Brokers entering the managed-account space face one fundamental question before anything else: which model should we offer — PAMM, MAM, Copy Trading, or all three?
The answer shapes everything downstream — technology stack, risk architecture, regulatory posture, marketing narrative, and ultimately the kind of clients the brokerage attracts. Yet the differences between these three models are routinely misunderstood, conflated, or oversimplified into a single "social trading" label.
This guide breaks each model down to its mechanical core, compares them side by side, and explains why the most successful brokerages don't choose one — they deploy all three as layers of a single ecosystem.
The Core Concept: Delegation of Trading Decisions
All three models solve the same human problem: the majority of retail participants lack the time, skill, or confidence to trade profitably on their own. They want exposure to financial markets without becoming full-time analysts.
Each model offers a different answer to the question "How exactly does my money follow someone else's expertise?" — and that difference has enormous consequences for execution, risk, transparency, and user experience.
PAMM — Percentage Allocation Management Module
How It Works
In a PAMM structure, investor funds are pooled into a single managed account. The money manager trades one master account, and profits or losses are distributed proportionally among all investors based on their share of the total pool.
Think of it as a private fund:
- Investor A contributes $50,000 (50% of the pool)
- Investor B contributes $30,000 (30%)
- Investor C contributes $20,000 (20%)
When the manager opens a 1-lot EUR/USD position, all three investors participate in the same trade with the same entry and exit price. If the trade generates $1,000 in profit, Investor A receives $500, B receives $300, and C receives $200 — automatically, at rollover.
The master account balance always equals the sum of all subscribed investment account balances. When investors deposit, the master account balance increases. When they withdraw, it decreases. The manager trades the actual pooled capital shown in the master account.
Key Characteristics
Pooled capital. All investor funds sit in one account. The manager sees one equity figure, one margin level, one set of open positions. There are no separate sub-accounts per investor — allocation happens at the platform level during rollover.
Proportional P&L distribution. Every investor earns (or loses) the exact same percentage return as the money manager. If the manager makes 8% in a month, every investor makes 8% before fees — regardless of when they joined or how much they deposited. This is a unique advantage that Copy Trading and MAM cannot guarantee due to trade replication timing differences.
Rollover-based settlement. Profits, losses, fees, deposits, and withdrawals are typically processed during periodic rollover events. This is the moment when the platform recalculates each investor's share, charges performance fees, and adjusts equity. However, brokers can also configure PAMM for immediate deposit/withdrawal processing if they prefer a faster flow.
No individual trade visibility. Investors see their equity curve, P&L, and balance history — but they don't see individual open positions in their terminal (e.g. in MT5). The manager's trading activity is abstracted away behind the pool. Investors receive only balance operations reflecting their share of the P&L from the master account.
Manager has full discretion. The money manager controls position sizing, instruments, holding periods, and risk. Investors trust the manager's judgment wholesale. Importantly, the master trader cannot withdraw investor funds — they only have trading authority.
Fund-like security model. Direct deposits or withdrawals to/from master accounts are not allowed, maintaining fund security and allocation integrity. All fund movements happen through investment accounts.
Who It Serves Best
PAMM is suitable for both retail and professional money management. It naturally attracts passive investors who want a hands-off experience similar to a hedge fund. The model also appeals to professional money managers and fund-style operators who think in terms of AUM, not follower counts. It can be used with or without the Leaderboard, depending on the business model — without the Leaderboard, it can also function as a private fund-style managed account.
