can i start a private investment firm?

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uberrebu
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can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 1:43 am

I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks

Gill
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Re: can i start a private investment firm?

Post by Gill » Fri Oct 05, 2018 8:09 am

Yes, assuming you have all the appropriate qualifications and licenses.
Gill

chevca
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Re: can i start a private investment firm?

Post by chevca » Fri Oct 05, 2018 9:04 am

uberrebu wrote:
Fri Oct 05, 2018 1:43 am
I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks
If you're not a financial analyst or advisor, why do you feel you're qualified to do this?

barnaclebob
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Re: can i start a private investment firm?

Post by barnaclebob » Fri Oct 05, 2018 9:15 am

If you are asking here, its probably not yet legal for you and a long expensive ways away.

123
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Re: can i start a private investment firm?

Post by 123 » Fri Oct 05, 2018 9:23 am

Here's a couple of links to get you started. You'll need to be familiar with the U.S. Securities and Exchange Commission https://www.sec.gov/ and Financial Industry Regulatory Authority https://www.finra.org/. Depending on what states you do business in there may be respective state regulatory authorities as well.

Have at it!
The closest helping hand is at the end of your own arm.

fundseeker
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Re: can i start a private investment firm?

Post by fundseeker » Fri Oct 05, 2018 9:24 am

Coincidentally, I just checked that out this morning and found that it did not take anything but passing the Series 65 exam to be a Financial Advisor, though each state varies. There is a ton of information on the internet by just searching "how to become a financial advisor."

alex_686
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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 9:36 am

Welcome to the forum.

What do you mean by "start a private investment firm"?

Some forms require very little in the way of licenses or registration. You could be a independent consultant, writing reports for hire. What is your specialty? A "financial coach" does not require anything - then again it is a pretty meaningless title. I know a guy who ran a mutual fund out of his spare bedroom. Note: not public, for family only, and this was 30 years ago so regulations may have drifted since the.

Others require a fair amount of both. These kick in if you you plan on soliciting clients who are not institutional investors or accredited investors.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 9:47 am

Gill wrote:
Fri Oct 05, 2018 8:09 am
Yes, assuming you have all the appropriate qualifications and licenses.
Gill
that is what i meant by am not financial advisor...meaning i dont plan to do any certifications..if a license doesnt require that i take some stupid financial exams then am fine with that but not trying to take some exams is my point

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 9:50 am

alex_686 wrote:
Fri Oct 05, 2018 9:36 am
Welcome to the forum.

What do you mean by "start a private investment firm"?

Some forms require very little in the way of licenses or registration. You could be a independent consultant, writing reports for hire. What is your specialty? A "financial coach" does not require anything - then again it is a pretty meaningless title. I know a guy who ran a mutual fund out of his spare bedroom. Note: not public, for family only, and this was 30 years ago so regulations may have drifted since the.

Others require a fair amount of both. These kick in if you you plan on soliciting clients who are not institutional investors or accredited investors.
Exactly what am trying to do..it will be for like 5 friends maximum...so my money and like 5 other peoples money...at any given time will never exceed 10 peoples money. So i am looking for the simplest way to have this done legally. I just want to do this for the books especially when investing millions..the IRS can come sniffing any time and i want to be clean when they do come.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 9:51 am

123 wrote:
Fri Oct 05, 2018 9:23 am
Here's a couple of links to get you started. You'll need to be familiar with the U.S. Securities and Exchange Commission https://www.sec.gov/ and Financial Industry Regulatory Authority https://www.finra.org/. Depending on what states you do business in there may be respective state regulatory authorities as well.

Have at it!
Will do it in state of NJ

bloom2708
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Re: can i start a private investment firm?

Post by bloom2708 » Fri Oct 05, 2018 9:52 am

How will you make money?

If you "sell" a Boglehead style, low cost, total market index approach, where do you make money?

It can't work. In another thread, the ONLY was you could do something is start a non-profit that is funded by interested parties that share the same low cost/help the masses/index fund approach.

Then you happily/broadly give away great advice for free! Similar to what this site has done for years. No profit. $0.
"We are not here to please, but to provoke thoughtfulness." --Unknown Boglehead

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cheese_breath
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Re: can i start a private investment firm?

