Freevestor Forex Portfolio Management Advisory Services Frequently Asked and Anticipated Questions
You have questions, we have answers. This FAQ will help you understand how Freevestor’s Forex Portfolio Management Advisory Services work and how it compares to other services that exist.
Q: What do I need to be able to take advantage of Freevestor Forex Portfolio Management Advisory Services?
Clients will need a brokerage account and MetaTrader 4 (MT4), which is offered for free. A brokerage is responsible for setting up a client with a MetaTrader 4 account and Freevestor guides clients to the Signal Funds available.
To be able to receive Freevestor’s Forex Advisory Services, Freevestor must be the client’s Introducing Broker.
Q: Can you compare Signals, PAMM Accounts, MAM Accounts, ETFs and Hedge Funds?
Signals: These allow traders to copy the trades of other traders. These Signals are typically all-encompassing strategies that remain constant over time when executed by traders using an algorithm. There are traders that place manual trades and allow traders to copy their trades. These Signal Providers typically charge anywhere from $20 to $300 per month for access to their Signal through MetaTrader 4 or MetaTrader 5.
PAMM (Percentage Allocation Management Module) Accounts: These are pooled money accounts where investors allocate funds of a desired proportion to be managed by fund managers/traders/investment firms of their choosing. This pool of money includes the capital contributions of the fund managers and other investors. Fund managers are compensated with a percentage of the weekly/monthly/quarterly profits earned. Investors may withdraw profits or principal at the rollover period.
MAM (Multi Account Manager) Accounts: Fund managers have multiple sub-accounts for the purposes of assigning a different level of leverage, which makes it suitable for investors with a higher risk tolerance and appetite. Fund managers are compensated with a percentage of the weekly/monthly/quarterly profits earned. Investors may withdraw profits or principal at the rollover period.
ETFs (Exchange Traded Funds): Marketable securities that track indices, commodities, currencies, stocks, baskets of stocks, baskets of assets, bonds and derivatives. They are traded like common stocks on a stock exchange and thus have fluctuating values. These funds have expense ratios of 1% or lower unlike mutual funds that can charge double to quadruple the highest ETF rate.
Hedge Funds: The objective of hedge funds is to seek ‘alpha’, which is an abnormal rate of return based on the Capital Asset Pricing Model (CAPM). These funds pool together investments from investors with the expectation of large returns for investors. Hedge Funds typically charge a 2 & 20 fee structure, which means that the fund managers receive a flat 2% on the assets invested and 20% of profits earned. This fee structure is changing as there is greater competition and disruption in the marketplace, there are more hedge funds charging a 1.4% & 17% fee structure. Hedge Funds are not for everyone, they are investment vehicles for the wealthy as they typically require a minimum investment of $500,000.
Q: Can an investor trade with multiple Signals?
Freevestor will assist clients with the creation of sub-accounts, find the proper signals that meet Freevestor’s strict standards, provide guidance on the proper allocation and continue communication in the cases of a need for modification.
Q: How would an investor get a monthly distribution?
Monthly distributions are only issued if investors sign up for a brokerage account through Freevestor with Freevestor serving as the Introducing Broker. There is no other way for Freevestor to insert monthly distribution funds into investors’ accounts. Distributions are generated based on investor trading volume.
Q: Does Freevestor place the trades and create sub-account allocations for clients?
No, this is completely up to the particular client to do. Freevestor clients are free to not take any or all of Freevestor’s advisement. Freevestor creates the portfolio plan and even shows clients how to do put it into place step-by-step, but it is up to the client to execute it.
Clients can choose to have Freevestor have Investor view access, which enables a read-only view into their MetaTrader 4 accounts so that trades are audited in case of issues with the trading signals or any other issues take place when it comes to trade execution. It also helps to have this access for the purposes of being able to confirm that distributions have reached client accounts and to make any modifications to the portfolio plan.
Freevestor’s Forex Portfolio Advisory Services are intended to minimize account blow-ups, manage risk and create long-term client-advisor relationships. Ultimately, Freevestor consults clients. The execution and decision-making are still in the hands of the clients.
Q: Why the change from Signal Funds to Forex Portfolio Management Advisory Services?
Signal Funds were a great concept (would still be) and it would have grown further, but given changes in policies regarding the Signal Funds and platform provider that would ultimately not enable it to work in the desired fashion.
Forex Portfolio Management Advisory Services were a logical next step because of the emphasis given to these practices. It was anticipated that clients would have no idea how to allocate across sub-accounts and this was going to be a free complementary service and it still will.
The goal is to help clients navigate through the waters and not fall into the same traps that most encounter in retail Forex/Commodities/CFDs.