# Starting an investment company



## Argonaut

My friend and I have been talking about this for a while. We're a perfect compliment for it, my building outperforming portfolios and drive for research and knowledge, and his ability as a salesman and people-person to be the frontman. I have the CSC, and he has IFIC and doing his CSC and PFP. I have an idea for a company name. The thing we don't know is the logistics behind it all. Probably have to get lawyers involved and contracts and all that? Where to put the money, Interactive Brokers? I see they have an advisor option. What about setting up registered accounts for clients?

No rush, we're both working right now and want to do it sometime in the future, maybe ease into it. I'm thinking of charging 1% annual fees, so we would have to be managing millions to make it worthwhile as a full time job anyways.


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## Square Root

Without relevant experience working for a money manager, this will be very difficult. Why not get a job in the field first? This will also allow you to make some client contacts. Managing someone else's money is very different from managing your own but good luck.


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## praire_guy

Don't you need the CFA in BC to manage money? Not selling mutual funds but investing on behalf of others.


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## Four Pillars

I'm sure others who know more details can chime in, but I don't think your plan is very realistic. I could be wrong, but I don't think it's that easy to start an investment fund.

Just an idea, but you might be better off going to an established investment company and pitching your team to them. That way, they can provide the infrastructure you'll need (investment compliance, legal) and you two will run/sell the fund. You might have to prove you have some investors lined up already.


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## Argonaut

Not really looking for advice, just wanted to see if anyone knew the logistics. Logistics, logistics, logistics! War, business, relationships.. it's all about logistics. I don't want to work under anyone or any company, him and I have done that already. I'm not ready to go all-in on this yet, but if and when I do I want to be prepared.

1. Register a business/corporation name
2. Open up the necessary bank/brokerage accounts
3. ???
4. Profit!


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## jcgd

Have you checked out the Investment Industry Regulatory Organization of Canada (IIROC) webpage?

http://www.iiroc.ca/industry/registrationmembership/Pages/default.aspx


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## FrugalTrader

Why not start an "investment club" rather than an investment company? I believe the rules for investment clubs are less onerous than starting an actual fund.


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## MoneyGal

Hmmm. Do people really not know this? OK. The licenses to manage OPM (other peoples' money) are all held by dealers in Canada. Thus, you need a dealer to sponsor your license, and you will need to do a compliance / conduct and practices course (and pass it) before you can obtain a license (held by a dealer), and then complete what is essentially a probationary period. 

Now, there are lots of different ways to get a dealer to hold your license, depending (in part) on what kind of license you want to hold. And there are lots of different "models" for the relationship between the dealer and the advisor -- independent (and varying definitions of what that means), employee, MFDA, IIROC. 

If you want to do discretionary money management that is another whole different ball game and layer of licensing and documented experience in the industry. Specifically, you need the CIM (Chartered Investment Manager) license. 

None of these things have anything to do with the CFA, CFP or any of the multitude of other optional designations advisors can get. If you want to manage money on behalf of other people, you need a stock and bond license (which also allows you to trade in MFs), or a MF license (which restricts you to MFs), and you need a dealer to sponsor and "hold" your license, and you need to meet the dealer's internal requirements for compliance, conduct and practice. That is it.


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## humble_pie

moneyGal-please-advise-me-i'm-planning-to-write-a-COMIC-BOOK-about-investing-i'll-make-a-million-bucks-then-the-globe-&-mail-will-air-a-hideous-defective-video-about-ME-i'll-look-like-a-weeping-joke-but-never-mind-cuz-i'll-be-making-a-million-bucks-the-whole-time-please-moneyGAL-do-you-think-i-should-INCORPORATE-thank-you-so-much


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## MoneyGal

humble_pie said:


> moneyGal-please-advise-me-i'm-planning-to-write-a-COMIC-BOOK-about-investing-i'll-make-a-million-bucks-then-the-globe-&-mail-will-air-a-hideous-defective-video-about-ME-i'll-look-like-a-weeping-joke-but-never-mind-cuz-i'll-be-making-a-million-bucks-the-whole-time-please-moneyGAL-do-you-think-i-should-INCORPORATE-thank-you-so-much


Ugh. I hope this is not actually a comment about me. The Globe aired a video I shot (last March) last Monday - I looked like a zombie in it.:upset:


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## humble_pie

MoneyGal said:


> I hope this is not actually a comment about me.


of course not. It was a reference to that shocking video featuring andrew hallam. The pixels kept breaking down. At one point a quarter of his face dissolved & wept into his jawbone. Hallam says nothing except he made a million bucks woo-hoo & the financial industry's licensed advisors are evil thieves.

so very sorry if the above was not clear. What i meant to make fun of was all these cmf forum kids with 1 or 2 years' experience in the current bull market who are suddenly jumping out of the woodwork, with no training or experience whatsoever in discretionary portfolio management; but now they'd like 1% for their thoughts. Argo is the 4th young person in the past few weeks to present himself.

