MAM solution (Multi-Account Management) is a derivative of the PAMM system. The main difference is that the allocation of trades between master and investor accounts can be made other way than proportionally. Each investor can select what risk he wants to take and what leverage he wants to have on his account. In other words, trades can be copied with different multipliers, which depend on the investor’s risk appetite. Usually, in MAMs copied trades are also executed as separate transactions and they are always visible on investor trading accounts. Similar to PAMMs investors can neither trade individually on the managed accounts, but they can detach from them at any time. In MAMs, however, master accounts balances are separated from balances of connected investors, which can result in different returns between them. Usually, in MAM master accounts are not publicly visible in leaderboards, they are rather private subscriptions for specific money managers. Summing up MAM accounts are designed for investors who would like to choose their own risk level and get more flexibility in managing their funds.
LAMM stands for Lot Allocation Management Module. This type of account can be considered as the predecessor of PAMM since it does not work based on the percentage of the investor's equity percentage on the manager's account. Instead, by using a LAMM account, the client can determine the number of lots that will be traded so they will get the profits or losses according to this number.
The investment system of LAMM is actually not much different from PAMM. First of all, the investor should connect his/her account to the LAMM manager account. After that, the manager will trade on his account with his own funds. Then, the transactions made by the manager will be copied automatically into the investor's account, so that the investor can get the same profitability as the manager.
Social (Copy) Trading
Social trading is the most public way to manage your trading. There are special platforms such as ZuluTrade, eToro, which provide an option to connect copy trading solution to your brokerage. They provide also their own database of verified signal providers with a bunch of various statistics for all of them. This is quite a big advantage because alternatively to PAMM or MAMs broker doesn’t have to look for trusted money managers on their own. It is also worth mentioning that MT4 and MT5 servers have their own copy trading service embedded in the platforms with quite high numbers of providers available through MQL5 website. In social trading platforms, clients usually follow chosen signal providers with particular volume. They can follow multiple providers on one trading account, which is not possible in MAM or PAMM. At the same time, they can also trade on these accounts or close the positions opened by signal providers without any limitations. Results obtained on investor accounts are usually less correlated with signal providers as the whole money management is done by the investor himself. Providers are responsible only for results obtained on their accounts and provided signals can be used differently by various investors. Some of the platforms allow even to invert the trades of signal providers. On most of the platforms, It is also possible to interact with the providers directly by sending them questions, commenting on their strategies or make online chats with them. In order to use a particular signal provider, you need to purchase a subscription, which is usually a fixed monthly fee.
As you can see there are multiple solutions which can be used by your brokerage to provide managed accounts service. It depends only on the trading platform you use and your clients’ preferences what option will be the most suitable for your business. High competition on the market gives the brokers quite a good opportunity to get the desired solution at a reasonable price. It will for sure help your business to stand out of the crowd.