Managed Accounts

When you have free cash you want to save and increase it. If you keep money at home it will not increase. Here is the difference between savings and investments.

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  Banks and Mutual Funds - are not urgent pattern of savings

  As a person amasses savings, appears a question about how to save and increase them. The easiest way – to store up funds at homeand, according to the statistics, it is the favourite way of savings in Russia. Certainly, there is no increase of funds here. Here is the difference between savings and investments.

  It’s absolutely clear that you need some part of money for everyday expenses, but don’t forget about inflation that decreases gradually purchasing capacity of money. Bank deposit is a traditional way to make money work for you. However, lately yields of deposits are below inflation. Thus, purchasing capacity of your money still decreases, though slower. Choice of this or that financial instrument always depends on two factors: yield and risk.

  In spite of the fact that banks offer minimal risks, they don’t even defray expenses. Thus, banks refer to the sphere of savings rather than investments. Mutual funds bear losses now. Moreover mutual funds work with portfolio investments, so they may gain only when stocks rise.

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  Forex Market - high yield, conjugated with high risks

  Forex provides high potential yield but involves many risks especially for traders-beginners. Lack of experience and necessary knowledge, incompetent risk management, excessive emotionality and lack of free time to make the market analysis as a rule result the loss of money.

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  Trust Management- new look at investing

  The most obvious way – is to place your savings in management of the experienced and professional Manager. But there were a lot of dangers for untutored Investor before the Alpari implemented the new Service «PAMM-account» aimed at professional trust management on FOREX:

  • Fraud from the Managers part including the theft of the Investors' funds;
  • Lack of the true information about the Manager's activity and results in the past. Very often the Managers concealed their failures and showed only the positive examples of their funds management to the Investors;
  • Lack of the juridical base to build the relations between the Manager and the Investor;
  • Lack of the demonstrative and public comparison of results of different Managers.
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  Unique model of investing from Alpari - PAMM-account

  Since the «PAMM-account» service was implemented the situation with the trust management on FOREX became entirely different. Now the Investor can:

  • Watch the PAMM-account Rating published on the Alpari web-site;
  • Watch the Monitoring of PAMM-accounts;
  • Put a question in the personal section of a Manager at the company's forum and get the answer, know the other's posters opinion about this Manager;
  • Accept the Manager's Offer and open a Managed Account at Alpari basing on the Agreements and Regulations accepted by the Manager and Investors;
  • Deposit and withdraw funds from the Managed account on accepted terms;
  • Receive Statements, including all the trading operations as well as all the deposit/withdrawal and Manager's Remuneration operations.

Note!

• The Profits earned by the Manager in the past are not the guarantee of the Profits in the future!
• Providing the service to the Managers and Investors the Company Alpari is not a part of the trust management!
• Alpari does not accept and does not manage Funds of the Customers, using the PAMM-account service.

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  Answers to the Frequently Asked Questions about the PAMM-accounts

You should manage the money but not serve it. (Seneca)

To manage, is it really easy? Many of us can earn and spend money, but not many can manage the money. And the knowledge of money management — is the key to success! And if You really know money management why don’t you make money on it? But what to do if You can’t manage the money? There are unambiguous answers to these questions – Management and Investment!

We bring to Your attention an example of these both types of activity!

Management and Investment

The successful trader Smith opens a PAMM-account at Alpari and becomes its Manager. The Manager’s Capital is 20 000 USD (pic. 1). Then he proposes to all willing Clients of Alpari to place their funds in his management. Every quarter (trading interval) the Manager (Smith) proposes to share the profit between the Investors (including the Manager) and pay 20% of profit to the Manager (Smith).

Pic. 1. PAMM-account 20 000 USD.

The Investors Simpson (Investor 1) and Ford (Investor 2) decided to invest their funds to the PAMM-account of Smith (Manager). Simpson and Sidirov invested 50 000 USD and 30 000 USD respectively to the PAMM-account of Smith. Therefore the PAMM-account deposit equals to 100 000 USD (pic. 2).

Pic. 2. PAMM-account balance at the start of the trading interval

During the quarter as a result of the successful work of the Manager (Smith) the PAMM-account profit amounted to 50% (50 000 USD) of the initial deposit of the PAMM-account (100 000 USD), and the total balance of the PAMM-account amounted to 150 000 USD.

Thus the Investor 1 (Simpson) got the profit equal to 50% (25 000 USD) of his own investments (50 000 USD) and paid the Manager’s Remuneration in the amount of 20% (5 000 USD) of his own profit.

The Investor 2 (Ford) got the profit equal to 50% (15 000 USD) of his own investments (30 000 USD) and paid the Manager’s Remuneration in the amount of 20% (3 000 USD) of his own profit (pic. 3).

Pic. 3. PAMM-account balance at the end of the first trading interval

Manager’s (Smith) work on the PAMM-account during the first trading interval resulted the net profit in the amount of 50 000 USD:

• Investor Simpson — 20 000 USD;
• Investor Ford — 12 000 USD;
• Manager Smith — 18 000 USD (10 000 — net profit, 8 000 — Manager’s Remuneration).