(sigh) it's so difficult to bring the children up properly these days ...

ps i did see your video. You did great ! do not worry in the slightest.


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## Square Root

HP. Yes we are getting some pretty tedious posts from relative newcomers(not Argo) asking technical questions on matters that could be easily reseached by them other places. I must say there isn't much of interest for me in these type of questions or the responses that do pop up. MG has way more patience than I.


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## humble_pie

argo is a surprise to me. He's not going to get any clients unless he goes in for the proper training, which is (probably deservedly) long-drawn-out, painstaking, challenging.

the strange fact in this development is that, with the right licenses & experience, argo could be a huge success.

but casually taking other people's money & tossing it into an account at interactive brokers *not.*


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## Square Root

HP: Well put. The OP was a little surprising, almost naive.


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## MoneyGal

But...getting an IIROC or IFIC course under your belt and signing up with IB *is* one way to do it. It isn't a naive question, I don't think; look at the range of suggestions provided in reponse: get a CFA, just set up a corporation and open an account, start an investment club, etc. Not that these are bad suggestions per se -- but none of those things will allow you to handle even one cent of another person's money. 

I responded not because I have infinite wells of patience biggrin but because I was surprised at how misunderstood this is. What does it take to OPM? A license to do so. How do you get one of those licenses? You must be sponsored by a dealer and meet their rules and basic industry qualifications.


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## Square Root

MG I don't think the question of "how to do it " was naive but rather the apparent ease to be successful managing OPM implied in the OP. Furthermore if one was seriously considering this avenue, surely there are better and more reliable sources of how to get started. Not that you aren't a reliable source of course.


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## Homerhomer

MoneyGal said:


> But...getting an IIROC or IFIC course under your belt and signing up with IB *is* one way to do it. It isn't a naive question, I don't think; look at the range of suggestions provided in reponse: get a CFA, just set up a corporation and open an account, start an investment club, etc. Not that these are bad suggestions per se -- but none of those things will allow you to handle even one cent of another person's money.
> 
> I responded not because I have infinite wells of patience biggrin but because I was surprised at how misunderstood this is. .


......or because instead of saying "you gotta be kidding" the kind members actually offered alternatives that have some merit in his situation. ;-), ie majority of successful money managers who run their own shops have started as employees of established firms and worked their way up.


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## MoneyGal

OK, I answered in my typical "style" (I answered the question in front of me and that's it) and didn't venture outside that. Sometimes I think I should have been a compliance officer; I apparently think like one.


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## Argonaut

MoneyGal said:


> But...getting an IIROC or IFIC course under your belt and signing up with IB *is* one way to do it.


This is my take-away from all these posts, thanks.

I must say, this thread is filled with what I perceive to be an annoying trait shared amongst Canadians. The tendency to be Debbie Downers and Finger Wagging Paternal Figures, "no-you-can't-do-that", etc. As a Canadian I do this sometimes as well. But the American in me is winning over in this case.. let's just cut through all the red tape and do this. A good plan today is better than an excellent plan tomorrow. If you succeed, great, if you fail you learn something from it.

Another avenue might be to forget other people's money, initially, and just be financed. I have great credit and am pre-approved for business loans and all that.


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## marina628

I personally would not be comfortable to put my million dollars in any company having less than a billion and have some solid performance behind it.You may very well complete all the steps but to me that will be your biggest hurdle to get people trusting you with their money.


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## Argonaut

Yes, you have to start somewhere though. Money managers with high net-worth clients tend to go pretty conservative because they want to keep the client. A lot of it is sales-based, which my friend excels at. You wonder why investors always fall for ponzi schemes and that's a part of it.


