Trading with third-party funds

[flux]

Hi everyone,

I've been trying and failing to get information on the following topic: I'm currently trading my own money with reasonable success using CFDs.

I'm now at the stage where I would want to take on board some friends and family money. FSA registration and the associated costs are out of the question for time being, unfortunately, so hence the question: does anyone have any experience with this issue, e.g. using a broker's legal status to manage third party accounts for example?

Any suggestions would be greatly appreciated!

Cheers

S

 

[ns1000]

Hi everyone,

I've been trying and failing to get information on the following topic: I'm currently trading my own money with reasonable success using CFDs.

I'm now at the stage where I would want to take on board some friends and family money. FSA registration and the associated costs are out of the question for time being, unfortunately, so hence the question: does anyone have any experience with this issue, e.g. using a broker's legal status to manage third party accounts for example?

Any suggestions would be greatly appreciated!

Cheers

S

Depends how many people this is for. Easiest way is to get your family / friends to open account in their own name and grant you power of attorney to trade on them. No registration should be required if its just for a couple of people. Most firms would let you operate in this way, although you'd need to find one which would split the trades between accounts for you automatically.

 

[Directional]

I beleive interactive brokers offer an account specifically to cater to this arrangement, called a "friends and family" account. Dont know if they offer CFD's however.

 

[flux]

Thanks very much for the initial replies... IB don't do CFDs, unfortunately, so given the need to for significant leverage, that won't be a solution.

Does anyone know of or have experience with a CFD provider who offers this kind of service? Although it would (initially) only be 3 accounts, splitting the orders automatically between the accounts would be crucial... Also, the number of friends and family investors is likely to increase - hopefully to the extent that it will include third parties.

Once again, any help at all will be extremely welcome!

 

[investore]

I currently trade CFD's with GNI. I have 2 accounts. One for my limited company and the other a joint account. I can't split trades between accounts but can trade both accounts on the same platform. On the deal ticket I just choose which account I want the trade to go through on. Im looking to add on a third account onto the platform and have been told there are no problems with doing so.

 

[gamma]

I traded 4 accounts simultaously with CMC on the forex market
but this was 4 years ago don't know if you can sill do this. Don't see any reason why it should not still be available

 

[flux]

I currently trade CFD's with GNI. I have 2 accounts. One for my limited company and the other a joint account. I can't split trades between accounts but can trade both accounts on the same platform. On the deal ticket I just choose which account I want the trade to go through on. Im looking to add on a third account onto the platform and have been told there are no problems with doing so.

Do I understand this correctly in that you have just one outside investor with whom you hold a joint account? Or is your limited company the vehicle in which you let other investors participate?

Incidentally, what would prevent me from just establishing an LLP with other "investors"? Strictly speaking it wouldn't be managing third party funds as they are part of the business, or would it? Any idea what view the FSA takes on this?

 

[tafita]

Do I understand this correctly in that you have just one outside investor with whom you hold a joint account? Or is your limited company the vehicle in which you let other investors participate?

Incidentally, what would prevent me from just establishing an LLP with other "investors"? Strictly speaking it wouldn't be managing third party funds as they are part of the business, or would it? Any idea what view the FSA takes on this?

I have been looking into this myself and every time I call the FSA I get a different answer. They did tell me that if you are managing funds on behalf of friends and family, registration is not required. Third party fund management does require registration however. Their fees for just the application for this type of registration is £5,000 and takes between 6-9 months to obtain. May I ask what your long term goal is because this will affect how you set things up to take your trading to the next level.

Many thanks

Tafita