Account Management

The Account Management service sets up and manages investor accounts over $100,000. A personal investment manager creates a legal and tax-efficient auto-trading structure, aiming for outstanding returns for our clients regardless of market conditions.

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Account Management Services

Here’s a step-by-step overview of how our account management works:

1. Legal & Tax Structure Consultation and Setup Support

A well-defined legal and tax structure is critical for investment success, providing a solid foundation for compliance, efficiency, and risk management. Proper structuring ensures that investments align with applicable laws and regulations, reducing the risk of legal disputes and penalties. From a tax perspective, strategic planning helps optimize returns by minimizing tax liabilities, leveraging deductions, and taking advantage of incentives or treaties.

Additionally, the right structure can protect assets, ensure clarity in ownership and responsibilities, and enhance the flexibility to adapt to future changes in laws or business needs. We work with legal and tax experts to navigate complexities, safeguard clients’ investments, and achieve long-term financial goals.

2. Investment Account Opening Support

Selecting the right brokerage account is crucial for successful investing, as it directly impacts your financial goals, costs, and overall investment experience.

Cost is an important factor; low fees and commissions can significantly enhance returns over time.

It’s equally important to avoid small or lesser-known brokerage firms, as they may pose risks of manipulation, lack of transparency, or inadequate safeguards for your assets. Established brokerages with a strong regulatory history and robust security measures are more likely to protect your investments and offer a trustworthy environment.

3. Automated Trading Setup

Setting up automated trading for the client’s investment account involves a secure and transparent process where the client retains full control over their capital, which remains in their investment account.

This setup is achieved by linking the client’s account to the auto-trading platform via secure authorization. This authorization allows us to execute trades on the client’s behalf without direct access to the funds, ensuring the safety and availability of capital for the client at all times.

This approach combines the efficiency of algorithmic trading with the transparency and security of maintaining client capital in their own accounts, providing peace of mind and professional investment management.

4. Investment Strategy Selection

Selecting the right investment strategy is essential for achieving financial goals while managing risk effectively and aligns with the client’s objectives, time horizon, and risk tolerance.

A clear investment strategy also helps maintain discipline and avoid emotional decision-making to maximize returns over time. By aligning the client’s strategy with financial goals and personal circumstances, the client sets the foundation for sustainable and successful investing.

5. Allocation and Risk Management

Selecting and managing the right allocation for your investments is vital for managing risk effectively and helps balance potential returns with your risk tolerance, time horizon, and financial objectives.

Over- or under-allocating to certain strategies can expose you to unnecessary risks or limit your growth potential. Regularly reviewing and adjusting the client’s allocation ensures it remains aligned with goals, market conditions, and personal circumstances.

6. Constant monitoring and regular reviewing of the first five steps

Constant Monitoring ensures that the auto trading works smoothly, all trades are well executed. It also helps in communicating promptly to brokerages and responding to market volatility or changes in economic trends, reducing potential losses and maximizing gains. Proactive oversight is a key factor for sustainable growth and wealth preservation.

Regular reviewing of the first five steps is essential to achieving long-term financial success. Legal frameworks, Taxes, Markets, economic conditions, and personal financial goals are dynamic, which means an investment portfolio must adapt to stay aligned with these changes. Regular reviews help identify assess new risks early, and seize new opportunities.

Compensation

We have a “2 and 20” fee structure:

  • Annual Management Fee (2%): A percentage of the total assets under management (AUM), charged annually.
  • Monthly Performance Fee (20%): A percentage of the profits with a high-water mark.

A high-water mark (HWM) is a mechanism used to ensure fairness in how fees are charged. It ensures that an investor only pays performance fees when the fund’s value exceeds its previous highest value after deducting any losses.

How It Works:
  1. Initial Investment: When an investor joins a fund, the initial account value is recorded.
  2. Performance Growth: If the fund’s value increases, the manager earns a performance fee (typically a percentage of the profit).
  3. Decline in Value: If the fund’s value decreases below the HWM, no performance fees are charged until the fund recovers above this level.
  4. Recovery Period: Only when the fund’s value exceeds the previous HWM does the manager earn a performance fee on the gains above the HWM.
Example:
  • Initial Investment: $100,000
  • Fund Value Rises: To $10,000. A performance fee is charged on the $10,000 profit.
  • Fund Value Drops: To $95,000. No fees are charged.
  • Fund Recovers: To $105,000. No fees are charged because it hasn’t surpassed the $110,000 HWM.
  • Fund Surpasses HWM: At $115,000, performance fees are charged only on the $5000 profit above $110,000.
Why It Matters:
  • Investor Protection: Prevents managers from charging fees on recovery gains after losses.
  • Incentive Alignment: Encourages managers to focus on long-term growth, as they benefit only if the fund performs well sustainably.
  • Fairness: Ensures fees are based on true value creation rather than short-term volatility.

The high-water mark is an essential tool for aligning the interests of investors and fund managers, ensuring accountability and fairness in performance-based compensation.

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