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## humble_pie

argo the american in you is blinding you to the reality.

imho few will give an inexperienced youth without appropriate qualifications or experience their $$ to manage.

if i were seeking a portfolio manager, there are a couple whom i like & respect very much. They have CFAs. They also have CAs plus they have 25 years in the investment biz with 20 years spent directly in discretionary management. They, too, are charging 1%, the same as what you fantasize for yourself, but theirs is top-of-the-line service.

do you want to get where they are ? there's a whole heap of work for you to do first.

speaking as a person who has praised & supported you in the past on many occasions, i'm somewhat taken aback to see how you are flaunting yourself now. I'm almost tempted to ask haroldCrump's question: who are you & what have you done with that sweet, witty, brainy Argonaut we used to know & like so much.


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## Dmoney

Argonaut said:


> I must say, this thread is filled with what I perceive to be an annoying trait shared amongst Canadians. The tendency to be Debbie Downers and Finger Wagging Paternal Figures, "no-you-can't-do-that", etc. As a Canadian I do this sometimes as well. But the American in me is winning over in this case.. let's just cut through all the red tape and do this. A good plan today is better than an excellent plan tomorrow. If you succeed, great, if you fail you learn something from it.


Love the attitude. Can it be done? Yes. Will it be easy? Probably not. Could it fail? It very well could. Could it succeed? Absolutely. 
I commend you for even thinking about it, as it's a route I've considered though not seriously. 
I know a couple of guys who started a hedge fund, but it sputtered out as they couldn't get the capital needed, and people wanted several years of results before committing.
What kind of track record do you have managing your own portfolio? How big do you need to grow to sustain a company? What kind of revenues do you want?

My problem with the idea is that to do it right, I think you have to commit to do it full time, but to commit to do it full time, you need a bare minimum of $10 million invested I'd say, though with two people involved that ratchets up to $20 million (I wouldn't take the risk for less than $100K/year at 1% fee).

Course, like you said, you just want to know the "how" rather than the advice.... neither of which I can offer, but best of luck to you and I'd love to hear of any progress, and wouldn't mind hearing about the logistics as well.


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## Argonaut

Frankly, I'm not soliciting investors here or anywhere right now. That was not the point of this thread. I wanted to know the logistics behind setting up an investment company, and this being an investment forum I thought it relevant. And the best part is that there's no lawyer or consultation fees. People can choose to help me or not, as I do on other threads. 

Based on what I've seen from stockpicking by the big fund managers on BNN, I'm not impressed at all by years of experience. You're either good, bad, or mediocre. And like it or not, a lot of the task in getting clients is sales and networking ability. I never claimed to be _humble_, either. Anyway like I've said a number of times, attracting clients and the ability to manage money was not an issue in this thread.

EDIT @dmoney: Thanks for the post, I agree with you on a number of points. Perhaps an answer is to invest using our own capital and possibly a bit of borrowed money initially to establish a track record for the company. This is not so much because I'm worried about attracting clients, but moreso because I want to postpone the great time expense needed.


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## Four Pillars

I really don't think the people on here are trying to be debbie downers, we're just trying to help.

This forum isn't a bad place to start, but the reality is that most investors don't have a clue about the mechanics/qualifications behind what you are asking. I work in the industry and I really don't know either.

You might want to contact some regulatory bodies and ask them or read their websites to try to figure out what's going on.

One thing you could start doing, if you aren't already is establishing performance numbers. You need to have meticulous records (ie all trading activity etc) and use an established rate of return method.


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## jcgd

Well Argo, if nobody ever tried to succeed at what they want to do, I wouldn't have any  companies to invest in. What you are trying to do is what I want to do with my life. I love investing, why not get paid to do it? I'm not likely going to start my own fund, maybe when I'm older and successful enough to put my name on a firm, but I don't see any problem with trying. Worst that will happen is you fail, right? 

I try my best to do whatever people tell me I cannot. Which is most everything really. My parent are very anti risk. Which is pretty risky to me... they pretty much float along and trade each hour for a capped sum of money and then make that stretch as far as they can. Opportunities don't exist to them, because they choose not to acknowledge them. They might lose money, so they choose to continue having none.

My coworkers all think I'm insane because I invest in companies instead of real estate. I'm all for real estate if I can justify it. But I don't understand why someone would buy into a market that is essentially in bubble territory, as far as I can figure. I can't get a property cash flow positive, I'd have to leverage my self to my eyeballs and I would literally be trapped with this gigantic, illiquid asset as soon at the party is over.

I say go for it if it's what you want to do. I'd rather try and fail then sit there wondering if I could have succeeded.


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## Argonaut

@Four Pillars: I love keeping meticulous records.. sometimes I open Excel for no particular reason but to look at numbers and pie charts. I had 31% last year, and sitting on 16.6% this year. I realize these numbers are harder to achieve the more capital you have, but the same principles apply. 2010 was a small sample size, but I did fine then too. I seem to do better in the bear (2011) than the bull though (2010, 2012).

@jcgd: Good post, you see where I'm coming from then. How old are you? Nothing is too young, really. I'm 25. Good luck to you.


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## humble_pie

there has to be something going around these days.

jcgd only an hour ago was the 5th in as many weeks. "I love investing, why not get paid to do it?" he says, meanwhile admitting he has zero investment experience.

why not indeed. If we're hiring wealth managers for love alone, why not hire JustAGuy. At least with Guy, bankruptcy will be swift & merciful.

here's No. 4 in wannabe portfolio management. This poster hasn't even started an undergraduate major in finance yet, but somehow he believes that mr & mrs JQ Public are panting to hand their life savings over to him.

http://canadianmoneyforum.com/showt...people-s-money?p=144892&viewfull=1#post144892


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## Argonaut

Years of investing experience is something, but it's not everything. Case in point: All of the doobs on BNN. How on earth Brian Acker has clients I'll never know. Him and his magical "model price", and his average performance of about -30% on past picks. For me, investing the money will be the easy part, that is my skillset. My friend has the sales and networking skillset. I suspect I'll be the one to manage the legality and the hoop-jumping, so that's what I need to learn.


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## humble_pie

Argonaut said:


> ... attracting clients and the ability to manage money was not an issue in this thread.


attracting clients and the ability to manage money are the *only* issues in this thread.

all this bumph about logistics is pixie dust tossed up to obscure the fact that there will be no clients because there is not yet any adequate track record in managing 3rd party money. 

two-and-a-half amateur years are not a track record. Insulting established money managers on 2nd rate TV programs is not a track record.

it's tragic, i know, but a wannabe does have to work *in* the industry for a number of years to earn his schmeck. It's even better when he's a good team player who doesn't brag, boast or antagonize potential future clients. At 25, the wannabe should not be sneering that he's been there, done that, doan wanna work for Da Man no mo'.


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## jcgd

But Humble, why is it such a big deal to you that we have directions we want to head with our lives and want to learn the path to get there? This is a forum for investors, and who said we have to be strickly DIY to be here? Does it not seem likely that interested kids like me come to an investing forum to learn, talk, discover about something we enjoy and are hoping to turn into a career? Not everyone necessarily wants to be picking stocks for a multi billion dollar firm. Maybe some of us just want to be advisors workin' down the street at Scotiabank. 

Argo didn't say he wanted to do this tomorrow. I didn't say I want to do it tomorrow. Skyfall didn't say they want to do it tomorrow. So maybe we have 32 years to find out if we will ever even get there, but we need to start now and know what the hypothetical process would be.

I feel it's completely within my right to have direction, goals and dreams. Same goes for everyone else. 

Sorry to be off topic.


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## donald

If anyone has the qualifications for this question it would be archer-maybe he will tell you how he went about it....He would be the expert around here.


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## ddkay

You don't want your salesguy friend to pitch your fund like the average stockhouse pumper and dump'er or ShamWow guy. He needs the right background. A few years as a fund analyst/pm/trader can help you get the connections you need... you'll have to go back to school for that.. Can your enroll into an MFE program next year? Things aren't how they used to be when George Soros started his career selling souvenirs...

Oh yeah, where is archerETF?


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## humble_pie

jcgd said:


> But Humble, why is it such a big deal to you that we have directions we want to head with our lives and want to learn the path to get there? This is a forum for investors, and who said we have to be strickly DIY to be here? Does it not seem likely that interested kids like me come to an investing forum to learn, talk, discover about something we enjoy and are hoping to turn into a career? Not everyone necessarily wants to be picking stocks for a multi billion dollar firm. Maybe some of us just want to be advisors workin' down the street at Scotiabank.
> 
> Argo didn't say he wanted to do this tomorrow. I didn't say I want to do it tomorrow. Skyfall didn't say they want to do it tomorrow. So maybe we have 32 years to find out if we will ever even get there, but we need to start now and know what the hypothetical process would be.
> 
> I feel it's completely within my right to have direction, goals and dreams. Same goes for everyone else.
> 
> Sorry to be off topic.



to me this message seems totally on topic.

but it isn't what the OP is saying.

