Typically, when investors trade independently, they often encounter difficulties since their capital might be insufficient for a particular trading strategy. To overcome this hurdle, with a PAMM account, the Investment Manager will pool funds from various investors based on the trading strategy.

Investors can in turn receive a prorated profit from any investment strategy employed by the Investment Manager.

For the Investment Manager, PAMM account enables them to pool sizeable funds from investors and earn a performance fee. They also get to trade with a larger capital.

Typically, their profits are shared based on the investors' contributed amount as a percentage of the PAMM account's capital.