In the last episode, we discussed the problem of not knowing anyone to invest with your CTA. This week we discuss what to do when you know people who want to participate in your trading program, but you think they’re not suitable to invest. We also discuss the customer suitability rules applicable to registered CTAs, and why writing your own more stringent rules about suitability hurts your profitability.
What do CTAs do when they don’t know any prospective customers? The first thing to do is assess if this thought about not knowing anyone is true, and whether it’s useful. Often, the thought is untrue, and never is it useful. Listen to this episode to learn why.
Almost every CTA will at some point be asked to pay to play. “Paying to play” means paying money for the promise of accounts coming your way, now or at some point in the future. This episode discusses the downsides of pay to play, so you can decide
Many gifted CTAs forego significant profits because they simply don’t charge what the market would pay. Listen to today’s episode to find out why this happens and how you can avoid it, so you can earn more money as a commodity trading advisor, and attract more clients into your business.
Some commodity trading advisors don’t manage accounts for their customers. Rather, they sell trading signals. They tell their customers where to buy, sell, take profits and place stops. In this episode, we discuss why this route is often riskier than many CTAs realize, and why it’s generally an impediment to profitability.
CTA’s often struggle to create promotional materials. They’d rather just trade. This episode explains why fancy tear sheets and pitch books are unnecessary. We also discuss common problems that render most CTA promotional materials ineffective, and when to put promotional material to work in your business.
A 2X program happens when a customer wants to double his position size, but he doesn’t want to increase his trading level. Listen to this episode to find out why this kind of customization presents profitability problems for CTAs, and how to give your customer the increased exposure he wants without experiencing these problems.
Many commodity trading advisors would like to forego registration in the early stages of their business. They want to operate as exempt CTAs at first, but they simply don’t know how. Listen to this episode for answers to questions about how to operate an unregistered or exempt CTA.
CTAs often wonder if they should offer a performance hurdle in their incentive fee calculations, but performance hurdles are illogical given the performance expectations placed on CTAs. Listen to this episode to find out why performance hurdles unnecessarily and unfairly undermine CTA profitability, and what to do instead.
If your customers can’t deduct their advisory fees, they’ll pay tax on trading gains that they don’t get to keep. Listen to this episode to learn why customers might not be able to deduct the advisory fees they pay to you, three strategies that can help your customers avoid this situation, and why these strategies may or may not work for your business.