OP says he wants to leap to the summit of discretionary portfolio management - other people's money handed over with fiduciary strings attached that he's not willing to understand - without any training or preparation.

he doesn't want to work for a multi-billion dollar firm because, at 25, he's already too good for that gig. No, he just wants people to give him, oh, about 10 or 20 million $$ so he can play with it.

it's like a hospital orderly suddenly says he wants to do neurosurgery without going to medical school.

returning once again to your hopes & plans, they seem very reasonable. It's clear that you intend a steady learning pace. There's no megalomania, everything looks orderly & logical. I sincerely hope you will have a happy learning experience & i wish you the greatest good fortune.


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## Argonaut

I didn't say I wanted $10 or $20 million, I said that it would have to be at that point where it would be worth it for a full time job. But you are right in that I do not wish to be under anyone. It's the American in me; just do it and take control. Learn from it. Time is money and the grave is a place to rest.

Some other good posts are emerging upthread. I like it. And I like the idea of listening to archerETF, maybe I will PM him. As of now here is the initial plan:

1. Start a business and pool equal amounts of money with my friend.
2. Open a free business account at ING, and a brokerage account at IB.
3. Manage this initial pool of money as a starter account.

This won't take much time off my regular day as I look at investing related stuff all the time. Wouldn't change much in respect with how I manage my own money either. Once I figure out the how-to's on managing other people's money (this could be a while depending on our current jobs) we'll go from there. I'm discussing it now with my friend and we're excited about it.

@ddkay: My friend isn't a pumper, but he is a salesman. Has great numbers as an advisor for TD, a young upstart like me.


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## Ethan

2 of the most successful hedge funds of the last decade were Scion Capital and Cornwall capital. 

Cornwall was started by two 30 year olds in 2003 with $110,000 and a Schwab account, they turned that $110,000 into a 9 figure portfolio within 5 years.

Scion Capital was started by Dr. Michael Burry shortly after finishing his residency. Although he had no professional money management experience, Dr. Burry was able to raise significant funds after getting noticed for his stock picking ability on an online forum (sound familiar)?

Warren Buffett literally knocked on his neighbors doors in Omaha, Nebraska to raise funds for his first partnerships.

I wish luck to any entrepreneur, young or old, who has the strength and determination to go out on their own.


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## Ethan

MoneyGal said:


> Hmmm. Do people really not know this? OK. The licenses to manage OPM (other peoples' money) are all held by dealers in Canada. Thus, you need a dealer to sponsor your license, and you will need to do a compliance / conduct and practices course (and pass it) before you can obtain a license (held by a dealer), and then complete what is essentially a probationary period.
> 
> Now, there are lots of different ways to get a dealer to hold your license, depending (in part) on what kind of license you want to hold. And there are lots of different "models" for the relationship between the dealer and the advisor -- independent (and varying definitions of what that means), employee, MFDA, IIROC.
> 
> If you want to do discretionary money management that is another whole different ball game and layer of licensing and documented experience in the industry. Specifically, you need the CIM (Chartered Investment Manager) license.
> 
> None of these things have anything to do with the CFA, CFP or any of the multitude of other optional designations advisors can get. If you want to manage money on behalf of other people, you need a stock and bond license (which also allows you to trade in MFs), or a MF license (which restricts you to MFs), and you need a dealer to sponsor and "hold" your license, and you need to meet the dealer's internal requirements for compliance, conduct and practice. That is it.


What if you structure it as a joint venture/partnership, and only solicit funds from accredited investors? Would you need any of the above qualifications?