Post by cheese_breath » Fri Oct 05, 2018 9:53 am

uberrebu wrote:
Fri Oct 05, 2018 9:47 am
Gill wrote:
Fri Oct 05, 2018 8:09 am
Yes, assuming you have all the appropriate qualifications and licenses.
Gill
that is what i meant by am not financial advisor...meaning i dont plan to do any certifications..if a license doesnt require that i take some stupid financial exams then am fine with that but not trying to take some exams is my point
Do you consider yourself above such things? I hope you can put up with stupid clients.
The surest way to know the future is when it becomes the past.

pennylane
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Re: can i start a private investment firm?

Post by pennylane » Fri Oct 05, 2018 9:55 am

chevca wrote:
Fri Oct 05, 2018 9:04 am
uberrebu wrote:
Fri Oct 05, 2018 1:43 am
I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks
If you're not a financial analyst or advisor, why do you feel you're qualified to do this?
Realistically, are any of these guys really "qualified"? We all know they're just salespeople.

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TomatoTomahto
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Re: can i start a private investment firm?

Post by TomatoTomahto » Fri Oct 05, 2018 9:59 am

uberrebu wrote:
Fri Oct 05, 2018 9:50 am
alex_686 wrote:
Fri Oct 05, 2018 9:36 am
Welcome to the forum.

What do you mean by "start a private investment firm"?

Some forms require very little in the way of licenses or registration. You could be a independent consultant, writing reports for hire. What is your specialty? A "financial coach" does not require anything - then again it is a pretty meaningless title. I know a guy who ran a mutual fund out of his spare bedroom. Note: not public, for family only, and this was 30 years ago so regulations may have drifted since the.

Others require a fair amount of both. These kick in if you you plan on soliciting clients who are not institutional investors or accredited investors.
Exactly what am trying to do..it will be for like 5 friends maximum...so my money and like 5 other peoples money...at any given time will never exceed 10 peoples money. So i am looking for the simplest way to have this done legally. I just want to do this for the books especially when investing millions..the IRS can come sniffing any time and i want to be clean when they do come.
If I had a friend starting a private investment firm who was too lazy to pass a few Series Exams, I wouldn’t give him any money to manage. Truth be told, I probably wouldn’t even if he passed.

Fwiw, wife and son have passed various FINRA exams. Just requires some studying. It’s not rocket science.
Zero Net Carbon by 2019.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 10:02 am

fundseeker wrote:
Fri Oct 05, 2018 9:24 am
Coincidentally, I just checked that out this morning and found that it did not take anything but passing the Series 65 exam to be a Financial Advisor, though each state varies. There is a ton of information on the internet by just searching "how to become a financial advisor."
Well i am trying to start a private investment firm..not sure if that is all that is needed.
My question is what are required to start a small investment firm that manages money for a very small group of friends/family members

alex_686
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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 10:05 am

uberrebu wrote:
Fri Oct 05, 2018 9:47 am
Exactly what am trying to do..it will be for like 5 friends maximum...so my money and like 5 other peoples money...at any given time will never exceed 10 peoples money. So i am looking for the simplest way to have this done legally. I just want to do this for the books especially when investing millions..the IRS can come sniffing any time and i want to be clean when they do come.
And
uberrebu wrote:
Fri Oct 05, 2018 9:47 am
that is what i meant by am not financial advisor...meaning i dont plan to do any certifications..if a license doesnt require that i take some stupid financial exams then am fine with that but not trying to take some exams is my point
You options are going to be pretty limited. If you don't want to be a licensed financial advisor you really can't charge for financial advice. As a side note, most of the license focuses on the legal duties you have to your clients.

What might fit would be a "Investment Club". They way it sidesteps the financial advisor rules is that all members are active participants. The ability to pay one of its members for services is pretty limited - unless that person is a registered advisor.

At least for stocks and bonds. There are other options for real estate and private equity but that is outside my area of expertise.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 10:07 am

TomatoTomahto wrote:
Fri Oct 05, 2018 9:59 am

If I had a friend starting a private investment firm who was too lazy to pass a few Series Exams, I wouldn’t give him any money to manage. Truth be told, I probably wouldn’t even if he passed.