Strengths
- Cleanest execution — one trade, one fill, zero slippage between master and investor accounts
- Investors receive the exact same return as the money manager (proportional to their share)
- Simplest user experience for investors — no platform installation, no trade notifications
- Scalable to large AUM without execution degradation
- All 6 B2COPY fee types available (performance, management, subscription, profit, trade/volume, joining)
- PAMM investors don't occupy MetaTrader license seats — significant cost savings at scale
- Optional Leaderboard — can be publicly listed for retail discovery or hidden for private fund-style management
- Regulatory familiarity — PAMM maps closely to traditional fund structures
- Minimum capital can be low — suitable for small investors as well as large allocators
Limitations
- Lower transparency — investors can't see individual trades in real time
- Deposits and withdrawals are typically processed at rollover (though instant processing can be configured)
- Investors cannot trade manually on their investment accounts or close positions
- Commonly viewed as an investment fund, which may require specific licensing in some jurisdictions
MAM — Multi-Account Manager
How It Works
MAM allows one trader to copy trades to multiple investment accounts with customized position allocation. Unlike PAMM, where funds are pooled, MAM keeps investor funds in separate individual accounts. The manager's trades are replicated across these accounts using configurable allocation methods.
When the manager opens a 2-lot position, the system uses one of six allocation methods to determine each investor's lot size:
- Proportional to Balance — lot size based on investor's balance vs. master's balance
- Proportional to Equity — lot size based on investor's equity vs. master's equity
- Proportional to Balance x Ratio — balance proportion multiplied by a custom coefficient
- Proportional to Equity x Ratio (default) — equity proportion multiplied by a custom coefficient
- Fixed Lot Allocation — every copied trade uses a predetermined fixed lot size regardless of account sizes
- Ratio Multiplier (Lot Allocation) — master's lot size multiplied by a fixed coefficient
The critical difference from PAMM: each investor account holds its own positions. Investor A might have 0.5 lots open, Investor B might have 0.3 lots, and Investor C might have 0.2 lots — all from the same manager's single trade decision.
Key Characteristics
Separate accounts. Every investor has their own trading account with their own open positions, margin, equity, and transaction history. The manager operates a master account, but execution happens across individual accounts.
Six allocation methods. MAM supports the same six allocation methods as Copy Trading. Different allocation methods, risk ratios, and fee plans can be applied to each subscribed account. The manager has full control over each investor's settings.
Real-time trade replication. Trades are copied to investor accounts in real time when the manager executes. There's no rollover delay — positions appear immediately in investor accounts.
Instant deposits and withdrawals. Unlike PAMM, MAM processes deposits and withdrawals instantly. Investor funds stay in their own account and can move freely without waiting for rollover events.
Per-account risk customization. Because accounts are separate, brokers can apply different leverage, margin requirements, or risk limits to individual investor accounts. Investors can also set personal risk limits — for example, "stop copying if I lose more than $10,000." If the limit is hit, all trades close instantly and the account is unsubscribed automatically.
Reverse copy mode. Managers can enable reverse copying for specific investor accounts, where buys become sells and vice versa — allowing flexible strategy adaptation.
Read-only mode for investors. MAM investment accounts operate in read-only mode — investors can view their allocated positions but cannot trade manually or close positions opened by the manager. (Note: on cTrader, a trading permission is technically granted due to platform requirements, but MAM investors aren't intended to trade on their accounts.)
Manager has full discretion. The manager controls all trading decisions and can adjust allocation settings for each investor individually. They can pause copying for specific accounts, change allocation methods, set copy multipliers, view investor positions, and close trades individually.
Who It Serves Best
MAM is designed for institutional or professional money managers. It appeals to fund managers, professional signal providers, traders working with private clients, and brokers offering managed accounts. MAM can also be combined with PAMM for hybrid setups.
Strengths
- Individual account segregation satisfies most regulatory frameworks
- Six allocation methods let managers handle diverse portfolio sizes and risk profiles
- Real-time trade visibility — investors can log into their own accounts and see positions
- Instant deposits and withdrawals — no rollover delays
- Customizable risk parameters per account, including investor-set loss limits
- Reverse copy mode for flexible strategy management
- All 6 B2COPY fee types available (performance, management, subscription, profit, trade/volume, joining)
- Full manager control — pause, adjust, or customize each investor's settings individually
Limitations
- Higher technical complexity — more accounts to manage, more execution overhead
- Execution prices may vary slightly between the manager and investors due to replication timing
- Investors cannot trade manually on their accounts (read-only mode)
- Best suited for professional contexts — less intuitive for retail audiences
Copy Trading — Trade Replication with Investor Autonomy
How It Works
Copy Trading operates on a fundamentally different principle: individual choice and transparency. Investors browse a marketplace of strategy providers (masters), review their performance statistics, and choose whom to follow. When they subscribe, the master's trades are automatically replicated in the investor's own account — but the investor retains full control.
