The Echo Trade Platform
What is Echo Trade?
Echo Trade is a trading platform that allows investors to search, subscribe, and copy the trades of professional wealth manager strategies.
How does echo trading work?
Echo trading is the action of subscribing to and copying the trades of professional portfolio managers. The concept is simple. You select a strategy to subscribe to in the Echo Trade marketplace based on your personal goals and risk tolerance. Once subscribed, you have insight into the portfolio positions; when the portfolio manager trades, you get notified immediately – and can then choose to reflect that same trade in your own account.
How much do strategies cost on Echo Trade?
Echo Trade and the RIA discuss and determine the value of each strategy offered. Since each strategy is unique, subscription prices vary.
Do I need to have a trading account to use Echo Trade?
You are not required to have a trading account in order to subscribe. However, in order to experience the complete capabilities of Echo Trade, including side-by-side performance analytics and single-click to echo, a trading account should be set up and linked.
What is the minimum and maximum investment amount to use Echo Trade?
Echo Trade does not require a minimum investment amount.
What trading brokerages does Echo Trade work with?
Echo Trade is currently partnered with Tradier, a stock brokerage firm out of North Carolina.
How do I know which strategy to subscribe to?
Each strategy differs by variables such as asset class, risk, and cost, to name a few. It is important that each subscriber thoroughly understands each strategy to determine if it is suitable, based on personal financial goals.
Is the strategy performance based on a real account, or demo account?
All strategy performance is based on live, real accounts (real money).
Can I use my 401(k) to Echo Trade with?
You may be able to use your 401(k) in a self-directed manner – Please contact your broker or Tradier to set up a self-directed rollover IRA account.
How secure is Echo Trade?
We take security very seriously. We protect all your personal data and financial information using Secure Sockets Layer (SSL) and 256-bit encryption.
What is an RIA?
RIA stands for “Registered Investment Advisor”. This individual may be registered with the SEC and FINRA, as well as other regulating entities, for the purposes of managing an individual’s capital.
Why does Echo Trade only partner with registered firms?
Echo Trade’s experience has covered multiple asset classes, including currencies, futures, and equities. Echo Trade’s purpose has always been to uncover the people and firms that, over time, have proven to generate wealth. It is our understanding through experience that registered investment advisory firms, as an industry, tend to perform better over time compared to non-licensed, non-registered traders who may or may not take investing seriously.
Why are RIA minimum capital requirements so high in order to become a client?
RIA firms operate like any other business, and have fixed expenses. The industry typically charges an asset under management (AUM) fee, which on average is 80 basis points to 1%. The average cost of managing an account per year is approximately $600-$1,000. If an RIA would charge an 80 basis points management fee, that would equal $800 per year – this would not be enough revenue to sustain the business. These costs include audits, education, insurance, and staffing, to name a few. This is why seasoned investment management firms require at least $500k-$1M, in order to generate enough revenue to be profitable.
How much money do RIAs typically require to manage?
The typical minimal capital to become a client of an RIA firm varies, but on average is upwards of $500k.
Why do RIA firms want to offer their strategies on Echo Trade?
RIA firms, like most businesses, are looking for opportunities to generate more revenue and grow their brand. Echo Trade provides RIAs a platform to offer micro-services for beginner investors, who otherwise would not be qualified as a client based on financial barriers to entry driven by high operational costs.
How does an RIA get started on Echo Trade?
RIAs begin by opening up an Echo Trade account and choosing a strategy that can be traded based on the concept of working with a lower minimum capital amount than what they would typically trade at an institutional level. Once the RIA has opened and funded a trading account and has completed the Echo Trade account setup, the strategy is ready to trade. Echo Trade monitors trading activity and account performance for the purpose of enabling subscribers to review and copy trades.
How much wealth does the RIA industry manage in the United States?
According to the Investment Adviser Association, $128.4 trillion in assets were managed by 14,806 SEC-registered advisory firms at the end of 2021.
Is Echo Trade a registered broker?
No, Echo Trade is not a registered broker.
If I use Echo Trade to subscribe to a strategy, am I a client of the RIA?
No, when you subscribe to a strategy, you are a client of Echo Trade, and as such, are a self-directed trader. All strategies on the Echo Trade marketplace are offered to us in partnership with each RIA firm that we have approved to be on the Echo Trade platform.
Is the RIA giving me personal financial advice when I subscribe?
The RIA firm is not providing advice. All of the information contained herein and on the Echo Trade platform is for informational purposes, does not constitute investment advice, and should not be relied upon when making any investment decision. Trading is inherently risky and any capital invested may lose value. You should independently evaluate all risks related to any investment and seek advice from an independent and licensed financial adviser before trading. Past performance is not necessarily indicative of future results.