Firm Name: Attain Capital Management
About the Firm: How did you get started? Do you provide additional services besides brokerage?
After experience on the trading floors and with various other futures brokers, partners Walter Gallwas and Jeff Malec decided to set off on their own with the founding of Attain in 2002, focusing initially on opening trading system accounts executed by a team of brokers running TradeStation.
From the beginning, we had a strong tie to technology, wishing to show the actual results of 3rd party trading systems which were often touted as having triple digit returns with no risk, or other such unrealistic performance. Our goal was to give clients considering investing in a trading system the true story, by showing the actual fills of investors utilizing said trading systems; and provide a simple and intuitive website interface to allow for the browsing of trading systems.
It wasn’t long before that business grew and the larger investors started asking about various managed futures programs. We started doing due diligence on those managers, and before long became a full scale managed futures shop with a website listing hundreds of managed futures programs and the ability to combine managers in a portfolio, track favorites, and more.
Attain’s main business these days is earning the brokerage and a share of the fees collected by the managed futures managers we recommend our clients to. Attain’s second business line is a portfolio management company, Attain Portfolio Advisors, which creates, markets, and offers investments in privately offered funds sub-advised by third party trading advisors. This company is registered as a Commodity Trading Advisor and Commodity Pool Operator.
Finally, Attain is partnered with Spanish technology company Trading Motion to offer that company’s mobile trading platform, www.iBroker.com, and trading system platform, www.iSystems.com to US clients.
What are the biggest challenges your clients face today, and how do you help them?
The biggest challenges today in our space, the managed futures space, is sub par performance. Managed futures have been struggling since 2009, following a great 2007 and 2008, and clients only have so much patience – especially in light of 30%+ years in the stock market.
We help our clients by analyzing their current holdings and trying to identify other strategies which may be performing in the current low volatility environment. Agriculture and Short Term traders have been able to buck the down trend the past few years. Beyond that, we help them stay confident in their investments by providing a lot of information reminding them of why they are in the space to begin with.
The jury’s still out on whether we can call this success, and we wouldn’t pretend to have all the answers. But the keys we’ve seen are the cliché ones: work hard, be honest, and give clients the tools and research they need to make informed decisions. As an old mentor used to say: “never do anything you wouldn’t want to read about in the paper the next day”.
The biggest tangible thing I think we do different is focus on education first, and actually dig into the managers our clients invest in. There are over 2,000 managed futures ‘funds’ in the world, so it’s not an easy job.
You hit the nail on the head asking about the ‘burden’, it’s a big one. We approach compliance in three ways: with team work, technology, and outside help. The teamwork aspect spreads the compliance burden across the whole firm, with each member of our team aware of the regulations applying to their area and on the lookout for any issues or problems that may arise. Next, we implemented some homegrown technology solutions (some as simple as calendar reminders) to follow procedures for reviews and record keeping. And finally – we don’t miss a newsletter, conference, or NFA bulletin on new regulations – and are in frequent contact with compliance consultants, our attornies, and the NFA themselves whenever a question comes up.
The trend we’re most excited about is the major advances in technology which have led to the iSystems automated trading system platform (www.isystems.com) and the iBroker mobile trading app (www.ibroker.com). Talking iBroker first, consider that in 2008, just 5 million people used mobile banking, and today over 60 million do. There’s maybe ten thousand or so traders using mobile trading today, what’s that number going to look like in 3 or 4 years time… what percentage of the billions of contracts traded per year will be done via a mobile device.
And as exciting as the iBroker technology is, the iSystems platform is in many ways even cooler. Gone are the days of having to tell someone how many contracts to trade on a system by 8 AM, the days of client performance not matching up with what’s on the website, and the days of any yahoo being able to put their system on up the platform.
The iSystems platform is fully automated and gives the client full control to start and stop systems whenever and wherever they want. The simply login, activate a system, set the number of contracts to trade, and the platform takes care of the rest. Nervous before an FOMC announcement, the client can deactivate a system at any time, and get out immediately, on the next signal, or just don’t be active the next day. No need to call the broker or load software or anything else. It’s very simple and intuitive.
The trend we’re most worried about is a move towards large scale firms at the expense of the little guys. The move to liquid alts, where investors can get exposure in Coffee, Orange Juice, Copper and more through ETFs favors the Blackrocks of the world, not your run of the mill futures broker. Likewise, there are dozens of managed futures mutual funds now – where investors can click and buy in a minute instead of having to fill out the pages upon pages of futures account paperwork. Someone will have to tell me how a non-accredited investor investing in a QEP-only program through the mutual fund wrapper is legit… but oh well. Wall Street has packaged futures in a nice wrapper for the retail investor – cutting out the futures industry folks. The CME doesn’t mind, they’re still getting their exchange fees – but I think this could greatly reduce the number of IBs and non bank FCMs moving forward.
We joined the NIBA to help promote the interests of the IB. There are multi-million dollar lobbying groups looking after the interests of the big FCMs and big hedge funds utilizing the futures markets. The CME has their own lobbying efforts which appear increasingly at odds with the individual investor and small brokerage firms (the new data fees…anyone). So who is looking after the interests of the IBs? We need a group trying for a seat at the table before the small IB is wiped away, and the NIBA is that group.
