How do I Get Account to Stop Trading?

If a client wants to stop his managed account from trading for any reason, all he has to do is revoke the Limited Power of Attorney (LPOA) he legally granted to the money manager trading the program.

As explained in "What is a Limited Power of Attorney?," every FX Broker has their own procedure for revoking the LPOA; but at the end of the day, the end result is the same: upon revocation, the portfolio manager no longer has authority to trade the account and the account is removed from the pool that makes up the master account. Once the power of attorney is revoked, the account becomes a regular, non-managed account that the investor controls.

Here are some logical reasons why a client may want his account to stop trading:

  • The client needs the funds in the account and wants to withdraw them.
  • The money manager's performance has deviated significantly from the historical numbers in terms of return, drawdown (risk), or both.
  • The brokerage firm where the account is opened does not offer a sufficient degree of protection over the client's money (read this blog post about account safety).

If the investor is happy with the manager and the performance and risk profile of the program, but just needs access to his funds via a withdrawal for any reason, he could rejoin the program at a later date; in other words, just because the investor withdraws his funds doesn't mean that he is disqualified from investing again or funding his account at some point in the future.