At the beginning of the second trading interval the Manager (Smith) resulted with the profit (18 000 USD), the Investor 1 (Simpson) completely reinvested (reinvestment — building-up of the earlier placed investments using the profit realized of these investments) all the funds (70 000 USD), the Investor 2 (Ford) resulted 2 000 USD and reinvested the remaining funds (40 000 USD) (pic. 4).

Pic. 4. Reinvestment and Withdrawal of funds

Another Investor 3 (Jackson) jointed the PAMM-account and invested 10 000 USD (pic. 5).

Pic. 5. The PAMM-account balance at the start of the second trading interval

During the second quarter as a result of the successful work of the Manager (Smith), the PAMM-account profit amounted to 100% (140 000 USD) of the initial deposit of the PAMM-account (140 000 USD) and the total PAMM-account balance amounted to 280 000 USD.

Thus the Investor 1 (Simpson) got the profit equal to 100% (70 000 USD) of his own investments (70 000 USD) and paid the Manager’s Remuneration in the amount of 20% (14 000 USD) of his own profit.
The Investor 2 (Ford) got the profit equal to 100% (40 000 USD) of his own investments (40 000 USD) and paid the Manager’s Remuneration in the amount of 20% (8 000 USD) of his own profit.
The Investor 3 (Jackson) got the profit equal to 100% (10 000 USD) of his own investments (10 000 USD) and paid the Manager’s Remuneration in the amount of 20% (2 000 USD) of his own profit (pic. 6).

Pic. 6. PAMM-account balance at the end of the second trading interval

Manager’s (Smith) work on the PAMM-account during the second trading interval resulted the net profit in the amount of 140 000 USD:

• Investor Simpson — 56 000 USD;
• Investor Ford — 32 000 USD;
• Investor Jackson — 8 000 USD;
• Manager Smith — 44 000 USD (20 000 — net profit, 24 000 — Manager’s Remuneration).

In this example we described the general framework of the PAMM-account work at Alpari. This example is designed to show You the opportunity to get profit from the Management and investment of funds.

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  Frequently asked questions on PAMM-accounts

Partner's program of the PAMM-account.

Partner's program of the PAMM-account promotes mutually profitable partnership of the Partner and Manager. Are you an analyst? Or a risk-manager? Or an advertising specialist? May be you can propose any unique services to the Manager? Now you can cooperate with the PAMM-account Manager and get a part of the Remuneration for your work automatically.

The Partner program of the PAMM-account allows Manager to develop partnership relations with any owner of the alpari.classic account. Above all this program includes flexible and convenient system of the Partner's Remuneration when the Manager and the Partners can check the payment of the Remuneration.

Below you can find the general examples of the Partner's program work

PARTNER OF ACQUISITION

SHARED PARTNER

COOPERATION OF THE MANAGER'S PARTNERS

Let's see the example of the calculation of the Partner of acquisition:

Manager Smith has opened a PAMM-account at Alpari. He makes constant profit trading on the account. But the Manager does not have time to draw investors.

Mr.Smith decides to attract Mr.Johnson in order the latter could draw investors to Mr.Smith’s PAMM-account. Mr.Johnson will get 10 % of the Managers remuneration from his every Investor. It means that Mr.Johnson becomes an Acquisition Partner of the Manager.

Manager's Partner (Mr.Johnson) involved two Investors (Simpson and Ford) to the PAMM-account. According to the Manager's Offer the Investors are entitled to pay Remuneration to the Manager in the amount of 20% of profit.

• At the start of the work the Manager's Capital (Smith) is 20000 USD;
• Investor 1 (Simpson) invested 50000 USD;
• Investor 2 (Ford) invested 30000 USD;
• Thus the PAMM-account balance is 100000 USD.
  

  

  The Manager’s (Mr.Smith’s) performance is good and during a quarter the profit on the PAMM-account makes 50% (50,000 USD) from the initial deposit of the PAMM-account (100,000 USD) and the total balance of the PAMM-account equals 150,000 USD.

  Thus,

  • Investor 1 (Simpson) got the profit equal to 50% (25 000 USD) of his own investments (50 000 USD), and paid the Manager's Remuneration in the amount of 20% (5 000 USD) of the profit;
  • Investor 2 (Ford) got the profit equal to 50% (15 000 USD) of his own investments (30 000 USD) and paid the Manager's Remuneration in the amount of 20% (3 000 USD) of the profit;
  • Manager's Remuneration equals to 8000 USD, therefore the Manager (Smith) pays 10% (800 USD) to the Partner (Johnson) as a Partner's Remunertion.
    

    

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  How to become a partner?

Example of the calculation of the Shared Partner Remuneration:

The Manager Smith opened a PAMM-account at Alpari. Smith works together with the risk-manager Brown. Working on this PAMM-account the Manager shows stable profit. Smith cooperates with Mr. Brown on condition that Brown gets 10% of all types of the Manager's Remuneration. Therefore Brown becomes the Shared Partner of the Manager.

The Investors Simpson (Investor 1) and Ford (Investor 2) decided to invest the funds to the PAMM-account of Smith (Manager). According to the Manager's Offer the Investors are entitled to pay Remuneration to the Manager in the amount of 20% of profit.