Fwiw, wife and son have passed various FINRA exams. Just requires some studying. It’s not rocket science.
That is the point this is not for everyone...and it is friends who will ask to get in and i can say no.
When you making money and have proofs to back it up..you dont need advertisement. Yes there are frauds out there, BUT the whole entire world is not fraud. Point is some people are just made different. And also when you are very transparent, that makes things even easier.
Issue is people are not transparent and then start looking for cover ups to clean their mess.

Not trying to explain my approach but my point is i am NOT going to be here looking for people's money. Plan was to focus mostly on my own money and if friends want to get in, then i want to find a way to be able to do so. Hence why i posted the question.
Last edited by uberrebu on Fri Oct 05, 2018 10:07 am, edited 1 time in total.

longleaf
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Re: can i start a private investment firm?

Post by longleaf » Fri Oct 05, 2018 10:07 am

How to setup a direct connection between your money and the market (being a brokerage yourself)?

Would this not require significant upfront cost?

How will you pay for this?

How will you make money?
Frugality, indexing, time.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 10:09 am

longleaf wrote:
Fri Oct 05, 2018 10:07 am
How to setup a direct connection between your money and the market (being a brokerage yourself)?

Would this not require significant upfront cost?

How will you pay for this?

How will you make money?
Don't worry about what i will be investing in or what not.
My point is if i want to invest my money and a small group of people's money, how can i do this in simplest and legal way.

Not sure if there are limits of how much money under management before licenses are needed or whatnot ..but yeah thats what i want to find out.

Jack FFR1846
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Re: can i start a private investment firm?

Post by Jack FFR1846 » Fri Oct 05, 2018 10:10 am

Start a hedge fund instead.

The owner of the house in the video and a number of "relatively expensive" cars like the Koenigsegg Agura XS, a couple Paganis and a few other lower end exotics....like a Ferrari La Ferrari (which you needed to have bought at least 6 Ferraris the previous year to be invited to buy one) is a hedge fund founder. Car guys enter.....

https://www.youtube.com/watch?v=UREwO8M ... e=youtu.be

There's the reason to start a hedge fund. I was at the event where all these cars were displayed along with a couple McLaren Sennas.....one with a $500k optioned translucent green carbon fiber body. No, it's not a half million dollar car.....the color option was half a million.
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uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 10:28 am

Jack FFR1846 wrote:
Fri Oct 05, 2018 10:10 am
Start a hedge fund instead.

The owner of the house in the video and a number of "relatively expensive" cars like the Koenigsegg Agura XS, a couple Paganis and a few other lower end exotics....like a Ferrari La Ferrari (which you needed to have bought at least 6 Ferraris the previous year to be invited to buy one) is a hedge fund founder. Car guys enter.....

https://www.youtube.com/watch?v=UREwO8M ... e=youtu.be

There's the reason to start a hedge fund. I was at the event where all these cars were displayed along with a couple McLaren Sennas.....one with a $500k optioned translucent green carbon fiber body. No, it's not a half million dollar car.....the color option was half a million.
yeah kind of what i want to do actually
i just said investment firm because its a big umbrella or whatever fits under that

how is hedge fund different? is it easier to get started? how to do it legally and file taxes like other hedge funds et cetera?

barnaclebob
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Re: can i start a private investment firm?

Post by barnaclebob » Fri Oct 05, 2018 10:36 am

Honestly you are barking up the wrong tree here. Nobody is giving you a straight answer because very few people here actually know how to do it and there is a 99.99% chance its a bad idea for you to do this anyway.

alex_686
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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 10:43 am

uberrebu wrote:
Fri Oct 05, 2018 10:28 am
how is hedge fund different? is it easier to get started? how to do it legally and file taxes like other hedge funds et cetera?
A hedge fund is relatively easy to start. The offering documents rarely run more than a 100 pages. Because they are unregistered they can only be offered to sophisticated investors who don't need the SEC or other regulatory agencies to provide oversight. The theory is that the big boys can take care of themselves. As such, only institutional investors and accredited investors can invest. So each of your friends and family members would have to have a net worth of more than 1 million dollars.