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## humble_pie

argo you say your portf is up 16.6% year-to-date ? 

i almost never check mine because i prefer the net worth approach. But out of curiosity i added up the portf itself. In 2012 i'm up 29.03% ytd, including gains plus dividends.

am i boasting how great my skills are ? No. Planning to bust into the hedge business ? No. Thinking to sell my services for 1% fee ? Never, got many other things to do.

i am wondering where these cocky brats with 2 puny years market experience are coming from. We're commencing the 4th year of a powerful bull market. A rising tide buoys all boats. The brats have never known anything different. They've never even lived through a market collapse. In just 30 short months, they've convinced themselves that they are wunderkind. They are invincible. 

as it happens, i belong to the statistic that ambitious wealth managers are always wanting to court as clients. Nothing could turn me off more, about a potential professional manager, than the kind of swollen cheek from beardless babes that's being thrown around in this thread.


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## Sampson

I find this thread interesting. No snide comments or useful advice from me.

Just an observation how things have changed. There have been multiple threads lately about this subject.

But I used to think all the people with this type of interest wanted to go work for Goldman Sachs. Maybe the internet and all the technological advances and access to brokerages have made Wall Street obsolete. Or maybe it is all those protests.

If Goldman Sachs runs the show, wouldn't it still be better to work for them?


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## Four Pillars

Argo - At this point, I would say go forward with it. What's the worst thing that can happen? You learn a lot more about the investment industry and maybe you get some kind of career change out of it eventually.


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## Ethan

humble_pie said:


> i am wondering where these cocky brats with 2 puny years market experience are coming from. We're commencing the 4th year of a powerful bull market. A rising tide buoys all boats. The brats have never known anything different. They've never even lived through a market collapse. In just 30 short months, they've convinced themselves that they are wunderkind. They are invincible.


I'm not sure if I'm being lumped in this group or not, but since I'm 27 and have expressed interest in managing money I imagine I'm included in that group. I was working on a bond trading desk when Bear Sterns collapsed. I know what market collapse feels like. I can't speak for the others but I think it is unfair to assume that we only know the good times.


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## humble_pie

it looks to me like a guy thing. Sometimes young males get so hopelessly cocky. This bull market appears to have spawned some. Being enraged at & jealous of active wealth managers, as we see above, is a telltale symptom.

fortunately there are also some in this forum, like cannadian & dmoney, who know better. Who are carefully preparing themselves for the big portfolio wars out there in the real world by suiting up armour, one piece at a time, like samurai warriors.

i for one doubt anyone will ever find ambitious young women portfolio managers trying to go it as amateurs with no preparation.

you won't find women refusing to take advanced courses, refusing to earn appropriate qualifications, refusing to work long-drawn-out internships with successful wealth managers. You'll never find women insisting they can hit up canadians for fees just because, hey, they think they're worth it.


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## Square Root

Who wouldn't want to be a money manager? I know quite a few and they really seem to have nice lives. Every one of these started as a junior analyst at a fairly big company. Most started at a bank. Experience and track record managing OPM as well as extensive contracts in the business are absolutely critical. Having a friend with good marketting skills? I wouldn't count on that for much. Having said that, stanger things have happened. I say go for it but do it in a way that has some chance of success. Starting from scratch has virtually no chance of success. 
Also, by bringing your aspirations to a forum like this, no matter how well intentioned most people here are, is going to cause divergent responses of "go for it boy" or alternatively "you don't have a realistic plan" from the experienced guys. Asking for just the technical steps is still inviting opinions. That is why these types of forums are fun, they allow people to express themselves rather than just give technical answers. Anyway, I wouldn't give up my day job (I am assuming you have one) unless you find a new one at an established money manager.


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## MoneyGal

On the flip side (and uh, I'm not sure how advisable this post is going to be from me), what I see too often in women (in my opinion) is overhesitation. As in - women probably "intern" and think, "oh, I should get another designation before I'm ready to really go out on my own" when they are likely totally ready, just lacking confidence -- I personally see this all the time in all fields, not just money management. Women probably over-intern while men may under-intern. 

(Example not from finance: women I know will talk about wanting a professional designation, then will describe the absolute longest, slowest path to getting there. "Oh, I'll go part-time, and I should probably get this certification first to really prepare," etc. Total anecdata but there you go.)


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## MoneyGal

Square Root said:


> Who wouldn't want to be a money manager? I know quite a few and they really seem to have nice lives.


Me.


