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As more investors look to move out of equities and away from the dangers in the stock market, exploration in alternative investments like Forex trading have become more popular. In addition to diversifying their portfolios, investors may want to add a level of sophistication to their financial acumen.

However, as many people find themselves perplexed by the volatile nature of today’s market, the idea of diving head first into a new asset base can be overwhelming. As with any vehicle, investors will need to take the time to familiarize themselves with certain characteristics of trading currencies that differentiate the concept from stocks, options, or bonds.

“Utilizing forex as a part of your overall portfolio is a great idea on the side of diversifying,” says James Estep, managing partner for Wealth Builders FX LLC. “In the past, people always look at diversifying among stocks, bonds, and maybe real estate. By implementing forex into your portfolio, you can definitely add some value in that diversification model.”

As a full-service investment firm targeting the Forex market, Wealth Builders FX looks to provide its clients with the tools needed to understand and capitalize on opportunities in trading currencies around the world. Teaming up with Forex broker FXCM, the company offers individual accounts on its website, wealthbuildersfx.com, and tools like their automated Personal Trading Assistant for investors and traders seasoned enough to go at it on their own.

For investors seeking the security of having professionals run their accounts, Wealth Builders FX has developed a unique product that provides exposure to the Forex market without the day-to-day demands. The firm offers Managed Forex accounts to clients looking to take a more hands-off approach to investing. While trading currencies offer advantages such as more leverage and round-the-clock trading, those advantages can easily backfire for novices.

“We use our years of experience in trading the Forex market,” Estep says. “You can over-leverage yourself quite a bit here. The advantage of our Managed Account is that we do that work for you. We have found a good leverage that works for us and for our system. We implement our own money management techniques along with that.”

Established in 2006, Wealth Builders FX began offering managed accounts in January 2007. Estep, along with his partners, began receiving interest from friends and family members to manage their individual accounts to trade Forex. That gradually evolved into the Forex fund the company offers today. As the Forex market’s popularity continued to grow, the firm took steps to take advantage of the interest.

The fee structure for managed accounts resembles the industry standard of 2% of annual assets under management and a 20% performance-based fee on net profits. Investors will also need a minimum of $5,000 to open a new account.

“From the get-go, we set it up to expand,” Estep says. “FXCM is set up on a percentage allocation basis. So we as the managers decide how many lots we’re going to purchase based on the amount that we have under management. [Based on] the combined amount of our clients’ accounts that we’re currently managing, we decide how many lots we’re going to purchase. The lots could be divided up among however many clients we have, and it’s all based on the amount that they have in the account.”

With about six clients and total assets under management, excluding non-reportable accounts at around $20,000, the firm is still dealing with the obstacles of any start-up: trying to build up its track record and spreading its name in the investor community.

They seem to be off to a good start. Estep says that in 2008, the managed Forex fund produced a return of 28.38% after fees. Considering that stocks generally lost about a third of their value last year, the firm has a compelling selling point.

“The roadblock that we ran into was twofold,” Estep says. “One was that nobody really knew what Forex was back in January ’07. It really wasn’t a known investment vehicle. The second thing was that we didn’t have a lot of trading history that we had documented on the books. We kept running into people saying, ‘Come back and see me when you have two years’ worth of history.’ So we decided that we would build up some history before we actually went out and did any real marketing.”

Another shrewd move the firm made was to register with the National Futures Association early. As Forex became increasingly popular in the investment community, stricter regulation was sure to follow. The Forex industry had always been infamous for fraudulent activity in which unsuspecting investors or traders were duped by dishonest organizations offering get-rich-quick strategies.

“In mid-to-late 2007, we looked at other ways to get some credibility,” Estep says. “We kept hearing about different Forex scams and questions about how credible a company is if we don’t know a lot about them. Now regulation is turning toward making the Forex industry regulated by the NFA. But back in 2007, that was by no means a requirement. So to add some credibility to Wealth Builders FX, we decided to go ahead and register ourselves with the NFA as a CTA firm.”

The firm has been receiving positive feedback as the Wealth Builder FX name begins to garner attention. As investors look for new vehicles in place of stocks— even if it’s only for the near term—the firm is positioned to capture some of that windfall for the Forex industry.

“We’ve attended a few trade shows and gotten an overwhelming response from people asking us questions and showing a lot of interest in our Personal Trading Assistant as well as the results from our Managed Accounts,” Estep says. “All these people have invested in the stock market and lost 30% over the year. Now you can go and invest with a Forex firm that’s making 28.38%. That would help their overall portfolio quite a bit. So we’re getting that word out and letting them see that quality—the reasons for diversification are a big positive, in our opinion.”