Here's what makes Copy Trading unique:
- The investor chooses the master (not assigned by a fund manager)
- The investor sees every trade in real time — entries, exits, P&L
- The investor can unsubscribe at any time without waiting for rollover
- The investor can close individual copied positions at will
- The investor can trade manually alongside copied trades (if the broker allows it)
- The investor can set personal risk parameters — copy ratio, loss limits, and more
- The investor can enable reverse copy — taking opposite positions from the master
The replication happens at the trade level: when the master opens EUR/USD, the system calculates the appropriate lot size for the investor's account using one of six allocation methods (Proportional to Balance, Proportional to Equity, Proportional to Balance x Ratio, Proportional to Equity x Ratio, Fixed Lot Allocation, or Ratio Multiplier) and opens a corresponding position.
Key Characteristics
Investor-driven selection. The investor actively chooses which masters to follow based on public performance data — track record, drawdown, B2Score rating, follower count, and strategy description. This is a marketplace model, not a delegation model.
Full transparency. Every position the master opens is visible to the investor in real time. There's no abstraction layer — investors know exactly what trades are being copied and what their P&L looks like at any moment.
Individual account with full ownership. The investor's account is entirely theirs. They can deposit and withdraw instantly, subscribe, unsubscribe, close individual copied positions, and even trade manually alongside copied trades (if the broker enables this setting).
Configurable copy parameters. Investors can set copy ratios, loss limits, and other risk controls. They can also enable reverse copy mode to take opposite positions from the master — a unique feature that lets investors potentially profit from consistently losing strategies.
Manual trading alongside copying. Unlike PAMM and MAM, Copy Trading allows investors to trade manually on their investment accounts in parallel with copied trades (if the broker enables this setting). This means investors can supplement copied strategies with their own analysis.
Social dynamics. Copy Trading naturally generates community features — leaderboards, ratings, follower counts, strategy descriptions, and social proof. This makes it inherently more "marketable" than PAMM or MAM.
Six fee types. Masters can configure any combination of B2COPY's six fee types: performance fee (% of net profit with HWM), subscription fee (fixed USD/period), profit fee (% of profitable positions), management fee (% of AUM), trade/volume fee (USD per lot), and joining fee (one-time USD charge). The platform handles all fee calculations automatically, including High-Water Mark protection.
Who It Serves Best
Copy Trading is the broadest-appeal model, designed for retail clients. It attracts:
- Retail investors who want exposure to professional strategies without high minimum investments
- Semi-active traders who want to learn by watching (and copying) more experienced traders
- Content creators and influencers who build personal brands around their trading performance
- Brokers focused on retail growth who need a user-acquisition engine with viral potential
Strengths
- Lowest barrier to entry — investors can start with small capital
- Highest transparency — every trade is visible, every metric is public
- Strongest engagement — social features, leaderboards, and community drive retention
- Viral growth potential — successful masters attract followers organically
- Investor autonomy — subscribers control their risk, can close individual positions, and exit instantly
- Reverse copy mode — follow losing traders in opposite direction for potential profit
- Six fee types for strategy providers — maximum monetization flexibility
- Manual trading allowed alongside copying — investors can supplement strategies with own trades
- Marketing-friendly — easy to explain, demonstrate, and promote
Limitations
- Execution timing — copied trades execute after the master's fill, so investors don't receive the exact same return as the money manager (prices may vary slightly)
- Lot rounding on small accounts can distort risk (see our article on minimum deposits)
- Requires minimum capital for proper trade replication fidelity
- Investor behavior risk — followers may unsubscribe during temporary drawdowns, missing recoveries
Side-by-Side Comparison
Capital Structure
- PAMM: Pooled into one master account. All investors' money in one account. Investors own a share of the pool, not individual positions.