Here is a counter question - why would a investment club not meet your needs? Simpler than a hedge fund. There are plenty of canned setup documents. Simpler than a hedge fund, but there are limits on what it can do.
Last edited by alex_686 on Fri Oct 05, 2018 10:45 am, edited 1 time in total.

wrongfunds
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Re: can i start a private investment firm?

Post by wrongfunds » Fri Oct 05, 2018 10:45 am

I also want to start my own Merger & Acquisition Firm but I have no interest in getting admitted to Wharton for MBA program or anything like that stupid stuff. I know I can make more money that way than starting my own hedge fund.

Do I need to start a new topic (but it is too much work to start a new topic!). I will just use your topic to get few pointers if you don't mind?

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 10:52 am

alex_686 wrote:
Fri Oct 05, 2018 10:43 am
uberrebu wrote:
Fri Oct 05, 2018 10:28 am
how is hedge fund different? is it easier to get started? how to do it legally and file taxes like other hedge funds et cetera?
A hedge fund is relatively easy to start. The offering documents rarely run more than a 100 pages. Because they are unregistered they can only be offered to sophisticated investors who don't need the SEC or other regulatory agencies to provide oversight. The theory is that the big boys can take care of themselves. As such, only institutional investors and accredited investors can invest. So each of your friends and family members would have to have a net worth of more than 1 million dollars.

Here is a counter question - why would a investment club not meet your needs? Simpler than a hedge fund. There are plenty of canned setup documents. Simpler than a hedge fund, but there are limits on what it can do.
well what are needed for investment club?

alex_686
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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 11:05 am

uberrebu wrote:
Fri Oct 05, 2018 10:52 am
well what are needed for investment club?
Less than a 100 investors, less than 25 million in assets.

Here are 2 links as a place to start.
https://www.investopedia.com/terms/i/investmentclub.asp
https://www.sec.gov/reportspubs/investo ... ubhtm.html

Your local library should have a small stack of books on how to start one.

chevca
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Re: can i start a private investment firm?

Post by chevca » Fri Oct 05, 2018 11:20 am

uberrebu wrote:
Fri Oct 05, 2018 9:50 am
Exactly what am trying to do..it will be for like 5 friends maximum...so my money and like 5 other peoples money...at any given time will never exceed 10 peoples money. So i am looking for the simplest way to have this done legally. I just want to do this for the books especially when investing millions..the IRS can come sniffing any time and i want to be clean when they do come.
This is a horrible idea, IMO. Don't mix friendships and caring for their money. And, if you have to worry about how to keep the books clean.....

UpperNwGuy
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Re: can i start a private investment firm?

Post by UpperNwGuy » Fri Oct 05, 2018 11:27 am

I hope your friends and family members are wise enough not to entrust their money to a friend or family member to invest.

afan
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Re: can i start a private investment firm?

Post by afan » Fri Oct 05, 2018 11:51 am

The problem is not investing with friends or family members. Buffett's friends and family could quite reasonably buy BRK. The problem is investing with people who have no idea what they are doing.

I assume the first post is a joke. Who in the world would invest with someone who has not a clue of how to set up an investment firm, unwilling or unable to acquire the basic credentials and is not prepared to consult experts to start a legitimate business?

Who is checking legal requirements? Who is doing the accounting? What constraints, if any, are there on the investments the firm will make? How do you document the reviews you undertake to make sure you follow those commitments? Who handles compliance? Who does your annual audits? What kind of legal entity would this be?

Those friends and family can open accounts at major firms that know how to run their business. What is the appeal of someone with nothing to show for competence?

Can you imagine Abagail Johnson coming on here and saying "I want to start a new mutual fund, or maybe something else. How do I do that?"
We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either | --Swedroe | We assume that markets are efficient, that prices are right | --Fama

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cheese_breath
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Re: can i start a private investment firm?

Post by cheese_breath » Fri Oct 05, 2018 12:02 pm

wrongfunds wrote:
Fri Oct 05, 2018 10:45 am
I also want to start my own Merger & Acquisition Firm but I have no interest in getting admitted to Wharton for MBA program or anything like that stupid stuff.
I was thinking of becoming a brain surgeon but I have no interest in medical school, residency training or anything like that stupid stuff.
The surest way to know the future is when it becomes the past.

chevca
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Re: can i start a private investment firm?

