What is a Binary Options Account Manager?
Personal binary options account managers are used by the brokers as a way to attract and retain binary options traders. The benefit of a personal rep, someone who is there to take care of your account needs, answer your questions and help you get started is unquestionable. What is questionable is the lengths to which some account managers and brokers will go to get you to deposit more, and lose more.
I think it’s understood that they are there to sell you binary options and that’s OK. They can tell us all about trading and why this broker is the best but should they really be offering us tips, advice and signals. The manager works for the broker, the broker makes money when you lose so there is a clear conflict of interest in a manager helping you to win. The casinos don’t let the dealers help the players do they? You can’t ask him if you should hit, or split or double down can you? Then why is it OK for your manager to tell you what to trade?
To truly understand why and when a binary options account manager is a good or bad thing you have to understand what an account manager is there for. The manager is there to help you and monitor your account, not to trade for you. The manger should be there as a liaison between you and your platform. He or she should help you get signed up, they should help you with your documentation and identification, they should explain the bonus terms and conditions, make sure that you understand what the types of binary options are and how they work. They are not there to pressure you into making deposits, they should not be offering to trade your account, they should not be offering trading tips or suggesting you use a managed trading account. If they are there is something very wrong and you should rethink whether or not you have chosen a good broker.
What is a Binary Options Managed Account?
Often when you open an account with a binary options website, they will assign to you with a representative (=account manager) who will provide you with support, trade your account or offer you trade signals. I believe that letting such a “manager” trade your money is the biggest risk of all because these guys, no matter how much they try to sound like experienced traders, are (in most cases) actually sales men and women. They will give you trading tips and they will teach you how to invest… sort of… but you cannot teach something if you are not good at it, and usually these account managers are not good at trading but they will do everything in their power to sound like true veterans. Another part of the account manager’s job is to offer clients a product that’s supposed to “help” newbies. This product is the Binary Options Managed Account The broker or a dedicated robot will trade your account for you. Brokers advertise 10%-50% returns from daily to monthly, saying that all you need to do is invest and let them do the hard part of trading. It might sound good, but it isn’t because in reality you won’t get that kind of return. Sure, maybe they will give you some in the first weeks or months but in the long run a binary options account is not the way to go. Our opinion on the binary options managed account is: NO WAY! You should not let your broker or the house’s robot to trade for you! Brokers use this as sales tactics to get you invested.
As a side note I should mention there are two types of account managers: the one mentioned above is the first type and the second is a third party agent (not involved with the brokerage). We don’t really see the latter, but who knows what the future will bring. Maybe these 3rd party managers will be the ones to change the face of account managing. Although to be honest, I don’t see this coming. But what I do see coming – and this is already happening – is 3rd party binary options managed accounts. Here’s how it works: a 3rd party (company, signal service provider, etc.) claim they have a close-to-perfect trading robot or a team of experts, pro traders and whatnot. Then they try to convince you to allow their robot to trade your account. That software (or the so called team of experts) will be in control of your account, hence the term “binary options managed account”. Unless you have solid – let me say that again: solid proof of their performance, I would say stay away, especially if they are reluctant to give you clear information about how their robot works or how exactly will their team manage your binary options account.
It is a known fact that brokerages don’t like winning traders because those winnings come out of their pockets, so why would you believe that an account manager given to you by the brokerage will make his employer lose money? Or why would you believe that the brokerage will offer you a binary options managed account that actually makes you money and makes them lose money? Maybe there are brokerages and account managers who really want you to succeed… they can’t all be bad, but make sure you choose wisely. Do you know how experienced they really are? Do you know how careful they will be with your account? People have a tendency to care less when the thing they are handling or “managing” is not theirs so let me get back to my car story which I’ve started earlier:
What are types of Binary option managed accounts?
