Without relevant experience working for a money manager, this will be very difficult. Why not get a job in the field first? This will also allow you to make some client contacts. Managing someone else's money is very different from managing your own but good luck.

 

Don't you need the CFA in BC to manage money? Not selling mutual funds but investing on behalf of others.

 

I'm sure others who know more details can chime in, but I don't think your plan is very realistic. I could be wrong, but I don't think it's that easy to start an investment fund.

Just an idea, but you might be better off going to an established investment company and pitching your team to them. That way, they can provide the infrastructure you'll need (investment compliance, legal) and you two will run/sell the fund. You might have to prove you have some investors lined up already.

 

Not really looking for advice, just wanted to see if anyone knew the logistics. Logistics, logistics, logistics! War, business, relationships.. it's all about logistics. I don't want to work under anyone or any company, him and I have done that already. I'm not ready to go all-in on this yet, but if and when I do I want to be prepared.

1. Register a business/corporation name
2. Open up the necessary bank/brokerage accounts
3. ???
4. Profit!

 

Have you checked out the Investment Industry Regulatory Organization of Canada (IIROC) webpage?

http://www.iiroc.ca/industry/registrationmembership/Pages/default.aspx

 

Why not start an "investment club" rather than an investment company? I believe the rules for investment clubs are less onerous than starting an actual fund.

 

what's an investment club? or established investment clubs?

 

Hmmm. Do people really not know this? OK. The licenses to manage OPM (other peoples' money) are all held by dealers in Canada. Thus, you need a dealer to sponsor your license, and you will need to do a compliance / conduct and practices course (and pass it) before you can obtain a license (held by a dealer), and then complete what is essentially a probationary period.

Now, there are lots of different ways to get a dealer to hold your license, depending (in part) on what kind of license you want to hold. And there are lots of different "models" for the relationship between the dealer and the advisor -- independent (and varying definitions of what that means), employee, MFDA, IIROC.

If you want to do discretionary money management that is another whole different ball game and layer of licensing and documented experience in the industry. Specifically, you need the CIM (Chartered Investment Manager) license.

None of these things have anything to do with the CFA, CFP or any of the multitude of other optional designations advisors can get. If you want to manage money on behalf of other people, you need a stock and bond license (which also allows you to trade in MFs), or a MF license (which restricts you to MFs), and you need a dealer to sponsor and "hold" your license, and you need to meet the dealer's internal requirements for compliance, conduct and practice. That is it.

 

What if you structure it as a joint venture/partnership, and only solicit funds from accredited investors? Would you need any of the above qualifications?

 

moneyGal-please-advise-me-i'm-planning-to-write-a-COMIC-BOOK-about-investing-i'll-make-a-million-bucks-then-the-globe-&-mail-will-air-a-hideous-defective-video-about-ME-i'll-look-like-a-weeping-joke-but-never-mind-cuz-i'll-be-making-a-million-bucks-the-whole-time-please-moneyGAL-do-you-think-i-should-INCORPORATE-thank-you-so-much

 

Ugh. I hope this is not actually a comment about me. The Globe aired a video I shot (last March) last Monday - I looked like a zombie in it.:upset:

 

HP. Yes we are getting some pretty tedious posts from relative newcomers(not Argo) asking technical questions on matters that could be easily reseached by them other places. I must say there isn't much of interest for me in these type of questions or the responses that do pop up. MG has way more patience than I.

 

argo is a surprise to me. He's not going to get any clients unless he goes in for the proper training, which is (probably deservedly) long-drawn-out, painstaking, challenging.

the strange fact in this development is that, with the right licenses & experience, argo could be a huge success.

but casually taking other people's money & tossing it into an account at interactive brokers *not.*

 

HP: Well put. The OP was a little surprising, almost naive.

 

But...getting an IIROC or IFIC course under your belt and signing up with IB *is* one way to do it. It isn't a naive question, I don't think; look at the range of suggestions provided in reponse: get a CFA, just set up a corporation and open an account, start an investment club, etc. Not that these are bad suggestions per se -- but none of those things will allow you to handle even one cent of another person's money.

I responded not because I have infinite wells of patience biggrin but because I was surprised at how misunderstood this is. What does it take to OPM? A license to do so. How do you get one of those licenses? You must be sponsored by a dealer and meet their rules and basic industry qualifications.

