During this guide to managed forex accounts we are going to delve into the details of managed forex trading and how the various account types work. We also want to know if there are alternative options we should be considering alongside managed forex trading accounts for optimal performance and low minimum deposits?
By the end of this guide, you should be au fait with the structural differences of managed accounts, know how to spot a good account manager, and be able to decide whether this is the right type of trading for you.
If you are already well versed in managed forex accounts, and want to jump straight to the comparison of account types or to the list of trusted providers in your area, feel free to use the links below.
What Are Managed Forex Accounts?
Managed forex accounts are exactly what it says on the label, with a couple of additional extras.
Simply put, managed accounts are trading accounts that are professionally managed by an experienced forex trader. If you use a forex managed account service; you as the client grants the money manager trading discretion, meaning they have authority to make trades within certain parameters set by you at the outset.
The forex account manager, or professional trader will manage your money portfolio and make trades on your behalf using managed forex trading accounts with specific brokers, or trading platforms that support this type of account.
This type of trading could prove particularly useful to you if you are interested in diversifying your trading or investment portfolio, but are not too familiar with forex or trading.
Why do people use a managed forex trading service?
The main reason for seeking a forex account management service as alluded to above could be that you may not have the experience of trading forex online directly, but that is not the only use case.
It could be that you do not have the time to watch and trade the forex markets across the various trading sessions. In cases such as these, managed forex accounts may be quite beneficial for you, assuming you find a good account manager to look after your account that is!
Authoritative traders, and those accustomed to making all of their own decisions, may find that a forex managed accounts will not suit their personality, or trading style.
There are various types of managed forex accounts that allow differing levels of control for both the account holder (you) and account manager. We will delve into these in the section below.
As with any professional service, there is a fee that will be charged for the convenience of having one of the best forex account managers looking after your capital which you will need to weigh against the benefits before deciding if this is going to be right for you.
In summary, there are a few reasons you might want to make use of managed forex accounts:
– You don’t have the time or inclination to trade forex yourself
– You want to diversify your investment portfolio into areas that may not be familiar
– You prefer to have a professional account manager look after your trading account
Managed Forex Accounts UK – which UK brokers are trusted, FCA regulated and have managed Trading Options
All the below options for trusted forex account managers in the UK will have regulation from FCA, CySEC or another recognised European or Tier1 agency. This gives you the security of knowing that the platforms and brokers that you choose for your forex managed accounts are approved for onboarding clients from your territory.
When searching for the best professional forex account managers, there are many things to consider, and the list is long. The specific forex account managers that each broker listed can provide will vary in results as you would expect, but the brokers themselves will provide a trusted and regulated trading platform. When putting together the list of the best managed forex accounts UK, the most important element for us is the security, and trust offered by the platform.
BDSwiss are CySEC regulated and have a good range of forex account managers that you can choose from. It is very transparent to see with BDSwiss which account manager you are going to get and their past performance. Worth exploring further whether you can find the right managed fx trading account manager for your risk profile.
CM Trading is one of the best managed forex account services available, offering a wide range of account types and investment options. They have a team of experienced professionals who are always on hand to offer advice and support, and their fees are very competitive.
The main way to have a hands off approach with CM Trading is to use the CopyKat function. This is effectively more of a copy trading platform than a personally managed forex account, but the end result, and accompanying effort required can be deemed similar.
HFEU (European office of HotForex) are CySEC regulated and have good options for forex managed accounts.
Managed Forex Accounts Australia – trusted brokers with managed account options
Our Managed Forex Accounts Australia list will only include brokers with appropriate ASIC regulation and a strong record of compliance locally.
The forex account managers you will find inside the platforms will have varying track records but the brokers are trusted to deliver the trading platforms for managed forex accounts to operate on.
Avatrade hold ASIC regulation and offer MAM accounts for the professional account manager to use. You also have copy trading functionality should you wish to try with the supported account managers.
What are the fees with Managed Forex Accounts?
A managed forex account will usually incur higher fees and have larger costs than a regular trading account where you are able to make all your own independent trading decisions.
The increased costs that come with managed forex accounts are justified if you have a successful trading account, but you will need to find the right account manager. You would also expect that since you are paying an experienced trader who will more than likely have years and years of forex trading experience to offer, you gain better results than you might by going alone.
In all walks of life, if you have a professional do the work for you, it will cost you more, but you are paying for their expertise. You need to decide whether that is worth it to you, or not, as there are some free alternatives we will highlight towards the end of this guide.
