What do you need to know about trust management in Forex? Broker Aegis Corporate Financial Services explains.

24, Oct - BLOG

Not everyone has the patience, time and experience to trade on the currency market. Although the process is fascinating, it is quite complicated. Patience, diligence, knowledge - all this is necessary for successful investing and opening profitable deals. So that beginners or too busy people could earn without effort, they invented trust management. Details about the service are written in the article, which was written with the participation of experts of broker Aegis Corporate Financial Services.

What's that?

Simply put, it is the transfer of the depositor's funds to a professional trader who acts as a manager. He starts trading on his own behalf, taking into account the interests of the client. Naturally, the service is not free, and the amount of remuneration is agreed upon in advance when signing the contract. This is a mandatory element of cooperation. The procedure is standard. The agreement describes the responsibilities of the parties, commissions, the amount of payment for work.

Types of trust management

The experts at Aegis Corporate Financial Services broker remind you that there are two main types of service in Forex:

• copying trades;
• PAMM accounts.

These are efficient ways of earning for both the investor and the manager. The first involves copying the trade of a certain trader. Each broker has a list of experienced players, in which profitability, duration of work, and other useful information are specified. The process is automatic, so personal presence is not required.
PAMM accounts are considered a classic type of trust management. Here not just copy trading, but transfer funds between cooperating parties. Several investors can invest.

Trust management also differs by asset type. Experts of Aegis Corporate Financial Services broker distinguish:

• securities (stocks, bonds);
• real estate;
• certain types of businesses;
• other financial instruments.

The management period can be short-term, medium-term, long-term. There are also different degrees of client involvement. There are full, partial. In the first case, the trader is given full freedom of action. He himself determines where to invest, so practically nothing is discussed with the client. In the agreed periods, financial statements are provided, and the effectiveness of work can be assessed by the state of the account. In the second case, the client reserves the right to manage some part of the assets, and all the trader's actions are coordinated.

Types of risks

Experts of the broker Aegis Corporate Financial Services remind that losses occur everywhere and no one is immune to them. Even the most experienced players have failures. This is normal for Forex as it is quite volatile, so do not take everything too personally, accusing the manager of all sins. Therefore, you should not invest in only one trader. Here are the most common risks in trust management:

•  the relations between the participants are not regulated in any way. Therefore, the choice of broker should be as informed as possible. You should open an account only with trusted intermediaries. Forex Aegis Corporate Financial Services is exactly such. There are documents, verified instruments, financial statements. The company is regularly audited, does not delay payments, provides free training;
• There is always the possibility of falling into the hands of traders working only for personal enrichment.

There are also brokers who deceive clients and engage in dubious activities. They charge additional commissions, misappropriate other people's money, do not provide payments. Aegis Corporate Financial Services is not a fraudster. The intermediary has transparent conditions, valid licenses, professional managers who regularly improve their skills through various courses and training materials.

What's the big deal about the favor?

• Trust management has the following pros:
• increasing your deposit through new earning opportunities;
•  expansion of the financial portfolio;
• the possibility to predict income in advance (if investing in real estate or securities);
• flexible terms. Money can be withdrawn whenever you want, if such a thing is specified in the contract;
• getting free time, as you do not need to constantly follow the market and look at the monitor;
• expert support of all operations.

Another advantage is that the investor is not involved in detailed market research. All this is done for him by a trained person who receives a fee for providing services. Experts of the broker Aegis Corporate Financial Services highlight the following disadvantages:

• there's a trustee fee;
•  additional commissions;
• you have to pay income tax on the profits.

Plus, there is always the chance of choosing an unprofessional trader or a scammer.

What's worth paying attention to?

According to experts of broker Aegis Corporate Financial Services it is worthwhile to carefully study forums, reviews, before opening an account and transferring money to management. It also does not hurt to look at special registers, to familiarize yourself with additional information, commissions. Nobody needs haste here. It is better to spend time searching than to regret later. Here is what else you should consider when choosing:

• how long the company has been operating in forex. It is ideal to enter into a contract with an intermediary that has been registered for at least five years;
• trader's trading history;
• The strategy that the manager plans to use;
• the amount of drawdown. If it exceeds more than 30%, you should refuse the services;minimum investment amount;
• the length of time the trader with whom you plan to cooperate has been working. Some people, after working for several months, believe that they have already become experts, but in reality this is not the case.

It is also necessary to pay attention to the education of the manager and his real merits. It is important to make sure that the trader works legally. It is also not superfluous to monitor the activity for the last few years. Broker Aegis Corporate Financial Services monitors its employees, trains them, and conducts tests.