Launching Your Own Money Management Firm

If you have a background in financial services, you may have thought about launching your own wealth management company at some point down the line. And with the increasing amount of money which is concentrated in a few hands, you are likely to find that your expertise is appreciated. In this blog post, we are going to be taking a closer look at some tips for people who are looking to get started in this sector. After all, it is going to be a competitive field and you need to be ready to make yourself stand out from the crowd.
Follow the Rules
When it comes to running your own money management firm, there are many considerations that you need to make and rules that you need to follow. If you are currently employed in financial services, there are certain protocols which you must adhere to. In many situations, there will be a contractual obligation that prevents you from working on or for a competing firm. You may also be required to step away from the industry entirely for a set amount of time. The last thing that you want to happen is to get sued before you have even properly started. If you are approaching clients whom you have worked with in the past, you need to do this in a tactful manner.
Closely Consider the Costs
Starting a venture of this kind involves some inevitable financial risk. Unlike starting your average small business, there will be some complex regulatory requirements that you need to fulfil before you can get started. On top of these, you also have to factor in things like insurance costs, office expenses, banking fees, subscriptions, staffing etc. As you can see, you will need some significant startup capital. And there is also the risk involved that you won’t be able to attract the clients that you thought you could. When you are taking a risk of this kind, you need to ensure that it is a calculated one.
Create a Pitch
Once you get started in this area, you will want to gather up some momentum as soon as you can. In many cases, the first step is to reach out to former clients while keeping the rules firmly in mind. But before you do this, you should have a clear pitch in mind to convince them to switch their financial service needs over to you. At this point, the only reputation you have is your own, and you need to convince them that the ‘risk’ they are taking is a calculated one. Usually, one of the first things that you will put forward is the amount of time that you will be able to dedicate to them – something the bigger firms will struggle with.
Enlist Support
When you are establishing a business that is this complex in nature, you may need to recruit yourself some professional support. There is a growing number of companies out there which are dedicated to helping financial advisors set up their own practice. After all, there are so many legal issues out there which you don’t want to fall foul of. You should also consider whether it is worth hiring experts when it comes to designing your brand, website and marketing materials. All of these things will play a big role in the image you give across to your clients. Finally, you may also need some full-time employees to assist in areas such as bookkeeping, accounting, or even secretarial duties.
Utilise Technology
There is so much specialised technology out there that you need to utilise it where you can. There are a number of different tools available such as an algorithmic trading platform for quantitative trading which may come in handy. And there is also the standard small business technology which can help in areas such as payroll, accounting, or marketing. After all, you want to streamline the different aspects of your business as much as possible so that you can concentrate on what you do best.
In Conclusion
Launching your own money management firm is obviously going to be a complex process which takes a significant amount of time and effort. However, with the right support and tools, it can also be very rewarding for budding entrepreneurs. Hopefully, the basic points listed above have given you a starting point from which you can build up your company from the ground up.