

Really, there has been talk that this board is getting closed and boring, well you've all got yourselves to blame. Just because someone new asks a question what you may think is stupid is no reason to attack them.

Would of it hurt to just give pirate an informed and decent answer.

 

[oztrades]

Re: Legal to trade other peoples money?

"Ullo Guvner!"
What are you talking about?
Don't you appreciate that people can see the problems that could happen.

Trading, just like life is about taking risks, and the worst risk you want to take is to
a.) alienate family OVER money
b.) have your trading plan determined by unplanned family emergencies.

However if stonedpirate can organise a plan that means that both above conditions can be met then I don't see a problem.

Doesn't a husband and wife both work towards wealth management? Do they have to have a financial licence? No.

The risks are very real though with a & b above stonedpirate. You don't state whether you are going to charge commission which is a more relevant disclosure and may have a bearing on the whole financial relationship.

Simply from a personal view I dont see a problem if you look at the "PROS" BUT anyone with any sense would also look at the "CONS" after and agree on a PLAN.

Cheers

 

[Governor]

Re: Legal to trade other peoples money?

I fully appreciate the risks!

They are to me insignificant if the opportunity to make money arises!

I’m just saying that he has an opportunity to make more money and maybe a career out of it!

The risks are insignificant when up against the possibility to make some serious $$$ and I think everyone should support a person’s ability to make money.

We can’t choose our families but we can choose to be rich!!
So I say go for it, but make sure you act in the law.......can’t make money in jail!!!!

 

[adobee]

Re: Legal to trade other peoples money?

LPOA

Latino Peace offers association ??
http://www.nlpoa.org/

 

[DaveMac]

Re: Legal to trade other peoples money?

Pirate,

I believe your question was about how to incorporate, whether it's legal and the setup for taxation.

1: You could use a Unit Trust owned by a company, with you as Director. Your family could then buy units in the trust. You may need a better-than-average accountant to organise this.

2: There is a provision in corporate law that states if you don't approach more than 20 investors in any 12 month period and your funds are < $2 Mil, you don't need to lodge a Managed Investment Scheme with ASIC. Your investors of course should know the risks of your scheme not being overseen by ASIC, but I'm pretty sure the other forum members have addressed this already.

Hope that helps. I'm not an accountant. Take everything I say with a grain of salt and do your own further due diligence.

Dave

 

[Julia]

Honestly people, why all the negative sentiment towards pirate? He asked a simple question and basically got attacked, ridiculed, challenged and sorts of other crap.

Really, there has been talk that this board is getting closed and boring, well you've all got yourselves to blame. Just because someone new asks a question what you may think is stupid is no reason to attack them.

Would of it hurt to just give pirate an informed and decent answer.

I don't think any ASF members have any interest in 'attacking,' or 'ridiculing'.
The OP asked for opinions and those who responded did so, as far as I can tell, with honest reservations about the risks involved when you mix family relationships and money.

Are you suggesting that the OP will never make a mistake with his financial movements which involve the funds of his family? Hardly likely.

The odds then are that the loving family will pretty smartly start wishing they'd never consigned their hard earned over to the Pirate, given he may well have now lost their fortunes, their houses if they all were to become overconfident and follow the Storm model.

I don't think anyone is doing anything other than warning that it may not be worth the personal kudos and presumably a bit of commission to risk lifelong relationships.

If Pirate is so skilled at making money, he should continue to do so on his own account and when rich as Croesus, share his good fortune with his family. That way, good will is retained all round.

Never underestimate the wrath of a family member who perceives themselves badly done by via another family member.

 

[skc]

The OP asked for opinions

The OP never asked for opinion about managing family money. He asked about the legality of it.

Hello,

I have been quite successful trading on the forex and now members of my family and a few friends want to give me money to trade for them.

I was thinking about incorporating and essentially having them as shareholders in the company. Is it legal to trade this way without some kind of fund managers license?

Also, what kind of setup for taxation do traders use here?

Do you just include your profits/losses to your asseable income? Or are you a trading business?

I don't think any ASF members have any interest in 'attacking,' or 'ridiculing'...

Everyone's definition of "attack" and "ridicule" may be different, but you must agree that these quotes below can easily be perceived as such, even if there was no intention to be so.

Madness.
The depth of stupidity in the average Joe never ceases to amaze me.
But then again You'd have to be mad not to give money to a "Stoned pirate."

where do i sign up?

i have heaps of cash that needs to be grown by someone thats good at that stuff .

pleases tell me how i can join up or at least prosper also.

