If you consider yourself to be something of a dab hand at investing, then you might even think about turning it into a business. However, managing your own money is one thing. Managing others’ money is a whole different thing and it takes more than a little prep to ensure you’re ready to handle that responsibility. Here are a few of the steps that help you on the way.
Get the training that you need
Having managed a few investments of your own is not going to be enough to manage others’ investments effectively. You need to look at the investment industry courses that you need to take, whether to supplement your own skills or to ensure that you’re able to legally offer investment advice to your clients. All the money savvy in the world will do you no good unless you have the training to go with it and to win the trust of the clients who come to you.
Build the team that you need
Of course, you’re not likely to do it all alone. Providing you get enough clients, you’re going to need more financial advisors to help manage your clients, as well. Hiring the right advisors is all about making sure the recruitment process is sharpened to the point that you get the people that you need. You can work with recruitment agencies to narrow your scope but, otherwise, you need to be specific about the kind of experience and expertise you need in the firm to supplement your own and to provide excellent advice to your clients.
Make sure that your clients can trust you
There is nothing more important in the world of investing and financial advice than knowing that your clients can trust you. Ensuring GIPS compliance and that all the other red tape is in line is one of the most effective ways you can demonstrate that trust. Of course, over time, you’re going to build a portfolio of happy clients that can do a lot of the speaking for you, but you should always make sure that clients know you’re compliant, insured, and taking all of the steps necessary to protect their investments when they work with you.
By ensuring your firm upholds GIPS Compliance you can improve transparency in your performance reporting and gain a competitive edge in the market. Building credibility with potential clients is vital to the success of a financial advisory firm therefore gaining GIPS verification is a way for your firm to promote its compliance and stand out.
Ensure you can tolerate the risk
Starting your own firm is far from easy. Aside from the fact that you have to manage risk for your clients, you also have to be ready to tolerate a high degree of risk, yourself. After all, you’re getting into a competitive market that you have to stand out within, and you have to win the trust of clients who haven’t heard of your firm before. Your track record, qualifications, and safety precautions can help with that, but you still have to take on a serious degree of risk.
Running an investment firm is a lot more complex than the tips here are going to cover alone but hopefully, you’ve gotten an idea of just the beginning of the kinds of prep you need to invest time in.