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What is Captial Introduction?
Asked by Julie Scuderi






Answer By Richard Wilson

Capital introduction is usually the phrase that refers to the introductions that prime brokerage houses will make on behalf of their money managers to help raise their assets under management. Some prime brokerage houses will have several capital introduction professionals in house or a whole team dedicated to the work. The prime broker gets paid through trades made by the manager so the more assets they have under management the more they will get paid each quarter on those larger trades.

Most capital introduction professionals are paid on salary and bonus on overall trading activity and not on earning a percentage of fees from assets raised like a third party marketer. Capital introduction services have came under some scrutiny lately and there are talks of it going away completely due to a conflict of interests.