Trader with side business of managing seperate accounts

[Sagacity1]

Hi, I am new to this board.

Question: I have been thinking of setting up a side business of giving financial advice (and managing money) for other individuals? I know about firms that offer the technology such as IB for trading but I have some more questions that they could not provide advice to.

1. If giving advice to others, would it be best for me to set up an LLC for myself (to help seperate liabilities with myself from the firm etc.)?

2. If I want this to grow and have as a possible career going forward, should the LLC get registered now and me take the Series 65? Wouldn't this help with marketing my services so I could expand? After all, so many financial advisory firms out there seem awful to me with terrible generic advice. I feel I can fill a better need than they can.

These are just some questions but any other input from the readers on here would me much appreciated which may lead to more questions than answers.

 

[Sagacity1]

Or is it just best in terms of cost and time to personally give advice by serving as an independent contractor and doing this off the books?

I would not think of establishing anything from related forum as it does not make sense to form llc just for self trading purposes.

 

[sjfan]

So ... you are planning on starting a business on giving financial advise, but don't understand basic corporate structures or the regulatory regime of your area of business.

Quote from Sagacity1:

Hi, I am new to this board.

Question: I have been thinking of setting up a side business of giving financial advice (and managing money) for other individuals? I know about firms that offer the technology such as IB for trading but I have some more questions that they could not provide advice to.

1. If giving advice to others, would it be best for me to set up an LLC for myself (to help seperate liabilities with myself from the firm etc.)?

2. If I want this to grow and have as a possible career going forward, should the LLC get registered now and me take the Series 65? Wouldn't this help with marketing my services so I could expand? After all, so many financial advisory firms out there seem awful to me with terrible generic advice. I feel I can fill a better need than they can.

These are just some questions but any other input from the readers on here would me much appreciated which may lead to more questions than answers.

 

[Sagacity1]

Actually yes.

Instead of "financial advice", I think it would have been clearer if I used the term "market advice". That is what my familiarity and focus and advice is on.

I am not familiar nor is my expertise with business law and corporate structures. After all, that is what the lawyers and tax accountants are for.

Sorry for the ambiguity.

 

[sjfan]

Word of advice - financial advice to the general public is a heavily regulated area; both federal and state governments will have quite a say about it. hopefully you are more familiar with these regulations than you are with general business law.

Quote from Sagacity1:

Actually yes.

Instead of "financial advice", I think it would have been clearer if I used the term "market advice". That is what my familiarity and focus and advice is on.

I am not familiar nor is my expertise with business law and corporate structures. After all, that is what the lawyers and tax accountants are for.

Sorry for the ambiguity.

 

[Sagacity1]

Quote from sjfan:

Word of advice - financial advice to the general public is a heavily regulated area; both federal and state governments will have quite a say about it. hopefully you are more familiar with these regulations than you are with general business law.

Okay. So does this mean I need to register with an agency like the SEC or something? What if I am only giving stock market advice and managing trading accounts for a few clients at first?

 

[sjfan]

... so I'm guessing the answer to whether you know the regulatory framework of giving financial advice as a profession is, no.

I'm not a lawyer, so I'm going to not give you advice on your legal responsibilities. Speaking of which, it seems highly irresponsible for you to give "market" advice to anyone else. It's fairly obvious that you are not qualified to do so. By qualified, I don't even mean whether you have skills pertaining to the "market". You clearly will be not able to deal with issues like suitability, risk objectives, etc... because you probably don't even know that you are responsible for knowing and applying such things on behalf of the people you are advising.

Quote from Sagacity1:

Quote from sjfan:

Word of advice - financial advice to the general public is a heavily regulated area; both federal and state governments will have quite a say about it. hopefully you are more familiar with these regulations than you are with general business law.

Okay. So does this mean I need to register with an agency like the SEC or something? What if I am only giving stock market advice and managing trading accounts for a few clients at first?

 

[joemiami]

Sagacity, Im curious...

What qualifications (schooling and/or market experience) do you have that would be of value to a potential client?

I presently manage 9 accts for other ppl for S&P contract trading(big and small contract). Been doing it for a lil over 2 yrs. But giving advice is something i have neither the time or inclination to partake in.

You either trade for other ppl or just give advice..usually not both.

So again...your qualifications are?..................

 

[Sagacity1]

Quote from sjfan:

... so I'm guessing the answer to whether you know the regulatory framework of giving financial advice as a profession is, no.

I'm not a lawyer, so I'm going to not give you advice on your legal responsibilities. Speaking of which, it seems highly irresponsible for you to give "market" advice to anyone else. It's fairly obvious that you are not qualified to do so. By qualified, I don't even mean whether you have skills pertaining to the "market". You clearly will be not able to deal with issues like suitability, risk objectives, etc... because you probably don't even know that you are responsible for knowing and applying such things on behalf of the people you are advising.

How the heck do you know if I am not qualified and/or have the experience to do so? How is stock market experience and knowing about investments the same as knowing about regulations for them??? That is the whole point why I am asking that which with I am not familiar, duh!!!!!!!!!

Moreover, you have no idea about my specific prior experience in the stock market anyway. And I will not go into any of that here. You assume jack sht which does not make any sense or have anything to do with the original inquiry of the thread. The only reason I am interested in asking it on this board is to get an idea first before paying for possibly unnecessary advice. But you are right on one account. You are no lawyer. That is easy to observe since you seem to have everything figured out about me without much evidence. I know I may need a lawyer but I think you may need a psychiatrist.

 

[sjfan]

Oops. sorry. You are clearly qualified to manage other people's money.

Quote from Sagacity1:

How the heck do you know if I am not qualified and/or have the experience to do so? How is stock market experience and knowing about investments the same as knowing about regulations???

Moreover, you have no idea about my specific prior experience in the stock market anyway. And I will not go into any of that here. You assume jack sht which does not make any sense or have anything to do with the original inquiry of the thread. The only reason I am interested in asking it on this board is to get an idea first before paying for possibly unnecessary advice. But you are right on one account. You are no lawyer. That is easy to observe since you seem to have everything figured out about me.