Trust management (private trader)

Trust management (private trader)

I decided to write a small FAQ for investors who decided to invest money in trust management to a private trader ie. to me. You can find out more details by contacting me. @Good_trades


Trading is currently carried out only on the US stock market(NYSE, NASDAQ, AMEX) shares and ETF inside the day, without transferring positions to the next day.

Recommended amount: from 30 000$ (minimum 10 000$)

To whom the account is opened: only for the investor. Only you can replenish / withdraw funds

Broker: I recommend Interactive Brokers LLC for accounts over 30000$ (individually from the amount)

Duration: from 6 Months

Withdraw funds: individually(not more often 1 once a month)

Yield: average 3-10% per month (depends on the amount, broker leverage, market conditions, etc.)

Risks: 5-10% maximum total risk for the entire deposit.

Profit distribution: 50% on 50% (individually)

An agreement is signed with an investor.

Contacts : Skype: nysetrade

Telegram: @Good_trades

Trust management

Trust management (DU) - service, provided by management companies or banks in the securities market.

In case of trust management, the client transfers funds or other assets to the management company under an agreement. She carries out transactions on her own behalf, but in the interests of the client, for which he receives remuneration as a part of the earned profit or as a percentage of the value of assets, under management. Trustees in most cases cannot guarantee profitability, which depends on the economic environment.

Trust itself means, that we transfer our assets to the manager at the disposal, but without transferring property rights to him. This implies, that professionals will work with the assets, have the appropriate qualifications and time to carry out transactions with assets in order to generate profit for the client of trust.

Assets, which can be transferred to trust management, can be completely different. These can be real estate objects, cash, securities, as well as various tangible and intangible assets. In general, the process of trust management is regulated by the Chapter 53 GK RF.

Individual trust management

In this case, the investor's funds are managed on a personal level.. An individual trust agreement is concluded with a trust client, which is regulated by the civil code of the Russian Federation. As an annex to the contract, a personal investment declaration, where the main parameters of investments are reflected (a little further we will indicate which ones). The contract and personal investment declaration serve as protection against unauthorized actions of the manager. At the same time, from the point of view of legislative regulation, there are practically no restrictions on the actions of the manager.. And unlike mutual funds, any investment strategy is theoretically feasible here, that is, any assets, starting from the derivatives market, ending with foreign sites. Any strategies are also possible., ranging from classic passive investing to speculative strategies with robots, algorithms, etc.. Conditions for investment amounts, terms and potential risks are already discussed here individually.

Also important, that the manager is not entitled to guarantee at least any profitability, if it is done, then this can be equated with a violation of the law. Here we can only talk about the degree of probability of obtaining the expected return. Since profitability and risks are always proportional, then according to conservative strategies the probability of obtaining the expected profitability is much higher than according to aggressive.

Consulting asset management

Consulting is not a real fiduciary, since in this case the right to dispose of assets or monetary funds does not pass to the manager, and all transactions take place on behalf and on behalf of the client himself. The investor only has the right to heed the advice of a more experienced market participant or not.

In the case of a brokerage advisory office, this is a service, which was created by the brokers themselves and (in our personal opinion and suspicion) often conflicts with the interests of clients, since the frequent change of investment ideas encourages the client to make more transactions and, as a result, pay a large brokerage commission (cm. article "why brokers don't like investors").

Who manages the assets

In this case, a consulting management agreement is concluded with the client., in which it is written, that all transactions are carried out on behalf of and on behalf of the client and all responsibility lies entirely with him.

Who can take money for management

First of all, it should be said about, who is entitled to engage in official trust management in the securities market. Trust management can only be carried out by organizations, who have a specialized license to carry out activities for the management of securities. Such organizations are called management companies.. And directly employees of these management companies must have special certificates of the Federal Financial Markets Service, certifying the employee's right to manage securities and funds. Only in this case, it will be a legally regulated and formalized trust process.

This norm is governed by article 5 “Деятельность по управлению ценными бумагами” ФЗ “О рынке ценных бумаг”.

Types of trust management

Currently, the concept of trust management has largely received a free interpretation.. As it happens, that trust management means various forms of consulting and analytical services.

That's why, let's look at what are the main forms of trust management today and what are the mechanisms of their work. Can be distinguished 3 main forms of trust management:

  1. Collective trust management.

  2. Individual trust management (classic trust management).

  3. Consulting trust management.

How collective trust works

The main feature is that, that investors' funds are pooled into large pools and the manager manages the entire pool, and shareholders own only a fraction of this pool (share) and receive a proportional income. In other words, one might say, that it is a retail form of trust available to small customers.

Author: Trader

Personal blog of a professional trader on the US stock exchange (NYSE, NASDAQ, AMEX ) Dmitry Gavrilov. Started his career at NYSE (New York Stock Exchange) in 2008 years in prop company . With 2009 of the year became a senior trader of the largest prop in Russia and began to train traders of the company. With 2011 of the year was a trader of GT Capital Group with the support of SMB Capital (USA).