I fully appreciate the otherwise good intentions from members advising against mixing money and family, I just think the choice of words and tones being used were rude and unconstructive.

 

[nunthewiser]

yes im a bad bad nun.

 

[nulla nulla]

my story is that i have traded the forex consitently for a few years and people that know me want a piece of the action.

Having defined your market there are several posters in this forum who could offer sound advice on trading forex.

The reason i post here is because the forex forums i use are mainly american and need some aussie traders with experience in this kind of thing to give me a few pointers.

I have only ever worked for a living so corporate law and fund management confounds me

Quitting my job at christmas and trading full time next year.

I find this contradictory, you work full time (not trading) but are so successful trading forex that all your friends have heard about it and want a piece of the action?

Just trying to set myself up to pay the least tax possible and not get busted trading other peoples money.

Anywho, looks like i came to the wrong forum
cheers

I suspect the answers you will get in any forum will follow the same lines.

Where do you recommend your family put its money?

They come to me for financial advice because they know i'm a finance guy, they dont have a clue.

Its either manage their money or recommend they put it elsewhere and in this economy, elsewhere is losing money.

Or i could get rid of them by sending them to a financial planner with a diploma in bs only to be stung by some cheesy salesman.

And this is the most contradictory post of all. You have gone from someone "who works for a living and is confused by finance and law" to a "knowledgable finance guy that your family and friends come to for financial advice".

At this point I think you are only trying to wind up members of the forum and are not genuine. But thats only my opinion. Nothing personal.

 

[Trembling Hand]

Points from experienced,

But firstly. Its hard to reconcile a profitable long term trader not having to deal with the questions you ask while taking care of your own business. If you're truly profitable over a decent period you are already filling in monthly/quarterly tax/PAYE/BAS etc already and if your really profitable you are already set up in a company structure and would know most of your questions. But anyway....

Company structures for friend/families with small amounts of $'s are a pain in the Ar$e. No sooner are they set up and shares issued for capital raised that someone wants to take out or put in more money.

Discretionary trust from looking into it maybe a better option. Maybe.

Easiest way would be to use IBs Advisor set up where you open accounts in "clients" names, in this case family/friends, and all money stays in the "clients" name and under their control other than the actual trading which you have control of from 1 log in. Basically how it works is you trade your "Advisor" account and IB split the trades up of into your clients accounts based on predefined allocations.

Word of warning. A trade with OPM is not just another trade especially family $. Tread very very carefully. Even consider putting up $500 for every $10,000 you raise as a stop loss/insurance. Once you are down $1000 you both lose $500 and close out the accounts. Lesson learnt etc etc.

There are no real legal issues of needing a fin lic etc as long as you keep it within a small family/friends circle, 5-10 people for example (from my understanding)

 

[gordon2007]

I fully appreciate the otherwise good intentions from members advising against mixing money and family, I just think the choice of words and tones being used were rude and unconstructive.

My point exactly. It's not just this thread, I've seen it in other topics as well.

 

[awg]

I dont believe anyone has suggested a "syndicate" arrangement

To my knowledge this can be as simple or refined as one wishes to have it arranged, within certain regulation.

Share trading/investing and property syndicates abound, Solicitor should be able to draft an agreement

DYOR on ASF, Google etc.

I share some posters misgivings about the risks involved, unless you have a proven track record of several years at least, and further would insist that any participants do not overcommit.

Do you have an accountant?... you may seek an opinion from him as to whether he thinks what you are proposing is financially sensible
( in other words are you able present a viable business plan, with statements, P&L etc)


Check the Storm Financial thread for what can happen when family are encouraged to get on board a well performing, but highly leveraged investment.

 

[Julia]

The OP never asked for opinion about managing family money. He asked about the legality of it.

So he did. You're quite right. My apologies for the misinterpretation.

 

[medicowallet]

I am with many others on this one.

Do not do it.

For the extra potential gain, it is not worth it imo.

Why risk potentially wrecking your relationship with your family so that they can have a few extra dollars, because believe it or not, you, like every other trader, are no better than the big guys at "picking the market". For that matter, the market probably outperforms a lot of them too.

You have no insurance, no legal protection, and no formal trading (I assume).

Most professionals will never advise their own family, within finance, law or medicine for example.