There are registrations, licenses, and various related certifications and regulations that need to be handled by the firms legal department.
Think about this for a moment, do you want to trust a brokerage and it's hired financial managers if they don't understand the basic legal requirements to provide services such as this one? It's absurd to think it's ok to conduct business like that.
you looks at PAMMs from a US res point of view... In the rest of the world a PAMM manager doesn't need certificates etc legally :( They and members sign T&Cs and vuala! (A MAM man from the other hand does need certs etc)... Despite of lack of proper legs we have good a PAMM structure f.e. Alpari Global... runs for 20 years or so... I personally prefer cT's Copy service (sadly not available in the US) - also based on simple T&Cs and much more flexible for investors...
NO. You're absolutely wrong, and you don't understand my point of view at all.
I'm looking at it from an industry wide point of view not a US residence point of view.
No legitimate Brokerage is going to hire someone to manage their investment portfolios and the investment portfolios of their clients without considerable industry experience and the appropriate financial markets education and legal protections.
Hiring someone with NO EXPERIENCE who clearly states they have no idea what they are doing, is an extremely questionable business practice at best. To allow an individual or group of individuals with an admitted lack of experience to manage the funds of others, and if the brokerage allows the unrestricted access to client funds for trading to their own 'fund managers', then I would consider this an extremely unethical and people have gone to prison for a long time for the mismanagement of funds in scenarios like this one.
Regardless of the scenario though, you aren't the original poster, so I don't really see the need for you to defend their illegal and unethical business practices.
If it looks too good to be true, it's probably a scam! Let the buyer beware.