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## humble_pie

MoneyGal said:


> On the flip side (and uh, I'm not sure how advisable this post is going to be from me), what I see too often in women (in my opinion) is overhesitation. As in - women probably "intern" and think, "oh, I should get another designation before I'm ready to really go out on my own" when they are likely totally ready, just lacking confidence -- I personally see this all the time in all fields, not just money management. Women probably over-intern while men may under-intern.
> 
> (Example not from finance: women I know will talk about wanting a professional designation, then will describe the absolute longest, slowest path to getting there. "Oh, I'll go part-time, and I should probably get this certification first to really prepare," etc. Total anecdata but there you go.)



so interesting to hear it put this way.

things will change, change is gradual.

it's for our daughters, too.


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## Square Root

MoneyGal said:


> Me.


I know. Is it because you lack the testosterone? i was trying to be rhetorical.


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## MoneyGal

Portfolio Manager
(From The Insiders Guide to the Best Jobs on Bay Street by Joe Kan. Copyright John Wiley & Sons; 1 edition. Used by arrangement with John Wiley & Sons, Inc.)

The portfolio management (or investment management) function is a straightforward one: To invest other peoples money profitably. As well, it is expected that the portfolio outperform either some benchmark index (e.g., S&P Composite, S&P 500, etc.) that reflects the portfolio's mandate or peer group of competitor funds with a similar focus and investment objective. The money that is handed over to a fund manager to invest is typically invested in financial assets (stocks and bonds). How a fund manager then goes about building a diversified portfolio depends on a number of factors, including: the portfolio policy statement and the investment philosophy of the manager.

The portfolio manager job is also considered a second-generation or sometimes third-generation job. Nobody comes straight out of MBA school and lands a role as a professional money manager at an established and respected institution right away. The most common paths to the portfolio manager job are:

1. Start out on the buy-side as an analyst with coverage responsibilities of 30 to 50 companies across three or four industries. After a few years, get promoted to a co-manager role on a larger fund or assume portfolio management responsibilities on a smaller fund.
2. Start out as an equity research associate on the sell-side. After three years or so, get promoted to a (sell-side) analyst role with primary coverage responsibilities. Then, after demonstrating your analytical and stock-picking abilities to the Street, move to the buy-side as a senior buy-side analyst or money manager.
3. Start out as an equity research associate on the sell-side. After three years or so, move over to the buy-side as an analyst providing research and analytical support to the portfolio manager(s). After a few years (typically three to five, although the timing is less defined than it is for a research associate on the sell-side), get promoted to assistant portfolio manager on a larger fund or take on portfolio management responsibilities on a smaller fund. 

Those interested in the portfolio manager function should also consider the venture capitalist role. Although both the portfolio manager and venture capitalist manage a portfolio of securities, the primary difference is that the VC deals with early-stage private companies, whereas the PM deals primarily with public companies. That difference aside, the similarities are many:

a. Both have the challenge of sifting through a lot of information to find a few good investment ideas.
b. Both are trying to earn a consistently superior rate of return of their portfolios.
c. Compensation for both tends to be tied to bottom-line performance of their funds.


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## MoneyGal

Hmmm. I wonder how I could gauge how much testosterone I have? I'm a woman working in a male-dominated field. I probably have more testosterone (if that's the deciding factor!) than the "average" woman. Someone at work the other day called me a "freak of nature" because "you're the only woman I've ever met who understands structured products" (I told him he needs to expand his social circle).


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## Square Root

Good posts MG. I think you laid out a very good case for it being very difficult to start as a PM from scratch.
I know quite a few woman who understand structered products. I would agree that they are a pretty small minority though.


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## MoneyGal

(I should emphasize that I cut and pasted that penultimate post from the source given at the top of the post)

I wanted to provide a sense of the "typical" career path to ICPM.


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## Toronto.gal

MoneyGal said:


> what I see too often in women (in my opinion) is overhesitation. As in - women probably "intern" and think, "oh, I should get another designation before I'm ready to really go out on my own" when they are likely totally ready, just lacking confidence -- I personally see this all the time in all fields, not just money management. Women probably over-intern while men may under-intern.


So true, but I agree that things are changing slowly but surely! 

Nothing wrong having goals, being ambitious & wanting to succeed, BUT most times there are NO short-cuts in life without consequence. 

Imagine being operated by someone without MUCH experience [there is a reason why residency training = several years {in many fields}].


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## VJ99

As with so many things, something that looks simple from afar is devilish in its detail. 
I left an institutional fund manager a few years ago to start my own investment management firm. 
Even with a great concept – global tactical portfolios using ETFs – it’s been a long, hard road.
As for doing it on the side while you work another, unrelated job - good luck to you.