Post by chevca » Fri Oct 05, 2018 12:08 pm

afan wrote:
Fri Oct 05, 2018 11:51 am
The problem is not investing with friends or family members. Buffett's friends and family could quite reasonably buy BRK. The problem is investing with people who have no idea what they are doing.
Folks making their own choice to invest their own money in a stock/company a friend owns is quite different than handing over your money to a friend to let that friend invest it how they see fit, IMO.

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HueyLD
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Re: can i start a private investment firm?

Post by HueyLD » Fri Oct 05, 2018 12:11 pm

Don’t feed a troll.

viz
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Re: can i start a private investment firm?

Post by viz » Fri Oct 05, 2018 12:18 pm

uberrebu wrote:
Fri Oct 05, 2018 1:43 am
I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks
you are talking about something like an investment club and you need to register with SEC
https://www.sec.gov/reportspubs/investo ... ubhtm.html

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 12:37 pm

cheese_breath wrote:
Fri Oct 05, 2018 12:02 pm
wrongfunds wrote:
Fri Oct 05, 2018 10:45 am
I also want to start my own Merger & Acquisition Firm but I have no interest in getting admitted to Wharton for MBA program or anything like that stupid stuff.
I was thinking of becoming a brain surgeon but I have no interest in medical school, residency training or anything like that stupid stuff.
so you saying to be able to make money or manage money you gotta have degress about it and have passed exams to prove the case and be friends of lots of sec certifications and licenses to prove to people?

I will tell you that you must either be joking or need to update your one way of thinking

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 12:41 pm

afan wrote:
Fri Oct 05, 2018 11:51 am
The problem is not investing with friends or family members. Buffett's friends and family could quite reasonably buy BRK. The problem is investing with people who have no idea what they are doing.

I assume the first post is a joke. Who in the world would invest with someone who has not a clue of how to set up an investment firm, unwilling or unable to acquire the basic credentials and is not prepared to consult experts to start a legitimate business?

Who is checking legal requirements? Who is doing the accounting? What constraints, if any, are there on the investments the firm will make? How do you document the reviews you undertake to make sure you follow those commitments? Who handles compliance? Who does your annual audits? What kind of legal entity would this be?

Those friends and family can open accounts at major firms that know how to run their business. What is the appeal of someone with nothing to show for competence?

Can you imagine Abagail Johnson coming on here and saying "I want to start a new mutual fund, or maybe something else. How do I do that?"
Honestly i know people that think like you and to be honest am not here to convince you because people like you can not be convinced.
Investing is not rocket science and anyone who understands money and mechanics of money coupled on a national and global scale and see between the lines of the corrupt economic vehicles running the several countries of the world.

You think too traditional. I posted the topic to get what i can get from bogleheads..as you can see i just joined and wanted to try out the forum if its an active forum which i have seen it is. Also just because i posted it here to see what i get from people doesnt mean that is where it started or where it will end. I mean logic folks..logic.

uberrebu
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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 12:44 pm

alex_686 wrote:
Fri Oct 05, 2018 11:05 am
uberrebu wrote:
Fri Oct 05, 2018 10:52 am
well what are needed for investment club?
Less than a 100 investors, less than 25 million in assets.

Here are 2 links as a place to start.
https://www.investopedia.com/terms/i/investmentclub.asp
https://www.sec.gov/reportspubs/investo ... ubhtm.html

Your local library should have a small stack of books on how to start one.
the most helpful guy here..thanks a lot @alex_686
i have not lost hope in humanity yet because of you
people just like to condemn and ridicule people with a plan that is unorthodox...they are used to the major propaganda and anyone that is so small is easily dismissed and never given a chance..it sucks there are many people like that in society and rightfully so..the propaganda machines are doing their complex work great for several centuries now and going

but people like you can help negate some of these ways of thinking
never heard of the investment club before until you brought it up
will look into it in more details

alex_686
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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 1:14 pm

uberrebu wrote:
Fri Oct 05, 2018 12:44 pm
but people like you can help negate some of these ways of thinking
never heard of the investment club before until you brought it up
will look into it in more details
You may be giving me too much credit. I think you threw a lot of people off their stride by using "firm" and "adviser" which implies a fairly high level of professionalism, regulation, and licensing.

