Trader with side business of managing seperate accounts
- Thread starter Sagacity1
- Start date
Yes, wenzi I am probably going to do this sometime in the near future. But once I am registered, I read that I need to set up an RIA firm within I think 1-2 years or else the license is invalidated. These are all additional costs/fees I think that would also come into play.
Just not sure it really necessary right now as I plan to start small in terms of network of clients.
My post is based on personal experience. Find a lawyer in your area and explain your intentions. Most will give you an initial visit of an 1-hr or so free of charge. They will explain the overall process, fees and other costs that may be involved.
Most importantly, find a lawyer with experience in setting up companies around a structure that will maximize the protection of your personal assets.
The overall cost of fees, lawyer fees and paperwork will cost you a few thousand dollars (7k-10k) when properly structured.
I would stay away from those that claim that an LLC structure is the safest along with other recommendations for canned websites that help you set the company up.
Just my 2 cents.
I'll make this as clear as possible for you.
If you are providing ANY advice and being paid for it, you need to immediately seek the advice of an attorney who specializes in securities law. There are very specific state and federal regulations that will apply to you. And take it from my experience that they can be very confusing, and if not properly handled can put you in a world of trouble if one of your 'clients' loses money and decides to take action against you. This is especially true in today's environment.
A qualified attorney may advise that under very specific and limited circumstances you can 'advise' without registration. But you need to get that clear, and in writing, and not via a chat room.
At the very least, you will probably be advised to set up a simple corporate structure (LLC) and put all clients under contract with that entity. Under no circumstances do you ever want to do business without some protection, no matter who you are dealing with.
Regarding a series 65 and registering as an RIA, once you take that step you are putting yourself under state and federal regulations. Again, this is why you need to get serious advice before you take any actions.
And finally, IMHO, from reading your posts you are a long way from the point where you should be providing financial advice for a fee.
This is a remarkably smart way of structuring the arrangement. Covestor is going to get a decent cut of fees doing this. I'm sure (hope) they got some sort of compliance system in place to make sure they meet all the various fiduciary duties that are required of them.
Anyone who invest with them (and their subadvisors), are idiots, though.
Anyone who invest with them (and their subadvisors), are idiots, though.
Lets call a spade a spade....
Since this is going to be "side business" we have to assume you are already trading. Therefore, it is reasonable to ask what your trading performance is to date.
Nearly all the time , it generally goes that it isn't what you say ,but how you say it that will tweek the interest of the reader.
In this particular instance, you seem to be very nieve as to what it is you are trying to achieve.
So , to start with , tell us us a bit about your trading performance to date that would warrant you being considered good enough to be an "advisor". It will really help.
NiN