Rikki

Covestor and VesTopia: Winners and Losers from Peer to Peer Investing

Hi Ezra,

I honestly don't know.

Figure the amount someone can make is going to be a function (however loose) of their popularity and their performance.

In the offline world a registered investment advisor will charge somewhere between 1.5 - 3.5% of assets annually and a hedge fund will charge 2% of assets and 20% performance fee. You can't exactly replicate that on our platform as regulation will dictate how you can charge based on the location of both parties. However the best way to imagine it is, if I was an offline fund manager with 1,000 clients who each gave me $25,000 to manage, I'd be commanding fees of about $0.5m per year before any performance bonus.

It's probably going to be south of that number in the above example. But the great thing about the internet is you can scale. In the offline world an investment advisor can't easily manage 100s of clients so will generally have a $250,000 minimum.

Regardless - before any money changes hands - the one thing everyone needs first is a real track record.

Have a look at our thinking here and the direction we are moving towards www.covestor.com/how/f.... This is a highly regulated issue so it is of neccessity work-in-progress.

Cheers Rikki


Regulatory disclaimer: please note Covestor is a real-trade sharing service. Neither Covestor nor its members are offering personalised investment advice and Covestor does not offer the opportunity for unregulated participants to advise each other directly. The above example is only a hypothetical example for a registered investment advisor managing client funds.