How To Start Your Own Investment Firm

Owning an investment firm is getting more appealing.  It is slowly attracting aggressive, committed, and independent individual like you.  Why?  It imposes three much-hated business realities: long working hours, pure hard work, and strict adherence to government regulations.  If you have a faint heart, venturing into this is definitely not for you.  But if you see those challenges as opportunities, what awaits is a business that is more attuned with your personal goals, a business that is inherently less problematic, and a business that has an unlimited income potential.  Here are some sensible pointers to aide you in starting your own investment firm:   

1.      Understand the organizational issues.

  • Select the best organizational structure to protect your personal liability. Consult with an accountant and a lawyer to streamline and then, finalize, your decision. Your options include putting up an incorporate venture or a company or a partnership with limited liability. Here, you need to consider your tax privileges and your liability protection.
  • Draft a buy-sell agreement. This is necessary if there are multiple owners in our business venture. You should also get a "Key Man Insurance".
  • Determine how to fill in your organization setup. Assign accountabilities. Divide responsibilities. Once individuals have been identified, document all arrangements for legal purposes.
  • You may spend $5,000 to cover incorporation and legal fees.

2.      Handle the compliance issues.

  • Coordinate with the Securities and Exchange Commission (SEC). Inquire about the processes and requirements involved in forming your Registered Investment Adviser (RIA). This is compliance with the provisions of the Investment Adviser Act of 1940 (1940 Act). All materials are available and can be accessed in the SEC official website.
  • If your assets are less than $25 million, you are instructed to register under your state. If your assets are more than $30 million, register with the SEC. Rules may change every now and then. Check the SEC official website for current updates.
  • Setup your Investment Adviser Registration Depository (IARD) account. When you complete your company's SEC Form ADV, accomplish your IARD through
  • You need $5,000 to cover registration expenses. You also have to appoint a chief compliance officer. He is going to be tasked to put together your company's compliance manual.

3.      Facilitate operational and security analysis issues.

  • Appoint your chief operations officer (COO). He should design your corporate accounting system as well as our portfolio management system. He should also prepare the manual to standardize your operating procedures. Allocate $15,000 here.
  • Name your director of research. He needs to put up your databases and your investment principles. Likewise, he should prepare a manual to standardize your research procedures. Set aside $5,000 for this.

4.      Meet marketing issues.

  • Assign your director of marketing. He needs to take care of licensing your sales personnel and outline your investment objectives. In order to meet the marketing issues head on, he should pen the manual to standardize your marketing procedures. Around $5,000 is needed in this area.

Hard work is always rewarded.  Get inspire by that idea and make a difference in running your own investment firm.


Share this article!

Follow us!

Find more helpful articles: