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Advice for tiny UK "HF" please!
- Thread starter sj8070
- Start date
Quote from rtiger29:
So what is the point of managed accounts if you can not charge anything. As far as i know, you are allowed to manage up to 15 people (friends/family) without needing to be registered. That was my understanding anyways.
you cant charge perf fees for sure in CA. Maybe other states allow charging perf fees without RIA registration.
gmst said "In US also, you can't charge anything from your investors unless you have registered as an RIA. I am sure this applies at least for CA."
US RIA registration is simple and cheap, and the exam is easy. RIA registration is only necessary if you intend to hold yourself out to the public as an investment advisor. If you have a few private clients, you merely only need report to your state regulator.
In California, as an exempt reporting advisor, you can only charge performance fees to a private fund where all other investors are accredited investors.
US RIA registration is simple and cheap, and the exam is easy. RIA registration is only necessary if you intend to hold yourself out to the public as an investment advisor. If you have a few private clients, you merely only need report to your state regulator.
In California, as an exempt reporting advisor, you can only charge performance fees to a private fund where all other investors are accredited investors.
Quote from just21:
Use interactivebrokers friends and family account. Upto 15 sub accounts, trades distributed evenly from the master account, no need to register with fsa or accept money as all stay in investor name.
but you can't impose any lock up periods can you? they can easily take their cash out with click of a button for whatver reason (with the slightest of drawdowns) and you're done, correct me if I'm wrong?
there are also umberella funds which charge less - but still around £15-20k a year plus some £1k a month for compliance.
£40k is simply too small for a fund. you may consider a normal ltd formation and issue shares to investors who would then be your 'clients'.
On the other hand, Virgin Islands offer the cheapest fund formation I know of - as low as $8k or less.. but then only those who really trust you will be given their cash if you're offshore.
Full FSA fund only makes sense if you have minimum £10m+ AUM. or otherwise have equity shares in the fund to investors who are willing to take the regulations costs etc.
you say performance has been good - but how long has the strategy been running for? to begin with I doubt anyone who doesn't know you well personally and trusts you to give you their cash (unless you've got a 3-4 year track record). so in this case whether you have FSA or not wouldn't make a dime difference.
I recommend you register a simple ltd (costs £10) and issue shares accordingly to the 'clients' and operate as a prop firm - then once you have an full audited history and more capital (in the millions) go for a fund structure.
Hmm maybe u would like to take a look at my other post..
http://www.elitetrader.com/vb/showthread.php?s=&threadid=246686
Why charge 40k ? How much do u think u can make ? its not even worth it.
On this day even if I have 250k, i wouldnt even think abt charging, if making money thru mnaaging is ur goal.
My goal is to make sure this 250k doesnt lose money for a full year, with ups and down not a bull run.
Eventually I'll start charging if I hit 1 mil, but 2% of a mil is only like $20k. its more of covered ur daily electric bills, travelling and some time u spend looking on Bloomberg.
If I were doing for family n friends, i do it out of goodwill, saving them that 1.5%-2% cost wgiven to mutual funds for advises. Of course this soliciting funds requires a proper Advisory license, even if its private arrangement.
http://www.elitetrader.com/vb/showthread.php?s=&threadid=246686
Why charge 40k ? How much do u think u can make ? its not even worth it.
On this day even if I have 250k, i wouldnt even think abt charging, if making money thru mnaaging is ur goal.
My goal is to make sure this 250k doesnt lose money for a full year, with ups and down not a bull run.
Eventually I'll start charging if I hit 1 mil, but 2% of a mil is only like $20k. its more of covered ur daily electric bills, travelling and some time u spend looking on Bloomberg.
If I were doing for family n friends, i do it out of goodwill, saving them that 1.5%-2% cost wgiven to mutual funds for advises. Of course this soliciting funds requires a proper Advisory license, even if its private arrangement.
Quote from clerk:
You can't take compensation for this in the UK without FSA authorization. Directly, or indirectly. Sorry.
In the UK, there is a barrier for entry into the HF world. You will need enough AUM and your own capital reserves for the FSA to give your business plan a thumbs up.
There is no FSA-light regime like the SEC's ERA regime in the United States.
If there is enough money at stake, look at working at a firm who will supervise you and give you a small cut of the fees. Or move.
thanks - just re-read this
do you have any firms in mind? (able to 'supervise')
What is the easiest state in US in terms of state-level regulation to run business?
Quote from clerk:
gmst said "In US also, you can't charge anything from your investors unless you have registered as an RIA. I am sure this applies at least for CA."
US RIA registration is simple and cheap, and the exam is easy. RIA registration is only necessary if you intend to hold yourself out to the public as an investment advisor. If you have a few private clients, you merely only need report to your state regulator.
In California, as an exempt reporting advisor, you can only charge performance fees to a private fund where all other investors are accredited investors.