Often the brokerage is the Casino and the account manager is the dealer, so here’s another metaphor I like to use: let’s assume I’m in a casino, and I’m playing my hands against the house. The dealer represents the house, and he’s acting after you. Now you don’t know how to play jack, so the dealer offers you a deal: I’ll play your hands instead of you, and I guarantee you’ll make 20% of your investments. Well you’re happy, and you’re agreeing without asking questions. The game starts. You get a 9 and a King, you couldn’t be happier. Now the dealer plays your cards, but he decides it’s not enough, and is looking for 21. Oh man, the look on your face when the 5 came out. The house takes it all. Letting the broker to manage your account is a bad idea, and something you should be avoiding. The shadier the broker is, the more money you’ll probably lose with the managed account. Regulated AND Trusted brokers would not offer you managed account, and your account manager will not provide you tips. It’s all about you, and you’ve got the advantage over the house, so take it with both hands, learn to trade and keep in mind a few of the risks of managed binary options accounts:
Even experienced traders lose. That statement is as true as “The sun comes up every morning”. To always win in binary options, Forex, stocks, etc., you’ll have to know the future and if you know the future, you don’t need to manage binary options accounts. Something can go wrong with his strategy or market conditions can change drastically and the account can go south. Maybe he will recover the losses but maybe he won’t or maybe you will decide to stop before he can win your money back.
So far we assumed the guy in charge of your binary options managed account is well intentioned… but what if he wasn’t? I am sure you know how many scammers roam the Internet and the binary options industry. Every day I get junk emails from “millionaires” who want to share their secrets with me for a few bucks or even for free, if I join their “recommended” broker. I’m not saying that all account managers are scammers or that all managed accounts will lose money, but many of them boast their skills and present themselves as true market wizards when in fact they know less about trading than a guy who just finished our Trading Primary School.
Account Managers Are A Good Thing, Right?
Account managers can be a good thing for both the broker and the trader, don’t get me wrong. The broker needs them to help retain clients and get them to trade. The clients need them to answer questions, give help and provide support. In the end the result is the same for both, making sure clients are comfortable with trading, trading real money and using their broker. The manager should show you the ropes, and to give new traders a little push if they need it, but the line is crossed when they start to give out tips.
Before taking any tips, regardless of the source, you have to ask yourself, is this person qualified? It takes a certified investment adviser to provide trading or investment advice, not at all the same as being regulated as a broker. Without such certification it is illegal for brokers and account managers to give advice, provide tips or signals and especially to trade your account.
Why Are Account Managers So Annoying?
The problem is that there are no set standards among binary options brokers. The very term is confusing. A manager, by definition, should be able to “manage” your account or have some active role in your trading decisions. A change in status to account representative or liaison would be better. Along with that, regulation should include no tips or advice, the manager should be there for informational purposes only. You can ask them questions, use them for a reference and for educational purposes. They should be able to help you with account verification, making deposits and withdrawals but not to give you tips. If they want to tell you how to trade they should get licensed to be an adviser and look for a new job.
Account managers are a good thing but it depends on the broker and the manager you get. To be honest, I don’t know how far I would trust any trading website if there wasn’t someone I could talk to but like everything else in life, don’t believe everything they say just because they appear to be in a position of authority. The internet is full of scams, not just in binary options, so blindly trusting what some web page or so-called account manager says is not recommended in any situation.
The Bottom Line
No one cares more about your money than you and although trading is risky in all of its forms, I’d rather risk my money than letting others do it. We urge you to NOT let your “account manager” trade your account and to NOT invest in a binary options managed account. This is not the solution and, as Michael mentioned in his article Having an Account Manager is a Good Thing. Right? “a good broker will use the manager to help you trade by giving you tools and information or providing some support but they will not give you tips, advice or trade your account for you”. Learn to drive, accept guidance from others but NEVER let them touch the steering wheel and never let them manage your binary options account.
The way your account manager treats you is a great way to know if the broker is legit or not. A bad broker will use the manager to take advantage of you, get you to trade more, lose your money on the tips he gives you and then ask for more deposits. A good broker will use the manager to help you trade by giving you tools and information and providing some support but they will not give you tips, advice or trade your account for you. Education or accepting a little nudge in the right direction is one thing, accepting an account managers tips or letting them trade your account is a whole different ball game. The bottom line, you should be able to trust your manager for help without fear of pushy sales gimmicks or suggestions of larger deposits. If you can’t then I suggest you find a new broker.