PAMM (Percentage Allocation Management Module)
- Function – Allows investors to delegate their funds to a professional trader.
- Safety – Managers can’t directly access investor funds, ensuring security.
- Security – Transactions occur within a protected environment.
- Automation – Investors can passively invest.
- Accountability – Managers invest their funds too.
- Inherent Risk – No guaranteed returns.
- Complexity – Requires additional software and legal considerations.
- High Commissions – Managers might unjustly hike rates.
MAM (Multi Account Manager)
- Function – Similar to PAMM but offers more control. Funds are kept in separate accounts.
- Flexibility – Investors can edit trades and have more control over strategies.
- Customisation – Allows varied allocations beyond percentages.
- Diversification – Distribute capital across multiple accounts.
- Complexity – Brokers might need an additional investment module.
Comparison – PAMM VS MAM
- Control – PAMM has one manager for all funds, while MAM has individual strategies for each account.
- Flexibility – MAM offers more control to investors and customisation for money managers.
- Risk & Reward – MAM accounts provide more decision-making power to investors.
Choosing between PAMM and MAM depends on a brokerage’s needs. While both have their merits, understanding their features can guide brokers to the best decision for their operations.