- MAM: Individual accounts with proportional position copying. Funds are segregated but managed centrally.
- Copy Trading: Individual accounts with independent position copying. Investor money never leaves their personal account.
Trade Execution
- PAMM: One trade using total pooled capital. P&L distributed proportionally by equity share at rollover.
- MAM: Master trade copied per allocation settings. Each account holds its own positions in real time.
- Copy Trading: Master trade copied to all investors per their settings. Each generates an individual order with configurable parameters.
Investor Control
- PAMM: Deposit/withdraw only (typically during rollover, or instant if configured). No manual trading. No position closing.
- MAM: Instant deposit/withdraw. Trader controls allocation for each investor. Investors can set personal risk limits. No manual trading (read-only mode).
- Copy Trading: Full control: deposit, withdraw, adjust risk, pause, close individual positions, enable reverse copy, trade manually alongside copied trades.
Transparency
- PAMM: Investors see P&L and equity curves through balance operations, but not individual open positions in their terminal.
- MAM: Investors can view their own account and see all replicated positions in real time.
- Copy Trading: Maximum. Every trade, every metric, every statistic is public and real-time. Investors see positions in their own terminal.
Fee Structure
- PAMM: All 6 B2COPY fee types available: performance fee (% of net profit with HWM), management fee (% of AUM), subscription fee (fixed USD/period), profit fee (% of profitable positions), trade/volume fee (USD per lot), and joining fee (one-time). Charged at scheduled periods plus withdrawal/unsubscribe events.
- MAM: Same 6 fee types available. Different fee plans can be applied to each investor account individually.
- Copy Trading: Same 6 fee types available. Charged at scheduled periods (daily/weekly/monthly) plus automatically triggered by withdrawals and unsubscription events — preventing "calendar schemes" where investors try to exit before fee collection.
Minimum Investment
- PAMM: Can be low — suitable for small investors as well as large allocators. Minimum deposit is set by the money manager and always displayed in USD.
- MAM: Typically higher, geared toward professional service. Set by the money manager based on strategy requirements.
- Copy Trading: Low — accessible to retail investors. Higher minimums improve replication accuracy by reducing lot rounding issues.
Scalability
- PAMM: Excellent. One account, one set of positions — adding investors doesn't add execution complexity. PAMM investors don't occupy MetaTrader license seats.
- MAM: Good, but adds execution overhead per account. Hundreds of accounts still manageable with modern infrastructure.
- Copy Trading: Good for thousands of followers with proper infrastructure. Each follower generates individual orders.
Target Audience
- PAMM: Retail and professional. Passive investors, professional money managers, fund-style operators.
- MAM: Professional and institutional. Fund managers, private client managers, regulated asset managers.
- Copy Trading: Retail social trading, beginners, semi-active investors, content creators, broad consumer audience.
The Technical Reality: How Each Model Handles Critical Scenarios
Scenario 1: A New Investor Joins Mid-Strategy
PAMM: The new investor subscribes, then deposits funds to their investment account. The deposit request is processed during the next rollover. At rollover, the system recalculates shares and the new investor's funds are reflected in the master account balance. If the manager has open positions, the system performs reallocation — virtual investor positions are closed and reopened at the same price (without commissions/spreads) to adjust shares. The new investor effectively "enters" existing positions at current market value.
MAM: The new investor's account is linked to the manager with instant deposit processing. On the next trade the manager opens, the account participates with its configured allocation method. Existing open positions on the manager's account are generally not retroactively copied.
Copy Trading: The new follower subscribes and begins copying from the next trade the master opens. B2COPY offers the option to copy existing open positions at subscription or start fresh — configurable by the broker.
Scenario 2: An Investor Wants to Withdraw During Open Positions
PAMM: The withdrawal request is queued for the next rollover (unless instant processing is configured). At rollover, the system calculates the investor's share, charges any pending fees, and reduces the pool. If there are open positions, the system performs autocorrection — automatically partially closing positions proportionally to the withdrawal amount. This ensures remaining investors' shares are not distorted.
