Would you fund a trader with a proven record?

[todasec]

Then almost certainly you are breaking the law buy soliciting retail funds without a AFS Lic.

It is not a retail fund, no money are pooled together. I will do more research but I have checked with an accountant who specialises in investments who says I do not need to be registered at this size while all money remain under clients.

 

[Trembling Hand]

It is not a retail fund, no money are pooled together. I will do more research but I have checked with an accountant who specialises in investments who says I do not need to be registered at this size while all money remain under clients.

Mate! You are advertising in a public forum offering a financial services in margined derivatives to retail clients. If your account said thats fine for an unlicensed person then you REALLY need a new accountant.

 

[Gringotts Bank]

It is not a retail fund, no money are pooled together. I will do more research but I have checked with an accountant who specialises in investments who says I do not need to be registered at this size while all money remain under clients.

Why not hook up with Canoz, the OP. Most people in here would trust him. That could be your entree. No one here knows you, so they have no way of judging your character.

 

[todasec]

Trembling Hand: My accountant is not from a one man shop, it is a medium sized firm. PM me if you want his name and which company he is from, happy for you to chat with him but he might charge you consultation fee I don't know. I have email records so if I really am breaking the law he is responsible for providing ill advice. Nevertheless, I thank you for the warning please contact the admin if this is breaking the law and he will remove me from here.

Gringotts Bank: Happy to have contact with him if he is willing, maybe he can monitor my performance for a few months and report to everyone here. Thank you for the tip.

 

[tech/a]

Then almost certainly you are breaking the law buy soliciting retail funds without a AFS Lic.

ASIC are unfortunately pretty bad at weeding these sort of characters out.
Makes it difficult for the guys that have all the right licencing.
It also casts a bad rep on those who are licenced as those who arent
fail---take the money and run--with no consequence.
Someone who is legit gets the run off from the bad rep these
guys leave behind after failure.

Unfortunately you cant protect people from the lure of wealth.

But I love this!!

Performance Fee: 30% New High Watermark(The highest net asset value that an account has reached and for which a performance fee was paid.) Paid Quarterly.

So whos looking after who??
30% is only twice the industry average.
But the bold just has me on the floor!

 

[skc]

It is not a retail fund, no money are pooled together. I will do more research but I have checked with an accountant who specialises in investments who says I do not need to be registered at this size while all money remain under clients.

As far as I know, you can do this kind of arrangement as essentially private agreements between you and "your friends". ASIC has a limit on the amount and number of people etc on this sort of arrangement.

But advertising on a public forum is a completely different matter. Your intended audience are clearly not your friends so it is hard to argue that you are selling a financial service without the proper licence.

Your accountant may have said the structure of the IB account is legal. But did he also say advertising for potential client on a forum to be legal as well? Even if he did I'd check properly. And just because said it's OK doesn't mean you haven't broken the law.

I like your commission structure in relation to the high watermark. I also like the 10% drawdown-and-pause idea. It's clear that you've given this some thought. With respect to advisor fee not being tax deductible... are you sure? Say you make 40% return on my $100k account, I pay you $12k in commission but I also need to pay $19.4k in tax (on highest tax bracket), leaving me with a mere 8.6% return after tax... or ~18% before tax. This is a lot less than the headline figure... if you intend to pay tax on your advisor fee income I see no reason why it isn't tax deductible to the investor.

 

[notting]

As far as I know, you can do this kind of arrangement as essentially private agreements between you and "your friends".

Looks like the Facebook friend is about to take on a whole new meaning!
"Look, he is one of my friends." It's official!

 

[Trembling Hand]

With respect to advisor fee not being tax deductible... are you sure?

Yeah he is wrong about that as well. I have the exact same deal with "friends" with a written contract etc etc cept I charge much higher % split . I was Audited a few years ago by the ATO and all above board, Advisor fees are an expense to the "client" and income to the Advisor.

 

[tech/a]

SKC

What is it you like about the commission structure?
Have you really thought about it?

Find out what his maximum and average
Peak to valley drawdown is / mth

 

[Trembling Hand]

What is it you like about the commission structure?
Have you really thought about it?

