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What is a MAM / PAMM / LAMM?
If you are an MT4 or MT5 broker you may have heard of the terms “MAM” (Multiple Account Manager) or “PAMM” (Percentage Allocation Management Module) before. Such accounts have grown in popularity in recent years to become a key feature offered by brokers and even critical to keep many inexperienced and “hot-headed” retail traders from blowing their accounts. But, what are they and how can your brokerage benefit from using them?
Overview of MAM / PAMM
Offering a trade allocation tool, such as a Multi-Account Manager can help your brokerage attract new clients and see an increase in the volume and size of trades placed on your trading platform.
In particular, a MAM offering can attract Fund / Managers, Money Managers or Professional Traders, who want to trade on behalf of a number of passive investor accounts.
MAM is an overall term used to describe a multiple account management solution that enables a Money Manager (Master Account) to trade on behalf of multiple investor client accounts (Sub Accounts).
The most popular allocation method is based on the percentage of the investor client’s current Equity, automatically allocating one large trade amongst a set of investor subaccounts.
What's the difference between MAM and PAMM?
There are two ways in which a Money Manager can choose to make an allocation to his Investor’s accounts. One is by allocating an actual trade. The other is by allocating a cash amount based on the profit or loss of the Money Manager's trade.
The allocation by trade is commonly referred to as a MAM (Multiple Account Manager) allocation.
The allocation by a cash amount is commonly referred to as a PAMM (Percentage Allocation Management Module) allocation.
There are advantages to both these allocation methods. By offering a Trade Allocation, the Investor Account can log in and monitor the trade they have been allocated. This can provide reassurance and help them evaluate how well their Money Manager is performing.
By offering a Cash Allocation, the Money Manager can allocate the profit or loss on his trade to a larger number of Investor Accounts. It also means, the Investor Accounts do not have to worry about how well the trade performs, they can simply wait for their balance to be updated when the Money Manager’s trade is closed.
What is LAMM?
Another form of allocation is known as LAMM (Lot Allocation Management Module).
Unlike a MAM or PAMM allocation that is based on the percentage of the investor accounts Equity, a LAMM allocation enables the Money Manager to choose how much of the trade is allocated to each investor account.
Some Money Managers prefer this allocation method as they have more control over the trade allocation.
So, which allocation type is right for your brokerage? Well, the good news is that you can offer all of these allocation methods and more using the Gold-i MAM Pro for MT4 and MT5.
Traditionally, separate MAM, PAMM, and LAMM solutions were required to distribute trading profits to multiple investors. These needed to be purchased, set up and managed individually. However, now, Gold-i provides these and more in one easy-to-manage plugin for your brokerage for a fixed monthly fee with no volume-based charges involved.
Although many MAM tools exist, the Gold-i MAM Pro provides an immediate benefit for all levels of brokers end traders and Money Managers. Given the breadth of configuration options available, everyone from large funds to individual traders will benefit from the Gold-i MAM Pro solution.
Please contact us if you have any questions, would like to request a free demo or hear more about Gold-i’s flexible pricing model.