We recently had a potential client ask us some very pointed questions.
“You put all this information on your website about the different CTAs out there,” he said. “Why should I work with you? What’s stopping me from just making the investments on my own?”
It’s a fair question, and we’re sure this client is not the only one with it rolling around in their head. As such, we decided it might be a good time to highlight why working with a broker is a good idea if you’re considering managed futures.
- Access– Most people wouldn’t know how to begin finding CTAs to invest with. Brokers give investors access to a plethora of programs. Beyond initial exposure, they can also provide access to emerging CTAs, privately offered CTAs, and CTAs closed to outside investment. Plus, brokers may be able pull strings to make previously out of reach CTAs accessible by doing things like getting you in at lower minimums. Then again, as this potential client mentioned, you could just take the information off of our website and go it on your own. Does that make us dumb for giving you all this great information? Not quite, because we also offer…
- Perspective– Brokers spend all day watching the performance of various CTAs in an attempt to understand the what, why, how, where, and when of what they do, and to determine the direction they’re heading. This means they know what strategy creep looks like, know when a CTA has added too much risk, know when a manager might be going off plan- and can tell you. This process, called due diligence, is an investor’s best friend, and a broker’s job is to make sure it’s ongoing. It’s dedication to you and your investment.
- Free Lunch– Not literally, but figuratively. Working through a broker does not cost you a penny. You’re going to pay the same amount of fees going through a broker as you would going straight to a CTA. That means you’re getting all of the above benefits for free.
So let’s recap. If you go out on your own, you find yourself searching and sifting through programs and their data, and maybe you find a program that fits. If you go through a broker, you have instant access to this data, knowledgeable advisors who can help you allocate your funds wisely, and you don’t make have to pay for it.
Perhaps the real question is, why wouldn’t you work with a broker?