Before You Startup Your Own Investment Company, Read This!

investment advisor

Of course, for those that start up their own investment company, the benefits are multitude, not least that they can invest large sums with little personal risk (aside from their business reputation). Yet, also can collect a handsome fee or percentage if things do go well. However, before you hop online to claim a suitable web address for your investment business, it’s essential to have a clear idea of what you are getting into—a topic that you can read about in detail in our post below.



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Before you begin

Before you start your investment company journey, you need to consider both your motivations and experience in the field carefully. When it comes to motivation, just about everyone that starts up, a business has the desire to make money. 


However, along with this drive, you will need to be supremely motivated to help other archives their financial goal through investing as well. What that means is running an investment company is not only about monitoring the market and making buying and selling decisions. It’s also about being able to listen to and empathise with each of your customers, understanding what their end goals are, and what risks they are prepared to take to achieve them. 


More than in any other walk of life, in the investment business, your experience matters. After all, if someone is going to hand you thousands, or more of their precious savings, they are going to want to see a reliable and successful track record. That is not to say that every single investment you make needs to be profitable, because anyone that knows anything about the stock market knows that this is not how things are in the world. Still, evidence of successfully adding value to clients’ portfolios (or you own, to begin with) is the least you will need to convince them to work with you. 



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Consider the market 

Next, before you begin preparing to set up your investment company, it’s essential to consider the market. It’s not only critical to factors in whether the market is bear or bull, and if a crash is coming soon, but also the specific market around investment advice. 


After all, things have radically changed and also democratised over the last few years. Something that means many people prefer to use Robo advisors or investment apps and make their own decisions when it comes to where to place their funds. In essence, before you begin, you need to establish that there is indeed a market for what you are offering if you want to succeed over the long term. 


Plan for success 

If you have considered the factors above and find that you still wish to go ahead with starting an investment company, then the first step you will need to complete is to create a thorough business plan. 


Details are critical here because you will need clear guidance concerning whom your business should make its target demographic, and how you will reach them. Indeed, as we have touched upon above, convincing people to become your customers rather than DYing their investments will be one of the biggest challenges to your success. With that in mind, you must have a detailed marketing plan. 


Also don’t forget that short, long and medium-term goals are also important, not least because they act as exact steps to ultimate success. 


Additionally, at your business’s inception, it can be hugely beneficial to outline your ethos. That is the values that will guide your business, something that will both help inspire confidence in customers, and that can be referred to when you come across challenges in the day to day running of your company. 


Name and branding 

Effectively naming and branding your investment business is another crucial aspect of success. Unfortunately, many people think that such things are too ‘airy-fairy’ for a company in the financial sector. However, if you have such an attitude, you will be missing out on a precious way to inspire confidence in potential clients. 


After all, the name and colors you use in your branding can make a massive difference in how the public perceives your business. For example, financial companies often stick to more serious colors such as greens and blues, which inspire reliability and confidence. Of course, that doesn’t mean that you have to, you can break the mold and go for something striking in yellow or orange, but it’s all about how you do this. Something that understanding the usual way things are done can help you to achieve.  


Also, remember to check online to see if anyone else is already using the name you want for your investment business. It’s also a smart idea to run a few searches to check that nothing negative or silly comes up. After all, there isn’t much point in carefully crafting your branding, only to have customers think of something foolish or concerning when they hear your name.  


Recruit employees and find a premises

You may be banking on keeping your overhead low when you first begin, something you can do by working from home and running a single person operation. However, to maximise your chances of success, and inspire trust in your clients having an official IRL premise and additional employees can go a long way. 


When it comes to your employees, it’s essential to consider a range of factors including experience, qualifications, references and their track record to date. You will even need to consider whether full time versus part time employees would be better for your business model. The latter being something that can have a significant impact on the practicalities of running a company on issues such as scheduling and taxes. 


Your premise is also a vastly important decision, not least because having a real-life touchpoint where you can interact with your clients can help you land much bigger accounts. After all, if you expect your clients to hand out tens of thousands of dollars, an in-person meeting beforehand is the least you can do. 



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Additionally, making sure that your office looks the part and is located in the right part of town is vital as well. To that end, professional interior decoration, and leasing an office in the financial or business district is essential to your long term success. 


Legal issues 

When dealing with vast sums of money and investments, there are several legal issues and regulations you will need to bear in mind. These will, of course, differ depending on the location of your investment business, but you can find a guide on the US regs below. 


First off, locate and get in touch with the office of the secretary of state for your state. Then request an application for incorporation. 


To submit your application, you will need to write articles of incorporation, and the additional paperwork required. You will also need to pay your state’s fee for incorporation. 


Next, you will need to register your investment business with several organisations. All investment businesses need to register on the state and federal level. 


On the state level, it is wise to use the FINRA Entitlement Program. While on the federal level, you will need to register with the Securities and Exchange Commission (SEC). You will also need to register with the IARD or the Investment Advisor Registration Depository – an electronic filing system designed explicitly for investment advisors. 


Then you will be well on your way to running a successful investment business. 

This is a contributed post.


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