What you will find is that making the investment decisions is fairly straightforward. 
It’s the business of actually managing the money that is time-consuming and costly: large capital requirements; lots of regulations and audits; lots of paperwork; dealing with custodians; providing regular performance reporting; managing positions across scores of accounts; meeting and pitching prospective clients. The list goes on but I think you get my point.

All this will cost money and require staff. 

The first thing to do would be to get familiar with the regulations as provided by your provincial regulator. Here’s a link for the Ontario Securities Commission.
http://www.osc.gov.on.ca/en/SecuritiesLaw_irps_index.htm

I don’t mean to discourage you but it does help to know what you are wishing for. Of course, the rewards are significant if you can make a success of it. 

BTW – I will be speaking at the World Alternative Investment Summit in Niagara Falls tomorrow if anyone as a chance to visit. Here’s a link.
http://www.waisc.com/

And I will be on BNN Market Call Thursday afternoon with Michael Hainsworth. If you have ETF questions, that’s the time to call in.

All the best, 
Vikash
www.archerETF.com


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## Argonaut

Thanks for your insight, Vikash! To clarify, I would be starting up the company on the side, with our own capital and not taking clients yet. Like a holding company. Would you say that a partnership structure or corporate structure would work better in this case? Perhaps initially a partnership that can incorporate later. If and when I want to do this full time then I will obviously commit all my time to it.


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## VJ99

As long as its only your own money, no problem. I'm not qualified to give advice on your corporate structure. If it is just you and a friend, then maybe a joint bank account with a joint trading account would do the trick. As soon as you starting taking other people's money though, all the regulatory stuff will kick in.


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## Fain

Argonaut said:


> This is my take-away from all these posts, thanks.
> 
> I must say, this thread is filled with what I perceive to be an annoying trait shared amongst Canadians. The tendency to be Debbie Downers and Finger Wagging Paternal Figures, "no-you-can't-do-that", etc. As a Canadian I do this sometimes as well. But the American in me is winning over in this case.. let's just cut through all the red tape and do this. A good plan today is better than an excellent plan tomorrow. If you succeed, great, if you fail you learn something from it.
> 
> Another avenue might be to forget other people's money, initially, and just be financed. I have great credit and am pre-approved for business loans and all that.


Don't let these people get you down, most people are conservative in their investment strategy and don't know anything apart from buy and hold. Unless you have balls to take a chance, you'll just be wishing instead of having. If you have a good track record with a good percentage return on your investments. Go for the gold, start early and even if you don't get alot of clients early on, they will eventually be won over by your returns that you've made for yourself at least. Then when you start managing other people's money successfully then come the referrals and then come the big money. 

This is something you can do in addition to your other job as well until it steamrolls into something big.

I am starting my own S Corporation based out of delaware.


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## Homerhomer

The young crowd around here doesn't seem to understand that the kind (and unwanted as OP stated) advice given wasn't not to do it, but to do it the right way.

In just about any business it is beneficial to work for someone first to get experience and learn the ebs and flow of the profession, the business, and get the connections. No magic wand.


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## Eclectic12

Fain said:


> Don't let these people get you down, most people are conservative in their investment strategy and don't know anything apart from buy and hold. Unless you have balls to take a chance, you'll just be wishing instead of having ...
> This is something you can do in addition to your other job as well until it steamrolls into something big.
> 
> I am starting my own S Corporation based out of delaware.


Problem is that the people most likely to place their money with a manager are likely also likely going to be asking for credentials and experience in addition to past record. In other words, they are going to be conservative.

If one can start on their own and grow into something big - that's great.

But like my sister-in-law who thought hanging a sign outside her hair dressing salon would result in a steady stream of customers, there may be a lot of time, effort and sweat required to achieve this.


Cheers


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## myfinance

FrugalTrader said:


> Why not start an "investment club" rather than an investment company? I believe the rules for investment clubs are less onerous than starting an actual fund.


what's an investment club? or established investment clubs?


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## Just a Guy

Usually it's a group of people who get together to discuss to discuss investing (something like this board). Some take it a step forward and "pool" their money to buy investments (usually on a regular basis).


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## I am the Walrus

Update? What happened with the fund....


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