Not all forex managed accounts fees are created equally
The fees payable for a Managed Forex Account differ from broker to broker, and even from one forex account manager to another. It is usual practice for the account manager to charge a performance fee somewhere between 20% and 30% of profits. With the performance fee, there is also a minimum deposit for opening managed forex accounts that are again set by the policies of the individual account manager.
Minimum deposits with managed trading are higher than self directed accounts
Managed forex account minimum deposits are definitely higher than an individual trading account as the account manager or professional trader would need a minimum amount of capital to execute trades. The best forex account managers can also decide to mark up their minimum levels significantly higher than some others with the knowledge that those who are only seeking the best could be prepared to risk a little more to gain access.
Some providers that we have looked at also restrict withdrawals between 12 to 36 months, and may charge early withdrawal fees too. With all these increased costs, you may want to fully evaluate all the options available and ensure that the terms you are entering in to are right for your plan.
How do I choose between the various options for Managed forex Accounts?
Choosing a broker and account manager to be responsible for your forex trading account is like interviewing any prospective employee or service provider.
Ensuring that you check their background, average account performance and past experiences are a given. Also, it is always worth evaluating performance against an average market return and other best performers to ensure they are outperforming the ‘benchmark’ during the same timeline you are looking at.
The next step, which could very well be the most important is to ensure that the broker you are interested in is properly regulated by the appropriate agency. It is imperative to take these safeguarding steps before handing over any money, or control of your financial portfolio.
Managed accounts involve a lot of paperwork and you will have to sign a Limited Power of Attorney agreement (LPOA) which although may be at first surprising, should provide you with a certain peace of mind when you know what is contained within the document. Read it carefully to ensure that the LPOA allows the forex account manager to access your trading account solely for the purposes of trading.
This means that account managers cannot withdraw any money from managed forex accounts and that you will have to conduct these actions yourself. Unless there is a fixed term to your agreement with the account manager, you would be in complete control of your account and able to withdraw yourself as and when you decide.
Managed Forex Accounts Comparison – The different types of accounts explored
There are 3 main types of managed forex accounts that we are going to look at and compare here, PAMM, MAM and LAMM.
If managed forex accounts are proving to be a suitable way for you to move forward with forex trading, it is highly advised to school yourself on the different types available:
- Percentage Allocation Management Module (PAMM)
- Lot Allocation Management Module (LAMM)
- Multi Account Management Module (MAM)
Percentage Allocation Management Module
PAMM is a form of pooled money for forex trading where multiple people pool their money together and allow a professional trader to handle the managed forex account. Often the forex account manager who is trading on the account will pool in their own money into the PAMM account to give them a vested interest to ensure profits are made. These trades are made on the same brokerage software that allows transparency and full control to the investor.
With this, the professional forex trader will receive a percentage of the profits made, and also a percentage of the profits made as per the managed forex trading agreement. All other investors will receive the remaining percentage of the profits after the money manager/trading account manager has taken their fee.
Everyone that has pooled money into the PAMM account can decide at the end of each trading period whether or not to withdraw the funds or reinvest the money.
PAMM accounts are popular with investors as there are many of these existing accounts to choose from on their usual broker trading platform that you can join and leave at your own leisure. There is usually quite a lot of previous data collected regarding the account manager performance and trading behaviour that can help in providing that confidence to commit and make it easier for you to find the best.
Lot Allocation Management Module
LAMM is very similar to the above PAMM account, but instead of the profit being divided out according to percentage, the profits are divided by lots.
This means that the investor can control how much they invest in separate lots and put more emphasis on certain particular lots over others. This works well for the investor because they can allocate risk and prioritise different lots or instruments.
LAMM is not commonly offered by online brokers or trading platforms any longer and is more of a predecessor to PAMM which is easier to understand for the majority of users.
Multi Account Management Module
MAM managed accounts allow the money manager more flexibility in assigning leverage to specific accounts. This is especially useful if the investors that have been pooled together with one trading account manager have different risk profiles.
Clients who have higher risk tolerances usually favour this type of managed forex account as they are able to extract the reward from the range of risk they are happy with.
MAM accounts are also popular with money managers because of the flexibility afforded by the varied client appetite for risk, and the option to assign different leverage to each account based on aforementioned risk profile.
In most cases, the trades themselves conducted by the forex account manager will be the same but with higher leverage applied to clients opting for higher risk, and lower leverage in the case of lower risk account profiles.
Which managed forex trading account type is the best choice?
When comparing each of all the managed forex accounts above, the main goal of each for you as an investor is usually to be hands off and allow someone else (hopefully a professional who knows exactly what they are doing) to take care of the performance. The main differences are really the mechanisms that the actual forex account manager can use in order to reach performance and optimise to each individual investor need.
