Assist In Registration and Creation of Business Entity: Advise as to proper
entity and pros and cons of various start up options. Help with registration
paperwork and follow up.
Help Develop a CTA Business Plan: Set goals, timetables, budgets and
develop realistic revenue and expense forecasts. Set up standards to measure
progress of the business.
Trading System Review and Research Assistance: Review and critique
present trading methodology. Point out strengths and weaknesses. Highlight
strengths for marketing purposes and identify any potential problem areas.
Suggest improvements and areas for further research and assist with research if
required.
Recommend procedures to monitor performance so the CTA will know if the
system is working as it should. Advise on how to recognize when the system has
failed before it is too late. Suggest modifications to solve problems before they
arise. Suggest possible improvements to make the strategy more appealing and
marketable. Suggest proper capitalization of trading accounts to insure adequate
performance with reasonable drawdowns. Review money management and risk
control strategies. Advise on size of accounts to be managed and help with
organization of pools if deemed advisable.
General Industry Education: Which CTAs have been successful and why.
Which
CTAs have failed and why. What is the industry looking for. What niches are
open and which are filled. Where do the opportunities lie. Where is the industry
headed and what are the opportunities that will be presented in the near future.
Set Up the Office: Recommend equipment and software. Advise on
communications hardware and software for phone, fax, modem and e-mail.
Establish procedures for backup of communications, quotes and vital records.
Provide “what if” scenarios and develop emergency procedures for fire, floods,
extended power failures, office burglary and other potential disasters. Advise on
staffing, insurance, benefits and control of expenses.
Write the Disclosure Document: Draft content and format for the document..
Submit final draft to attorney for simple review. Submit document to CFTC and
NFA. Handle any necessary modifications to document after review.
Establish Compliance Procedures: Write an internal Policy and Procedures
manual. Establish files and mandatory record keeping procedures. Draft a “due
diligence” information kit and prepare for typical questions that will be asked by
entities placing money with the CTA.
Establish Brokerage Contacts: Help negotiate brokerage relationships for
efficient order entry, clearing, communication, record keeping, and “give up”
administration. Establish control procedures for “split fills” and fair and impartial
order allocation. Find brokers who may provide free services and money raising
assistance in addition to order execution. Help to negotiate favorable commission
rates.
Set Up Accounting and Record Keeping: Establish format for performance
reporting. Advise on accounting software and services. Prepare for industry
audits by NFA or firms placing money. Could provide performance accounting for
CTAs on a monthly basis.
Marketing: Introduce CTA to trading managers and managers of managers who
are capable of making investments with CTAs. Introduce CTA to outside
marketing agents who can raise money. Help to negotiate favorable terms and
performance incentives with money raisers. Advise on exclusive vs. non-
exclusive marketing agreements and show how to avoid paying fees to money
raisers who are no longer actively raising money for the CTA. Establish
reasonable but adequate marketing budget for conferences and travel. If desired,
attend first marketing conferences with CTA. Make networking introductions and
help to "work the room". Advise on how to set up conference meetings and
prepare CTA on what to say and what not to say at meetings with potential
investors. Help draft marketing materials. Design monthly performance
communications and list of where to send them.. Share files of more than 1200
marketing contacts accumulated over ten years of marketing as a CTA.
On-going Support: Provide continuous input on trends and new business
opportunities. Most CTAs barely have enough time for trading and need
someone else to handle many of these items.
Help with any problems that may come up. Help advise during difficult
drawdown periods. (Most new CTAs are not aware that there are certain
investors who place money only when the CTA is in a drawdown.) Review
system performance and see if drawdown is serious enough to warrant any
changes in the system. Help with modifications if necessary. Work with CTA
when needed to prepare for audits and due diligence visits by large investors.
Help plan for success: Provide guidance in periods of success which can often
cause CTAs more problems than failure. Plan ahead to know when to expand,
how to expand and what to expand. Point out potential success traps to avoid.
Advise CTA on how to grow in an orderly and controlled manner and maximize
the full potential of a successful business.