Investment clubs had their glory days before low cost index fund investing became popular. Before index funds this was a cost effect way of average investors creating a low cost diversified portfolio. Passive investing more or less trumps investment clubs in most ways. There is a saying that if you want to lose a friend, lend him some money. I have seen too many friendships and families break apart over money.

So call me skeptical, but skeptical is not an absolute no. There are similar vehicles out there for investing in non-liquid assets, such as real estate. Check your library. You might have some special skills or insight in the market. I know quite a few guys who thought they had insight into the market, and didn't. But I will leave that to you.

One of the great advantages of a investment club is the social aspect. Most investment mistakes are behavioral and cognitive. Irrational optimism, panic during a panic, etc. Having 5 people at a table collectively making decisions tends to cool everything off.

In any event, best of luck.

daheld
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Re: can i start a private investment firm?

Post by daheld » Fri Oct 05, 2018 1:28 pm

Mr. uberreu,

I am convinced and would like you to manage my money. Please send me your bank routing and account numbers, full legal name, Social Security Number, and home mailing address. I will wire you all the money in my emergency fund.

Regards,

daheld, barrister, Esq.

chevca
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Re: can i start a private investment firm?

Post by chevca » Fri Oct 05, 2018 1:41 pm

uberrebu wrote:
Fri Oct 05, 2018 12:41 pm
Investing is not rocket science and anyone who understands money and mechanics of money coupled on a national and global scale and see between the lines of the corrupt economic vehicles running the several countries of the world.

I mean logic folks..logic.
That's kinda funny. I mean you're obviously qualified with your knowledge of money.

I assume you feel you know more than the folks with all the degrees, licenses, and investing and the market is their profession? And, they don't know the market or what it will do. I mean, anyone can do it, right?

All the posts you have found helpful in this one have mainly been links from searching the internet. Did you do any of that before posting here?

PVW
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Re: can i start a private investment firm?

Post by PVW » Fri Oct 05, 2018 1:44 pm

uberrebu wrote:
Fri Oct 05, 2018 10:28 am
how is hedge fund different? is it easier to get started? how to do it legally and file taxes like other hedge funds et cetera?
George Soros attended Eton College when John Major was the headmaster. Soros came from an uneducated low class, but was a savant with money and began offering his services around campus. When Soros refused to help hide Major's mistress' expenditures, he expelled Soros for running an unregistered investment club.

The next day Soros started the Quantum fund that later shorted the pound sterling and broke the Bank of England when John Major became Prime Minister. The financial panic forced England to merge with Scotland and Wales and that's why they call Soros the father of Great Britain.

True story. It can be done. Start your own hedge fund. You just need the proper motivation.

wrongfunds
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Re: can i start a private investment firm?

Post by wrongfunds » Fri Oct 05, 2018 2:06 pm

England to merge with Scotland and Wales
aaaarrrrrrrggggggggggg; I actually googled this :-(

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David Jay
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Re: can i start a private investment firm?

Post by David Jay » Fri Oct 05, 2018 3:39 pm

So Uber-rebu (yes, I saw what you did there):

To summarize, if you do not want to jump through all the hoops of certification your choices are:

1. Start a hedge fund. You can only offer your services to accredited investors.

2. Start an investment club. You cannot be paid for your services.

That's about it. Otherwise you need to take some silly exams in order to be paid for your investment advice in the United States.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Re: can i start a private investment firm?

Post by uberrebu » Fri Oct 05, 2018 6:32 pm

David Jay wrote:
Fri Oct 05, 2018 3:39 pm
So Uber-rebu (yes, I saw what you did there):

To summarize, if you do not want to jump through all the hoops of certification your choices are:

1. Start a hedge fund. You can only offer your services to accredited investors.

2. Start an investment club. You cannot be paid for your services.

That's about it. Otherwise you need to take some silly exams in order to be paid for your investment advice in the United States.
currently looking at option 2
thanks a lot for your input

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Re: can i start a private investment firm?