There is really no best managed forex accounts type for all people, just differences. Whatever your preference in style of managed trading, you need to be careful of checking who are the best performing forex account managers and which broker account will provide you access.
We have put together a list of trusted forex account managers and professionally managed trading accounts for the different areas our users have requested. If you would like to see any additional added, feel free to contact us and we will consider expanding this out if it can help.
Alternatives For Managed Forex Accounts With Low Minimum
If you are searching for forex managed accounts with low minimum deposit, you will find some challenges but it might be worth thinking about things slightly differently. Being open to minor alternatives to managed forex accounts, then there are some other options that can help to satisfy a very similar goal.
The main goal for the majority of users considering managed forex accounts being to have a hands off approach, copy trading, or social trading as it otherwise known, can provide the same benefits but with a few notable differences.
As an immediate upside these managed fore trading accounts have a low minimum deposit that is usually only 10% of what you might expect for the alternative.
Copy Trading VS Managed Forex Accounts
Fees are usually around 20% of profit on a professionally managed forex trading account. Certain copy trading portfolios or individual money managers on their platform can have fees of up to 30% of profits made but this is usually much lower.
Copy Trading with eToro (the industry pioneer) has no charges to copy a trader or portfolio, as eToro make their money on the spreads between buy and sell on all trades. eToro will pay the copied trader a commission of the spreads they earn so that you don’t have to.
There are some other copy trading platforms including OctaFX that allow you to follow an individual strategy manager that can set their own commission as low as 3%, or even offer the service for free for a period whilst you assess the performance.
Overall, if you use one of the better copy trading platforms out there, you can keep your overall fees considerably lower than via the professionally managed trading account service.
Winner – Copy Trading
Expertise of followed manager
This can vary wildly on copy trading or social trading platforms as the managed fx trading account managers do not have to show a level of expertise in many cases.
There is no guarantee that the person you are following has any more understanding about forex trading strategies than you do. We would suggest that if you are to take the copy trading route to managed forex trading, then you do some due diligence.
Evaluate the track record of any forex account manager you intend to consider. This should be investigated in detail, and ideally you should take into account at least the past 18 months and evaluate against standard market performance during the same period.
The expertise of forex account managers operating a professionally managed forex account will likely be much more established and they will usually have a professional level of trading ability.
Winner – Managed Forex Accounts
Account size needed (Minimum Deposit Required)
Most of the top managed forex accounts will require minimum deposit sizes of between £1’000 to £10’000 in order to be eligible for their services.
There are some options of managed forex accounts with low minimum but not so many that you have a wide selection.
When it comes to social trading or copy trading, you can usually start your account with a low minimum deposit of £10 – £200 depending on the particular broker minimum deposit. eToro have recently reduced their own minimum deposit to £50 in UK (and similar amounts when calculated in other Countries elsewhere in the world), and OctaFX have their minimum level set at $25. There are 10’s of thousands of forex account managers to choose from across these two platforms alone, but there are many more besides.
If you are planning to deposit north of £10,000 to get your account started then a managed forex account could well represent the best option. For most novice traders looking to start out, having the flexibility to start your trading account with much lower figures is a considerable advantage.
Winner – Copy Trading
Third party risk
There is always a risk associated with a having a third party responsible for your funds but this risk can be amplified if the interests of all sides are not aligned. What we mean is that in the scenario where the followed person, in this case a forex account manager, is only paid a % of your profits and trades their own funds alongside your own, you can feel confident that this persons’ interests are directly aligned with your own.
In the case of copy trading, where the followed account earns commission based on the volume traded, their interest could be conflicted in moments where they are not certain about a trade but would rather have activity or volume than not trade at all. It could be said that if this were to happen and the followed user were to have poor performance that they will no longer have any followers and thus their income would be lost.
There are copy trading platforms that you can use where the performance of the managed forex account only dictates the revenue of the account manager. With these, your profit is split between yourself and account manager with rates as low as 3% seen but ranging up to 30% in some extreme cases. The percentage will be made clear before you decide to follow that account manager, so the choice is then yours.
Whilst you may not encounter any forex account manager who would ever trade based on a conflict, there is more potential for one to exist in the case of Copy Trading. If you would like to know more about forex risk find some help here.
Winner – Managed Forex Accounts
Some forex managed accounts will require you to commit your funds for a specific time period so that the account manager has time to work their strategy, and is not so impacted by any short-term fluctuations in performance.
These time periods can range from 1 month to 1 year in some cases (but not all).
The flexibility offered by copy trading is significantly greater as you can effectively follow multiple different traders with varying underlying asset interests and pick and choose when to start or stop following in an instant.
If you know you are not going to have any need of your funds for at least that predefined period then the managed account will not provide any issue but from a flexibility standpoint there can only be one winner.
Winner – Copy Trading
The Comparison Between Forex Managed Accounts & Copy Trading Has A narrow winner.
When all is said and done, Copy Trading and managed forex accounts have many similarities, but a few key differences.
If you are someone who is adamant that the professionally managed forex account service is the best fit, then you are right.
Are you someone who is thinking that Copy Trading is now your best option for a low minimum managed forex account? You are also right.
Unfortunately there is no right answer for all of you, but in our humble opinion, Copy Trading has more flexibility and wins out overall. The ability to make that low minimum entry into forex is something we like to see regardless of the way in which people are trading as it just makes things more accessible.
There are some great forex account managers out there plying their trade professionally, many of which may deserve the extra fees they charge but if you can find a high performing account with reduced fees, then it is worth the extra time to check.
Best Copy Trading Platform – eToro Copyportfolios
eToro are the industry pioneer and have both the strongest copy trading platform and the widest range of portfolios to follow. This coupled with the fact that eToro have great usability, the option to trade on desktop or mobile devices with equal ease, and are widely renowned to be the best in the copy trading sector makes this an easy win.
What are managed Forex accounts?
When you opt to have a managed Forex account, your funds are assigned to a professional account manager whose job is to invest your money in the Forex market. In return, they charge an annual management fee, along with a performance fee, which is typically a percentage of your profits.
Who is the best Forex account manager?
There are many Forex account management services worldwide, but not all of them are created equal. The best way to assess the suitability of an account manager is to do thorough research to find an experienced and reputable manager with a solid trading history. Furthermore, many reputable firms require a minimum account balance of $5,000 or more, so be sure to keep this in mind while searching for a Forex account manager. We have flagged up a few account managed services above that have low minimum entries.
Are Forex account managers legit?
Yes, Forex account managers are legitimate. Working with a reputable portfolio manager offers benefits like market analysis and access to professionals that make market decisions. However, you have to research and thoroughly vet your portfolio manager of interest to avoid fraudulent cases. Always remember, not all Forex managers are legit, be cautious of get-rich-quick schemes or unrealistic returns.
What are the benefits of a managed account?
The primary benefits of a managed Forex account are convenience, expertise, and diversification. With a managed account, you don’t have to spend hours each day monitoring the markets, which is beneficial for individuals with a busy schedule. Additionally, account managers draw on their extensive market experience to make informed investment decisions, helping you to generate higher profit margins. Finally, account managers often employ diversification strategies to help protect your investment by dividing the funds across various assets.
How much money do you need for a managed account?
The minimum investment required to open a managed account varies depending on the brokerage firm and the account manager. Typically, the minimum investment can range anywhere from $5,000 to $10,000, and some managers may require even more. It’s essential to assess your financial situation and assess the minimum investment requirements to determine if a managed Forex account suits you, but there are other alternatives that can help give you towards similar goals.
Are managed accounts a good idea?
Managed forex accounts have their pros and cons. If you lack the time to monitor markets and make trading decisions, a Forex account manager would be a perfect fit for you. The account manager oversees the entire investment process, providing you with market insights and trading decisions. However, portfolio managers act on your behalf and you need to outline how comfortable you are with risk, even then however they will not always make the right call, which may lead to losses.
What is the difference between managed accounts and managed funds?
Managed accounts are accounts that are managed by forex account managers. The account belongs to you, and the manager makes trading decisions on your behalf. Each managed account may have different goals, risk appetites, and maximum drawdown levels. In contrast, managed funds are collective investments consisting of multiple investors with similar investment goals. The fund’s shares or units are available to diverse shareholders, and a professional portfolio manager oversees the fund.
Can a forex account manager withdraw my money?
Yes and no. The account manager monitors trades and manages the portfolio but cannot relocate funds between various accounts without prior consent. Fund withdrawal is usually not possible unless you expressly allow it, but the process varies depending on the broker-dealer. Many firms require a minimum holding period before you can withdraw your funds, and such limits may vary based on the manager and the firm.
Are there fake Forex brokers?
Yes, just like any other industry, there are predators in the Forex market who use unethical practices to take advantage of vulnerable investors. Some tools and resources can help you identify these scammers, but they often make themselves appear legitimate. To safeguard your investment, perform due diligence, such as verifying the broker’s regulatory status, location, financial details, trading history, and client reviews, before committing.