 

But...getting an IIROC or IFIC course under your belt and signing up with IB *is* one way to do it. It isn't a naive question, I don't think; look at the range of suggestions provided in reponse: get a CFA, just set up a corporation and open an account, start an investment club, etc. Not that these are bad suggestions per se -- but none of those things will allow you to handle even one cent of another person's money.

I responded not because I have infinite wells of patience biggrin but because I was surprised at how misunderstood this is. .

......or because instead of saying "you gotta be kidding" the kind members actually offered alternatives that have some merit in his situation. ;-), ie majority of successful money managers who run their own shops have started as employees of established firms and worked their way up.

 

MG I don't think the question of "how to do it " was naive but rather the apparent ease to be successful managing OPM implied in the OP. Furthermore if one was seriously considering this avenue, surely there are better and more reliable sources of how to get started. Not that you aren't a reliable source of course.

 

OK, I answered in my typical "style" (I answered the question in front of me and that's it) and didn't venture outside that. Sometimes I think I should have been a compliance officer; I apparently think like one.

 

I personally would not be comfortable to put my million dollars in any company having less than a billion and have some solid performance behind it.You may very well complete all the steps but to me that will be your biggest hurdle to get people trusting you with their money.

 

Yes, you have to start somewhere though. Money managers with high net-worth clients tend to go pretty conservative because they want to keep the client. A lot of it is sales-based, which my friend excels at. You wonder why investors always fall for ponzi schemes and that's a part of it.

 

argo the american in you is blinding you to the reality.

imho few will give an inexperienced youth without appropriate qualifications or experience their $$ to manage.

if i were seeking a portfolio manager, there are a couple whom i like & respect very much. They have CFAs. They also have CAs plus they have 25 years in the investment biz with 20 years spent directly in discretionary management. They, too, are charging 1%, the same as what you fantasize for yourself, but theirs is top-of-the-line service.

do you want to get where they are ? there's a whole heap of work for you to do first.

speaking as a person who has praised & supported you in the past on many occasions, i'm somewhat taken aback to see how you are flaunting yourself now. I'm almost tempted to ask haroldCrump's question: who are you & what have you done with that sweet, witty, brainy Argonaut we used to know & like so much.

 

Frankly, I'm not soliciting investors here or anywhere right now. That was not the point of this thread. I wanted to know the logistics behind setting up an investment company, and this being an investment forum I thought it relevant. And the best part is that there's no lawyer or consultation fees. People can choose to help me or not, as I do on other threads.

Based on what I've seen from stockpicking by the big fund managers on BNN, I'm not impressed at all by years of experience. You're either good, bad, or mediocre. And like it or not, a lot of the task in getting clients is sales and networking ability. I never claimed to be humble, either. Anyway like I've said a number of times, attracting clients and the ability to manage money was not an issue in this thread.

EDIT @dmoney: Thanks for the post, I agree with you on a number of points. Perhaps an answer is to invest using our own capital and possibly a bit of borrowed money initially to establish a track record for the company. This is not so much because I'm worried about attracting clients, but moreso because I want to postpone the great time expense needed.

 

... attracting clients and the ability to manage money was not an issue in this thread.

attracting clients and the ability to manage money are the *only* issues in this thread.

all this bumph about logistics is pixie dust tossed up to obscure the fact that there will be no clients because there is not yet any adequate track record in managing 3rd party money.

two-and-a-half amateur years are not a track record. Insulting established money managers on 2nd rate TV programs is not a track record.

it's tragic, i know, but a wannabe does have to work *in* the industry for a number of years to earn his schmeck. It's even better when he's a good team player who doesn't brag, boast or antagonize potential future clients. At 25, the wannabe should not be sneering that he's been there, done that, doan wanna work for Da Man no mo'.

 

I really don't think the people on here are trying to be debbie downers, we're just trying to help.

This forum isn't a bad place to start, but the reality is that most investors don't have a clue about the mechanics/qualifications behind what you are asking. I work in the industry and I really don't know either.

You might want to contact some regulatory bodies and ask them or read their websites to try to figure out what's going on.

One thing you could start doing, if you aren't already is establishing performance numbers. You need to have meticulous records (ie all trading activity etc) and use an established rate of return method.

 

Well Argo, if nobody ever tried to succeed at what they want to do, I wouldn't have any companies to invest in. What you are trying to do is what I want to do with my life. I love investing, why not get paid to do it? I'm not likely going to start my own fund, maybe when I'm older and successful enough to put my name on a firm, but I don't see any problem with trying. Worst that will happen is you fail, right?

I try my best to do whatever people tell me I cannot. Which is most everything really. My parent are very anti risk. Which is pretty risky to me... they pretty much float along and trade each hour for a capped sum of money and then make that stretch as far as they can. Opportunities don't exist to them, because they choose not to acknowledge them. They might lose money, so they choose to continue having none.

My coworkers all think I'm insane because I invest in companies instead of real estate. I'm all for real estate if I can justify it. But I don't understand why someone would buy into a market that is essentially in bubble territory, as far as I can figure. I can't get a property cash flow positive, I'd have to leverage my self to my eyeballs and I would literally be trapped with this gigantic, illiquid asset as soon at the party is over.

I say go for it if it's what you want to do. I'd rather try and fail then sit there wondering if I could have succeeded.

 

@Four Pillars: I love keeping meticulous records.. sometimes I open Excel for no particular reason but to look at numbers and pie charts. I had 31% last year, and sitting on 16.6% this year. I realize these numbers are harder to achieve the more capital you have, but the same principles apply. 2010 was a small sample size, but I did fine then too. I seem to do better in the bear (2011) than the bull though (2010, 2012).

@jcgd: Good post, you see where I'm coming from then. How old are you? Nothing is too young, really. I'm 25. Good luck to you.

 

there has to be something going around these days.

jcgd only an hour ago was the 5th in as many weeks. "I love investing, why not get paid to do it?" he says, meanwhile admitting he has zero investment experience.

why not indeed. If we're hiring wealth managers for love alone, why not hire JustAGuy. At least with Guy, bankruptcy will be swift & merciful.

here's No. 4 in wannabe portfolio management. This poster hasn't even started an undergraduate major in finance yet, but somehow he believes that mr & mrs JQ Public are panting to hand their life savings over to him.

http://canadianmoneyforum.com/showt...com/showthread.php/12833-Managing-people-s-money?p=144892&viewfull=1#post144892

 

Years of investing experience is something, but it's not everything. Case in point: All of the doobs on BNN. How on earth Brian Acker has clients I'll never know. Him and his magical "model price", and his average performance of about -30% on past picks. For me, investing the money will be the easy part, that is my skillset. My friend has the sales and networking skillset. I suspect I'll be the one to manage the legality and the hoop-jumping, so that's what I need to learn.

 

But Humble, why is it such a big deal to you that we have directions we want to head with our lives and want to learn the path to get there? This is a forum for investors, and who said we have to be strickly DIY to be here? Does it not seem likely that interested kids like me come to an investing forum to learn, talk, discover about something we enjoy and are hoping to turn into a career? Not everyone necessarily wants to be picking stocks for a multi billion dollar firm. Maybe some of us just want to be advisors workin' down the street at Scotiabank.

Argo didn't say he wanted to do this tomorrow. I didn't say I want to do it tomorrow. Skyfall didn't say they want to do it tomorrow. So maybe we have 32 years to find out if we will ever even get there, but we need to start now and know what the hypothetical process would be.

I feel it's completely within my right to have direction, goals and dreams. Same goes for everyone else.

Sorry to be off topic.

 

to me this message seems totally on topic.

but it isn't what the OP is saying.

OP says he wants to leap to the summit of discretionary portfolio management - other people's money handed over with fiduciary strings attached that he's not willing to understand - without any training or preparation.

he doesn't want to work for a multi-billion dollar firm because, at 25, he's already too good for that gig. No, he just wants people to give him, oh, about 10 or 20 million $$ so he can play with it.

it's like a hospital orderly suddenly says he wants to do neurosurgery without going to medical school.

returning once again to your hopes & plans, they seem very reasonable. It's clear that you intend a steady learning pace. There's no megalomania, everything looks orderly & logical. I sincerely hope you will have a happy learning experience & i wish you the greatest good fortune.

 

If anyone has the qualifications for this question it would be archer-maybe he will tell you how he went about it....He would be the expert around here.