Best Brokers For MAM and PAMM Accounts

The Ultimate Guide to

Choosing a Broker
For MAM and PAMM Accounts

Not sure which broker is right for you?

Don’t worry - we’ve got you covered. In this guide, you’ll learn:

• Why scored high for mam and pamm accounts (Jump to section)
• Who is (and isn’t) suitable for (Jump to section)
• An in-depth feature comparison of the top #3 brokers (Jump to section)
• An overview on mam and pamm accounts (Jump to section)

Ready?

Part 1

What is the Best Trading Platform
for MAM and PAMM Accounts?

scored best in our review of the top brokers for mam and pamm accounts, which takes into account 120+ factors across eight categories. Here's the full list of all the brokers we considered.

The following brokers allow mam and pamm accounts on their platform:

Here are some areas where scored highly in:

offers one way to trade: . If you wanted to trade EURUSD through copy trading or other means, skip to part two.

The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.

have a trust score, which is . This is largely down to them being regulated by , segregating client funds, being established for over years, and much more. For comparison:

Trust Score comparsion

The second thing we look for is the competitiveness of the spreads, and what fees they charge. We've compared these in detail in part three of this guide.

Part 2

Who is (& Isn’t)
Suitable For

As mentioned, allows you to trade in one way: .

To trade with , you'll need a minimum deposit of $. offers a range of different account types for different traders including a .

offer a wide range of instruments to trade including and many other asset classes. In the following section we’ve listed ’s spreads for a range of popular instruments. You can also see a more detailed breakdown of how ’s spreads compare in this review

Finally, isn't available in the following countries: . They do not offer islamic accounts either.

Part 3

A Comparison of vs. vs.

Want to see how stacks up against and ? We've compared their spreads, features, and key information below.

Spread & fee comparsion

Comparison of account & trading features

Part 4

Managed Accounts – PAMM & MAM

Managed accounts are segregated accounts, owned by a trader, but with the trading decision-making function delegated to a fund manager. Managed accounts differ from mutual funds as in a mutual fund, contributions from traders are pooled together in a corpus, which is managed by the fund manager: the trader holds a portion of the portfolio and has no practical ownership of the underlying securities.

Two of the major modes in which managed accounts operate are Profit Allocation Money Management (PAMM) and Multi- Account Manager (MAM).

PAMM and MAM both allow fund managers to manage multiple segregated accounts through a single account, without the need to create a trading fund. Client managed accounts are all connected to the manager’s main account and all trades made by the manager are distributed proportionally among account holders. Similarly, the gains or losses arising out of a fund manager’s performance get proportionally distributed among the segregated account holders.

Profit Allocation Money Management (PAMM)

A PAMM account can be considered as a large main account whose total capital is the sum of individual segregated sub-accounts of customers. The management module feature of a PAMM ensures distribution of trades made on the unified account amongst individual managed accounts based on allocation percentages. For example – a 100 lot trade is made on EUR/USD, and this trade is distributed among sub-accounts based on proportional equity contributions. So in the case where an individual sub-account contributes 1% of the total capital in fund managers PAMM account, the size of the trade for the account holder becomes 1 lot based on the 1% contribution.

Benefits of using PAMM

• Allows traders to take advantage of sophisticated trading strategies without a large capital requirement

• Gives the trader an opportunity to diversify tradings by taking services of multiple trading managers through different PAMMs

• Being fully computerised and automated, the PAMM platform reduces the risk of fraud in the distribution mechanism

Multi- Account Manager (MAM)

MAM accounts provide more complex and sophisticated managed account services by allowing the fund manager to assign higher leverage for particular sub-accounts. MAM also allows the fund manager to regulate and adjust other risk management features across sub-accounts based on the individual trader’s risk profiles, thereby giving them the flexibility to execute complex trading strategies. Although the basis of distribution continues to be a percentage allocation, by using a MAM, the fund manager can take advantage of greater flexibility to allocate trades on the basis of risk allowed by each sub-account. If a particular sub-account holder is considered by the manager to have a higher risk appetite, then they can assign greater leverage for the account, thereby increasing the risk of individual trades. If the higher risks pay off, there could be greater rewards. However, this flexibility could be a double edged sword and could bring exceptional losses if markets go against the fund manager.

Benefits of Using MAM Accounts

• Allows fund managers to execute trading strategies which are more in tune with the varying risk appetites of individual account holders

• Allows better representation of individual trader’s risk appetite in fund manager’s trading strategy

• Gives the trader an opportunity to diversify tradings by taking services of multiple trading managers through different MAMs

• Being fully computerised and automated, the MAM platform reduces the risk of fraud in distribution mechanism

PAMM vs MAM

Risks associated with PAMM and MAM

• Trading in these instruments is risky as a wrong decision of fund managers could lead to large capital erosions

• With the PAMM account system, the managers trading style may not be very transparent. This makes it difficult to make informed choices

• Leads to complete dependence on fund managers skills and does not allow the trader to build their own expertise

• Trades may not be completely liquid and could involve exit loads

Regulated brokers providing PAMM/MAM services

AvaTrade MAM – Key Features:

• • Good liquidity

  • Allows trading subgroups for variety of strategies

  • Client allocations starting from .01 lot

  • Provides for MT4 order types stops, limits, trailing stops, close all, etc.

  • Leverage up to 400:1

  • Prompt monthly payments

Conclusion

Managed accounts have allowed traders to benefit from sophisticated trading strategies provided by professional fund managers for their individual accounts. They also allow traders to harness the benefits of diversification based of varied trading strategies. These instruments provide an alternative to traditional pooled asset trading funds. However, all this sophistication comes with its own set of risks, hence for margin trades like forex, traders must be cautious while using managed accounts.