Can I Open My Managed Account with Any Brokerage Firm?

To participate in a managed account, an investor has to have an account with the specific broker where the accounts are managed.

If the broker is Broker A, the client cannot open his account with Broker B and expect the money manager to trade it. One of the main reasons a portfolio manager chooses to operate under a managed account structure is convenience; the convenience of being able to manage just one "master account" with many investor "sub-accounts" in it. For this to take place, the master account has to be established at one brokerage firm only; otherwise, the trader would have to trade multiple accounts in parallel. This would become cumbersome for the money manager and increase his probability of making mistakes when it's time to place, modify, or execute trades.

There are instances when the money manager may agree to work with a second FX broker for a particular client. This usually happens when the client agrees to open a very large account under a broker outside of the main broker for the program. During cases like these, the manager may decide to employ additional software that "copies" the trades from one master account at one broker to an account at another firm. Even though doing this is not as efficient as operating all the accounts under one broker's MAM or PAMM, if the account at the second firm is large enough, it might make financial sense for the manager.

In conclusion, unless an investor is planning to open a very large account, the account must only opened at the approved broker for the managed forex program to work.