How to Start an Investment Management Company


Investment management can be a risky and chaotic business, but it can also be an exciting and highly lucrative enterprise for those who know what they are doing. If you have -- or have access to -- the necessary resources, you may be able to quickly build a great deal of wealth for yourself, your employees, and your clients by creating your own investment management firm. Doing so may require extensive interpersonal and quantitative skills, as well as knowledge in the worlds of business, finance and law.

Forge strong relationships. Investment management firms need clients, and you will find it easier to get going as a firm if you already have a strong network of prospective clients who already value your knowledge and vision in the world of investing.

Write a business plan. It may be best to hire a professional business plan writer to help you. Research every aspect of the investment management business. Write it with the understanding that, as helping people to make good investments will be your business, you must at least be able to show why your own business would be a good investment. Give a detailed description of your organizational structure, marketing methods, investment philosophy and key personnel. Show how you will deal with the problems that investment management companies often face, such as the loss of valuable employees.

Get capital. Present your business plan to key investors and show them how they can make a substantial amount of money by believing in your firm. You may do this by approaching private investors or venture capital firms.

Get licensed. Depending on the type of investments you plan to do and the location of your business, you and your employees may have to take tests and pay fees to get various types of licenses. One thing that government looks for is how much starting capital you have. An investment management company without sufficient starting capital may appear to be in danger of insolvency, and such a firm will not be able to get the necessary licenses.

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