Post by alex_686 » Fri Oct 05, 2018 6:47 pm

I more thing about investment clubs.

The heights of these things were back in the 50s to 80s. IRAs had not been invented yet, so the fact that were not tax efficient as an IRA was not a big deal. (Investment club assets must be held in taxable.) A group would get together each month at a supper club or a coffee klach. They would throw in a few dollars. They would talk about stocks and investing. They would talk about life. Sorta of like a pre-internet version of Bogleheads. Except maybe without all the snark.

One of the best things about a investment club is the positive peer pressure involved. Save steady, invest for the long term, don't panic. These are core bits of Boglehead philosophy. You are not going to become mega-wealthy, but it is a path upwards.

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unclescrooge
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Re: can i start a private investment firm?

Post by unclescrooge » Fri Oct 05, 2018 6:48 pm

TomatoTomahto wrote:
Fri Oct 05, 2018 9:59 am
uberrebu wrote:
Fri Oct 05, 2018 9:50 am
alex_686 wrote:
Fri Oct 05, 2018 9:36 am
Welcome to the forum.

What do you mean by "start a private investment firm"?

Some forms require very little in the way of licenses or registration. You could be a independent consultant, writing reports for hire. What is your specialty? A "financial coach" does not require anything - then again it is a pretty meaningless title. I know a guy who ran a mutual fund out of his spare bedroom. Note: not public, for family only, and this was 30 years ago so regulations may have drifted since the.

Others require a fair amount of both. These kick in if you you plan on soliciting clients who are not institutional investors or accredited investors.
Exactly what am trying to do..it will be for like 5 friends maximum...so my money and like 5 other peoples money...at any given time will never exceed 10 peoples money. So i am looking for the simplest way to have this done legally. I just want to do this for the books especially when investing millions..the IRS can come sniffing any time and i want to be clean when they do come.
If I had a friend starting a private investment firm who was too lazy to pass a few Series Exams, I wouldn’t give him any money to manage. Truth be told, I probably wouldn’t even if he passed.

Fwiw, wife and son have passed various FINRA exams. Just requires some studying. It’s not rocket science.
I think the requirements to cut hair are more stringent :mrgreen: :mrgreen:

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unclescrooge
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Re: can i start a private investment firm?

Post by unclescrooge » Fri Oct 05, 2018 6:57 pm

uberrebu wrote:
Fri Oct 05, 2018 1:43 am
I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks
Just start doing it.

I don't think you need to do anything until you have more than 5 clients.

See http://www.nasaa.org/industry-resources ... ew-jersey/

Pay a securities lawyer for an hour of his time to
comfirm.

stan1
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Re: can i start a private investment firm?

Post by stan1 » Fri Oct 05, 2018 7:00 pm

You may find this link useful:
How to Run a Successful Ponzi Scheme

Plenty of people who run Ponzi schemes have started with their own family and closest friends -- and jacked them up in the process.

Seriously, its why investment managers are regulated. Taking your post at face value you seem confident. Better to make yourself wealthy and then give gifts to your family and friends rather than manage their money for them.

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cheese_breath
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Re: can i start a private investment firm?

Post by cheese_breath » Fri Oct 05, 2018 7:03 pm

uberrebu wrote:
Fri Oct 05, 2018 12:41 pm
...anyone who understands money and mechanics of money coupled on a national and global scale and see between the lines of the corrupt economic vehicles running the several countries of the world....
I take it back. You don't need the stupid courses. You're already talking like an expert salesman...oops, I mean financial advisor.
The surest way to know the future is when it becomes the past.

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yangtui
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Re: can i start a private investment firm?

Post by yangtui » Fri Oct 05, 2018 7:26 pm

uberrebu wrote:
Fri Oct 05, 2018 1:43 am
I am not a financial analyst but been thinking of starting a private investment firm where i manage very limited number of people's funds.
Is it possible to do this legally?

Thanks
this type of question makes me think we are close to a market downturn.

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Re: can i start a private investment firm?

Post by LadyGeek » Fri Oct 05, 2018 7:34 pm

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