• At the start of work the Manager's Capital (Smith) is 20000 USD;
• Investor 1 (Simpson) invested 50000 USD;
• Investor 2 (Ford) - 30000 USD;
• Thus the PAMM-account balance is 100000 USD.

During the quarter as a result of Manager's (Smith) successful work the profit of the PAMM-account was 50% (50 000 USD) of the initial deposit of the PAMM-account (100 000 USD), and the total balance of the PAMM-account became equal to 150 000 USD

Thus,

• Investor 1 (Simpson) got the profit equal to 50% (25 000 USD) of his own investments (50 000 USD), and paid the Manager's Remuneration in the amount of 20% (5 000 USD) of the profit;
• Investor 2 (Ford) got the profit equal to 50% (15 000 USD) of his own investments (30 000 USD), and paid the Manager's Remuneration in the amount of 20% (3 000 USD) of the profit.;
• Manager's Remuneration equals to 8000 USD, therefore the Manager (Smith) pays 10% (800 USD) to the Partner (Brown) as a Partner's Remuneration.

Example of the calculation of the remuneration of the Shared Partner and the Partner of acquisition:

The PAMM-account is opened at Alpari and managed by the group of professionals:

• Smith – PAMM-account Manager;
• Jones – Partner of acquisition;
• Williams – Advertising specialist;
• Davis – Risk-manager.

The Manager fixed the following Remuneration of the Partners:

• Jones (Partner of acquisition) – 10%;
• Williams (Partner of acquisition/Shared Partner) – 10%/20%;
• Davis (shared Partner) – 10%.

The Partner of acquisition Jones involved 2 Investors to the PAMM-account (Investor 1 – Miller, Investor 2 – Wilson). The Partner Williams involved one Investor (Investor 3 – Moore). The Investor Taylor (Investor 4) joint the PAMM-account independently.

At the start of the work the Manager's Capital is 5000 USD. The Investor 1 (Miller) invested 50 000 USD, the Investor 2 (Wilson) - 30000 USD, the Investor 3 (Moore) - 10000 USD, the Investor 4 (Taylor) - 20000 USD. Therefore the PAMM-account balance is 115000 USD at the start of the work.

During the quarter as a result of the Manager's (Smith) successful work the PAMM-account profit makes 50% (57500 USD) of the initials deposit of the PAMM-account (115 000 USD), and the total balance of the PAMM-account equals to 172500 USD.

Thus,

• Thus the Investor 1 (Miller) gotthe profit equal to 50% (25 000 USD) of his own investments (50 000 USD);
• The Investor 2 (Wilson) got the profit equal to 50% (15 000 USD) of his own investments (30 000 USD);
• The Investor 3 (Moore) got the profit equal to 50% (5000 USD) of his own investments (10 000 USD);
• The Investor 4 (Taylor) got the profit equal to 50% (10000 USD) of his own investments (20000 USD).

Manager's Remuneration of the presence of the Manager's Partnersis calculated by the Company in three stages:

1. Payment of the Remuneration for acquisition;
2. Payment of the Shared Remuneration;
3. Payment of the Manager's Remuneration.

• Read Close 1

  Payment of the Manager's Remuneration by the Investor 1.

  Manager's Remuneration from the Investor 1 (Miller) is 5000 USD. The Remuneration for acquisition is paid first. Therefore the Partner of acquisition (Jones) gets 300 USD (10% of 3000). After that the Shared Remuneration is paid. the Shared Partner Williams gets 540 USD (20% of 2700), and the Shared Partner Davis gets 270 USD (10% of 2700). After that the Manager gets the Remunerastion including the paid partner's interest.

  

• Read Close 2

  Payment of the Manager's Remuneration by the Investor 2.

  The Manager's Remuneration from the Investor 2 (Wilson) is 3000 USD. The Remuneration for acquisition is paid first therefore the Partner of acquisition (Jones) gets 300 USD (10% of 3000). After that the Shared Remuneration is paid, thus the Shared Partner Williams gets 540 USD (20% of 2700), and the Shared Partner Davis gets 270 USD (10% of 2700). After that the Manager gets the Remuneration including the paid partner's interest.

  

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  Payment of the Manager's Remuneration by the Investor 3.

  Manager's Remuneration from the Investor 3 (Moore) is 1000 USD. The Remuneration for acquisition is paid first therefore the Partner of acquisition (Williams) gets 100 USD (10% of 1000). After that the Shared Remuneration is paid, thus the Shared Partner Williams gets 180 USD (20% of 900), and the Shared Partner Davis gets 90 USD (10% of 900). After that the Manager gets the Remuneration including the paid Partner's interest.

  

• Read Close 4

  Payment of the Manager's Remuneration by the Investor 4.

  As the Investor 4 (Taylor) joint the PAMM-account independently the Remuneration for acquisition (1 stage) is not available. The Manager's Remuneration from the Investor 4 (Taylor) is 2000 USD. The Shared Remuneration is paid first, thus, the Shared Partner Williams gets 400 USD (20% of 2000), and the Shared Partner Davis gets 200 USD (10% of 2000). After that the Manager gets the Remuneration including the paid Partner's interest.