Registration Is the Floor, Not the Ceiling
Anyone trading your futures account for compensation must generally be registered with the CFTC and be an NFA member. Registration means background checks, proficiency requirements, disclosure obligations, and disciplinary oversight — but it does not mean the advisor is good. Registration is the floor. Your evaluation is the ceiling.
How CTAs Get Paid
Most charge a management fee on assets (commonly around 2 percent annually) plus an incentive fee on new profits (commonly around 20 percent, subject to a high-water mark). The incentive fee is meant to align interests: the advisor eats only when you do. Understand both numbers before signing, and understand what they do to net returns over time.
How to Check One Out
The NFA's BASIC database is free and public: registration status, disciplinary history, years in business. Then the disclosure document: strategy, fees, and audited track record including the worst drawdowns. Ten minutes with both documents can save you from an expensive education — and any registered professional worth working with will welcome the questions.