I like it too.
Its like a hedge fund structure for the poor man.

 

[tech/a]

If I was running it I'd like it as well.

Say I'm up 15% in a month but finish down
10 % my client loses 30% fee off his highest
Profit in the month and finishes with a loss.

To make money he only has to trade in profit at
" sometime " in the month.

You could overall lose on your account and pay a heap
In fees with a nett loss.

Love it!

 

[Trembling Hand]

If I was running it I'd like it as well.

Say I'm up 15% in a month but finish down
10 % my client loses 30% fee off his highest
Profit in the month and finishes with a loss.

To make money he only has to trade in profit at
" sometime " in the month.

You could overall lose on your account and pay a heap
In fees with a nett loss.

Love it!

Nah thats not how he is saying it works.

 

[todasec]

tech/a: you would rather be charged 1% of NAV per annum regardless of performance win or loss rather than pay 30% of profits only ? Drawdown periods are shown in the graph provided.

skc: you will have to check with someone who's done this before like Trembling Hand on tax of advisor fees. I have never been an investor in one before and my current investors have only been 5 months so far have not been tax time yet. I'm assuming if IB's statements has the fees listed on them you can claim tax off it, I will not be issuing anything of any kind officially to you personally.

I have only been compounding for 21 weeks and currently on target to achieving 50%+ which would mean 35% after fee, before tax. Obviously the risk is if my performance drops, you will be stuck with something closer to 18% before tax. I will be dissapointed but hopefully at least you have a good chance of beating the index fund.

 

[Trembling Hand]

Todasec how many times have you developed profitable short term strategies? From my experiences just as you start to leverage them up, like you are doing, the market niche disappears and you give back a years work in two months.

 

[todasec]

If I was running it I'd like it as well.

Say I'm up 15% in a month but finish down
10 % my client loses 30% fee off his highest
Profit in the month and finishes with a loss.

To make money he only has to trade in profit at
" sometime " in the month.

You could overall lose on your account and pay a heap
In fees with a nett loss.

Love it!

Don't know where you got that from, but that's not what happens. Maybe I didn't word it correctly. Google high watermark on hedge funds.

 

[tech/a]

Nah thats not how he is saying it works.

Sorry it's quarterly
So you could be up in any or all quarters to finish down
In any or all quarters.

Same but quarterly!

 

[todasec]

Todasec how many times have you developed profitable short term strategies? From my experiences just as you start to leverage them up, like you are doing, the market niche disappears and you give back a years work in two months.

Only 2 times on short term strategies. Just this strategy and a premium writing one which only works well when VIX is 25+. This strategy has been traded live from August 2008 although I've tweaked it to have more bullish bias since the end of 2010. Always could change back the rules when we get a bear market. I am still using the same position sizing % ever since I started and there has been no liquidity problems when leveraging up the capital. Everything fills instantly (including clients accounts) when I buy at the ask. With SPY's volume I do not think I will have to worry about leverage of capital there is also SPX as well.

I don't know so yes it could stop working but I will hit the 10% stop before I give back a few month's profit. My net long options at anytime is less than 10% of total capital so it is theoratically impossible to go above 10% loss unless I go kamikaze and don't follow the rules(which is still a possibility). Which is why I sometimes tell clients if you ever see I have taken onmore than 10% risk in your account, immediately disconnect your account and fire me.

 

[Trembling Hand]

Sorry it's quarterly
So you could be up in any or all quarters to finish down
In any or all quarters.

Same but quarterly!

If the account is up from initial amount you get commission. Once commission is paid thats the "high water mark" for any further profit calculation. No further profit is paid untill an equity high is surpassed - the "high water mark" .

 

[tech/a]

If the account is up from initial amount you get commission. Once commission is paid thats the "high water mark" for any further profit calculation. No further profit is paid untill an equity high is surpassed - the "high water mark" .

Yeh if it ranges it can happen.
If it trends then un likely

 

[skyQuake]

Todasec how many times have you developed profitable short term strategies? From my experiences just as you start to leverage them up, like you are doing, the market niche disappears and you give back a years work in two months.

^this sooo much