The liquidity and technology provider for crypto and forex markets, B2BROKER, has outlined the advantages of PAMM and MAM accounts for brokers aiming to implement various capital management models.
PAMM accounts enable the pooling of funds from multiple investors under the management of a professional trader. In this system, participants transfer their funds into a collective investment pool, which is then managed by the chosen trader.
The key feature of this model is the automatic distribution of profits and losses among all participants in proportion to their initial contribution. This ensures a transparent and fair management process for all parties involved.
Advantages of B2BROKER’s PAMM accounts include:
- Convenient passive investment — investors are not required to analyze charts, execute trades, or constantly monitor the market;
- Automated profit distribution — the system uses a mechanism to proportionally distribute profits and losses among investors based on their share;
- Effective diversification — the PAMM account manager can implement a diversified trading strategy across various asset classes;
- Transparency — the platform provides access to performance metrics, transaction history, and detailed analytics in real-time.
PAMM also has certain limitations: lack of direct control over trading decisions and reliance on the manager’s expertise.
MAM accounts are designed for professional asset managers. Unlike PAMM, where funds are pooled, MAM keeps each investor’s money in separate accounts.
Features of MAM accounts include:
- High level of customization — traders can individually define and adjust trades and other parameters;
- Risk control — a comprehensive management system allows setting stop-loss levels and adjusting leverage ratios;
- Optimization for institutional management — the platform is specifically designed for professional traders and investors.
“The choice between PAMM and MAM depends on investment goals and preferences for involvement in the capital management process. PAMM accounts are suitable for investors who prefer passive management and ease of use. MAM accounts are aimed at experienced traders who value control, parameter customization, and advanced risk management tools,” commented B2BROKER.
Regardless of the chosen solution, B2BROKER recommends conducting a comprehensive evaluation of account managers, analyzing their historical performance and trading strategies before integrating them into one’s ecosystem.
Investors should carefully study the terms of working with PAMM and MAM accounts, including fee structures and profit calculation mechanisms.
Previously, the B2BROKER team highlighted that by 2025, most brokers will opt for white label solutions. These allow companies to quickly enter the market and significantly reduce costs associated with developing their own platforms and integrating third-party services.