MAM: Withdrawals are processed instantly. The investor can withdraw funds from their individual account without waiting for any rollover. Since positions sit in individual accounts, the manager may need to adjust positions, but other investors are unaffected.
Copy Trading: The investor can unsubscribe and close all copied positions instantly. Fees are calculated and charged at the moment of unsubscription. The master's positions and other followers are completely unaffected. This is the most frictionless exit process.
Scenario 3: The Market Gaps Overnight
PAMM: Impact is absorbed uniformly across the pool. Every investor experiences the exact same percentage drawdown. The manager's single account means there's one margin call threshold, one stop-out level — clean and predictable.
MAM: Impact hits each investor account individually based on its leverage setting and position size. Accounts with higher leverage or smaller equity may hit stop-out while others survive. The manager faces a complex situation: some followers might be liquidated while the master account continues trading.
Copy Trading: Each follower's account handles the gap independently. Followers with aggressive copy ratios or small accounts may be stopped out. The master is unaffected. This creates divergence between the master's performance and individual follower results — a challenge that proper minimum deposit requirements help mitigate.
Scenario 4: Performance Fee Calculation
PAMM: All 6 fee types are calculated based on the investor's share of the pool. Performance fees use the High-Water Mark principle, ensuring investors never pay fees on the same profits twice. Fees are charged during rollover periods (daily, weekly, or monthly) and also triggered by withdrawals and unsubscription.
MAM: The same 6 fee types are available, and they can be configured per investor account. Like Copy Trading, fees are charged on schedule (daily, weekly, or monthly) and also triggered by withdrawals and unsubscription. The per-account nature of MAM allows for customized fee arrangements with different investors.
Copy Trading: B2COPY calculates all fees automatically using HWM where applicable. Fees are charged on schedule (daily, weekly, or monthly) and also triggered by withdrawals or unsubscription events — preventing the "calendar scheme" where investors try to exit just before fee collection. The fee calculation period starts from the subscription date of each individual investor, ensuring fairness regardless of when copying began.
Why Leading Brokers Deploy All Three
The most competitive brokerages don't treat PAMM, MAM, and Copy Trading as competing alternatives. They deploy all three as complementary layers serving different segments of their client base:
Layer 1: Copy Trading as the Entry Point
Copy Trading is the widest funnel. It attracts retail traders with low barriers, engaging UI, and social proof mechanics. New clients discover the broker through a top-performing strategy on the leaderboard, start following with a small deposit, and experience their first taste of managed returns. The transparency and autonomy of Copy Trading build trust.
Layer 2: PAMM for Passive Wealth Builders
As clients accumulate capital and confidence, some prefer a more hands-off approach. They don't want to manage copy parameters or watch individual trades — they want to allocate capital to a proven manager and check their returns periodically. PAMM offers this "set and forget" experience with clean, proportional P&L distribution where investors receive the exact same return as the manager.
Layer 3: MAM for Professional and Institutional Clients
Fund managers, professional traders working with private clients, and institutional allocators need account segregation, custom allocation, and individual reporting. MAM provides the per-account control these participants require while maintaining centralized management efficiency.
The Ecosystem Effect
When a broker offers all three models through a unified platform like B2COPY, powerful network effects emerge:
- Talent cultivation. A successful copy trading master can graduate to managing a PAMM fund, bringing their proven track record and existing follower base.
- Capital migration. Investors start in Copy Trading with $500, build confidence, and eventually allocate $50,000 to a PAMM account — all within the same brokerage.
- Cross-pollination. PAMM managers can offer Copy Trading strategies to attract smaller investors while maintaining their core fund. MAM managers can run satellite Copy Trading accounts for marketing purposes.
- Unified technology. One platform, one admin panel, one risk management framework, all 6 fee types across all three models — dramatically reducing operational complexity and cost.
