PAMM Account

A PAMM account allows investors to allocate capital to a professional money manager who trades a single pooled account on their behalf. Each investor's share of the profits or losses is calculated proportionally based on the percentage of the total pool they contributed. For example, if an investor contributes 10% of the pool's capital and the manager generates a 5% return, that investor earns 5% on their individual allocation. The structure gives retail investors access to professional trading strategies without needing to trade themselves.

PAMM accounts create a significant opportunity for introducing broker programs. IBs can refer investors to specific PAMM managers, earning commissions on both the initial investment and ongoing trading activity. Because PAMM investors tend to maintain positions over longer periods than typical retail traders, the lot-based commission or spread-based commission generated can be substantial and recurring. Some brokers offer dedicated PAMM-specific IB commission structures that reflect this higher lifetime value.

A related structure is the MAM (Multi-Account Manager) model. While PAMM distributes profits and losses strictly on a percentage basis, MAM accounts allow the manager to allocate different lot sizes to different investors, providing more flexibility. Both models are popular with Forex brokers looking to attract passive investors, and both create referral opportunities for sub-IBs and master IBs who specialize in investor acquisition rather than direct trader recruitment.