Expert Tips on Setting up a Successful Investment Company


If you are interested in the world of investments, you may be ready to move beyond purely personal interests. For some, this could involve waiting for the right opportunity to come up at a hedge fund or investment bank. Many, however, will instead look to setting up their own investment company to achieve this goal.

It is important to know that this will not be a quick or easy process. As befits such a serious undertaking, setting up your own professional investment firm will mean lots of hard work. It is perfectly possible and when done correctly, will allow you to achieve everything you want to.

Top tips on setting up a successful investment company

An investment company is essentially an organization that holds and manages investment portfolios. It will build up a pool of investors whom it then invests money on behalf of. Depending on how these investments perform, the company and clients share in the profit or loss. As you can see, the real key is setting up a company that is successful!

Here are some great tips on doing just that:

  • Choose your name – this may sound very basic but the name you call your new company is vital. Just think about it – would you invest in a company called ‘Losers r us’, for example? Although this is an extreme example, it shows why the name you pick is key to telling people what you do and why they should invest with you. Attracting investors to trust you with their money all starts with your company name.
  • Create your business plan – the next step is to write out a detailed and professional business plan to follow. This will help you to attract clients to invest money with you and allow you to set out goals to achieve. It should include things such as what type of clients you are looking to take on, your investment strategies and how you will market your company to find the clients you desire. It is also worth setting out how what type of investment company you will be, from closed to open-ended.
  • Get your paperwork in order – one essential element to setting up an investment company is to get all the licenses you need in order to operate legally. In the USA, for example, this would involve registering with the State, the SEC and the IARD. If you need help with this, it is best to pay for professional legal advice to make sure you are covering all you need to. Most investment companies will choose to set up as a corporation so the company shareholders (i.e. you) are not legally responsible for business debts or lawsuits.
  • Open up a trading account online – once you have all the legal and business documents in place to begin trading, you need a trading platform to do it on. There are many online, such as the popular E*TRADE broker – have a good search around and select the one you like most. Just remember to set it up in your business name!
  • Create your own website – today, investors are more advanced than in the past in terms of what they expect. Most will want to see a professional website – at the very least – before they part with any money. Make sure yours is eye-catching and enjoyable to use while providing all the key information your clients will need.
  • Market your new company – the last thing to do in terms of actually getting going is to find clients. This should be easy enough if you follow what you have already written out in your business plan. Make sure to find attention-grabbing and attractive ways to reach your target audience and generate leads.

Looking after your clients is key

This is perhaps the most important part and one that will determine if you will be successful in the long term. Once you have gained clients who trust you to invest money for them, it is vital that you communicate with them regularly and treat them with respect. Even if the news is not good, you have an obligation to let them know and talk through how you will deal with it. Much of good client relations lies in open, honest, communication and the setting out of expected goals or potential risks upon the investment first being made. The Peter Mallouk-led Creative Planning investment firm shows just how an investment company should be run, to not only make money for their clients but also how to look after them.

Running a successful investment company takes work

As you can see from the above, setting up and running your own successful investment company takes dedication and planning. However, if you are prepared to put the work in and treat your clients well, it is perfectly possible. Just remember to set out clearly the investment strategy you plan to follow for each client and communicate any key news with them regularly. This will see your brand and reputation grow over the years.

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