Choosing the Right Model: A Decision Framework
Start with Your Client Base
If your clients are primarily retail traders with smaller deposits:
Start with Copy Trading. It's the easiest to market, the most engaging, and has the lowest barriers to entry. You'll build volume and brand recognition quickly.
If your clients are experienced investors who want hands-off fund-style returns:
Lead with PAMM. These clients value simplicity, proportional returns identical to the manager's, and a familiar investment fund structure.
If you serve fund managers, professional traders with private clients, or institutional allocators:
MAM is essential. Account segregation, per-account allocation control, and individual reporting are compliance requirements, not nice-to-haves.
Consider Your Regulatory Environment
Some jurisdictions classify PAMM as collective investment management, requiring specific licenses. Copy Trading, where the investor retains full control and decision-making authority, often falls under lighter regulatory frameworks. MAM's individual account structure satisfies segregation requirements in most regulated markets. Consult your compliance team before choosing.
Plan for Growth
The best strategy isn't choosing one model — it's starting with one and expanding to all three. Most brokers begin with Copy Trading (fastest time to market, broadest appeal), add PAMM when they attract professional managers, and introduce MAM when institutional demand justifies it.
B2COPY supports all three models on a single platform with unified infrastructure, making this graduated expansion operationally seamless.
Common Misconceptions
"PAMM and MAM are the same thing"
They're not. PAMM pools funds into one master account; MAM keeps investor funds in separate individual accounts. This single difference has cascading implications for execution, risk, reporting, fees, and regulation. In some definitions, MAM is a broad term for any investment structure where the money manager has comprehensive control — and PAMM may be considered a type of MAM. But in B2COPY, they are distinct products with different mechanics.
"Copy Trading is just for beginners"
Copy Trading is for anyone who values transparency, choice, and autonomy. Sophisticated investors use it to diversify across multiple strategies simultaneously, with precise risk controls on each. Professional traders use it to monetize their expertise, build personal brands, and earn through 6 different fee types. The ability to close individual positions, trade manually alongside copying, and enable reverse copy makes it a powerful tool for experienced users too.
"You need to pick one model"
You don't — and you shouldn't. Each model serves a different segment and life-cycle stage. The broker that offers all three captures the broadest market and creates natural upgrade paths that increase lifetime value.
"PAMM investors always need large capital"
Not necessarily. According to B2COPY's product specifications, PAMM minimum capital can be low — it's suitable for small investors as well as large allocators. The minimum deposit is set by the money manager, not by the platform.
"All copy trading platforms are the same"
The mechanical principle is similar, but implementation quality varies enormously. Execution speed, fee protection (HWM, anti-fraud charging on withdrawals and unsubscription), 6 fee types, allocation accuracy, reverse copy, risk limits, and infrastructure reliability separate professional platforms from basic plugins.
Conclusion: Models Are Strategies, Not Just Features
PAMM, MAM, and Copy Trading aren't interchangeable checkboxes on a feature list. Each represents a distinct business model with its own economics, audience, regulatory profile, and growth dynamics.
PAMM is a fund. It pools capital, distributes returns proportionally (investors get the exact same return as the manager), and serves passive investors who want professional management without involvement. Investors don't see individual trades — they see results.
MAM is a professional management tool. It replicates a manager's decisions across segregated individual accounts with six allocation methods and per-account customization, satisfying compliance requirements and serving professional clients. Investors see their positions but operate in read-only mode.
Copy Trading is a marketplace. It connects strategy providers and investors through maximum transparency, investor autonomy, and community dynamics — creating viral growth and deep engagement. Investors retain full control: they can close positions, trade manually, enable reverse copy, and exit instantly.
The brokers who thrive aren't the ones who pick the "best" model. They're the ones who understand what each model does, deploy them strategically, and give their clients the freedom to choose the experience that fits.
That's not a product decision. That's a business architecture decision. And with platforms like B2COPY supporting all three models on unified infrastructure with all 6 fee types across every product, making that decision has never been more practical.