Need affiliate advise.

First of all, I apologize if this is posted in the wrong section.

I need some advice regarding affiliate compensation. A friend of mine (he has one of the best Managed Account companies out there) has been approached by an affiliate promising to obtain almost 250k in assets. But he is demanding for 2 pips per trade and 30% of the performance fee.

I told him this seems unrealistic but I don't have experince with this. Can anyone that does please give me some educated advise?.

Thanks

MrC

that is rediculous... tell him to take his 2 pips and shove them...

if you are managing money AND getting a 2 pip rebate you should go to jail because you are stealing money...

well , my friend does not take any type of rebates (you know the conflict of interest) but the affiliate asks for them for him. besides that, isnt the 30% of profits too much? it is just a referral?

Seems about in line if he's asking for 30% of your friends cut. If you friend manages a 100K account and makes 50K. 50K times 30% (your friends cut. I've seen 20% to 30%) = 15,000 and the aff wants 30% of that = $4,500 - it seems on the high side but fair.

The 2 pips per trade would be a no-go with me but the rest of the deal seems ok. (I have a couple of agreements like this)

i agree that 30% of performance isnt too bad. the reality is most great traders arent great at raising money. if someone is offfering your friend 250k and will just take a cut of the performance i think he should go for it.

it doesnt mean that down the road he cannot raise his own money and have the whole fee for himself.