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Managing Investments for others as a business - easiest method?

including wills and probate
shauniekent
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Managing Investments for others as a business - easiest method?

#159621

Postby shauniekent » August 14th, 2018, 5:49 pm

Hi all, posting in the off chance someone might actually shine some light on this for me. I am musing the idea of setting up a very small scale business where i would assist others with investing their money - whether that be isa/sipp or simply savings.

I don't know whether this would take the form of taking custody of their money, managing an account set up in their name for them with their log in or other.

I realise there are potential drawbacks to managing money (especially for friends/family) and also in raising sufienct interest/capital but i'd like to keep any answers focused please on the legal/regulatory aspects and how i could legally operate such a business. So far i have deduced that something called an 'unregulated collective investment fund' might be the way to go (but i would only be able to assist/invest for high net worth individuals).

My aim would be to run a relatively low maintenance stockopedia stock ranks farming type investment strategy.

Any help much appreciated,
Thanks,
Shaun

Alaric
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Re: Managing Investments for others as a business - easiest method?

#159626

Postby Alaric » August 14th, 2018, 6:12 pm

shauniekent wrote: how i could legally operate such a business.


It would be difficult to avoid being regulated by the FCA, so that's probably the first area to investigate.

brightncheerful
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Re: Managing Investments for others as a business - easiest method?

#159833

Postby brightncheerful » August 15th, 2018, 1:07 pm

A while back, I was considering providing stock market share tips on my website and via a printed newsletter. Having researched the legality, I would need to be regulated if i were to recommend any particular share/company in which to invest, but not if I were confine my comments to generalities. For example, i could write about the Oil and Gas Sector but not recommend buying or selling shares in BP.

(For the record, I know nothing about the Oil and Gas sector; also, having been on a most valuable mailing list when I bought some new shares in BP for more than they could be bought for ordinary trading in the market, I think it fair to say that anyone expecting to gain from my advice would be disappointed!)

Spet0789
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Re: Managing Investments for others as a business - easiest method?

#159837

Postby Spet0789 » August 15th, 2018, 1:23 pm

Just to check, I assume when you say “as a business”, you mean you expect to be paid a fee for this?

If so, I think it will be almost impossible (and not appropriate) to avoid being regulated. As has been suggested, I’d start with the FCA website.

melonfool
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Re: Managing Investments for others as a business - easiest method?

#159877

Postby melonfool » August 15th, 2018, 4:14 pm

Moderator Message:
Hi - I've moved this to Legal where I think you'll probably get better responses. Mel

PinkDalek
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Re: Managing Investments for others as a business - easiest method?

#159882

Postby PinkDalek » August 15th, 2018, 4:25 pm

shauniekent wrote:… So far i have deduced that something called an 'unregulated collective investment fund' might be the way to go (but i would only be able to assist/invest for high net worth individuals) ...


That part appears to have been missed but I think you mean an "Unregulated collective investment scheme".

As others have said, your first port of call would probably be the FCA, if only to ensure that what you propose is definitely not something that needs regulation, either now or in the future.

You are no doubt aware that many have been caught by such schemes:

https://www.fca.org.uk/consumers/unregu ... nt-schemes


Extract only (my bold):

If a collective investment scheme is not authorised or recognised it is considered an unregulated collective investment scheme (UCIS). Unregulated collective investment schemes are not subject to the same restrictions in terms of their investment powers and how they are run. ...

Unregulated collective investment schemes can be based outside the UK and dedicate money to a range of different enterprises, including less common investment products … .

These schemes can’t be promoted to the general public in the UK, but can be proposed to some limited types of investor, including:

certified high net worth investors
sophisticated investors
self-certified sophisticated investors
existing investors in UCIS


Unless you are looking to Jersey:

Collective Investment Funds (Unregulated Funds) (Jersey) Order 2008
https://www.jerseylaw.je/laws/revised/P ... 00.95.aspx


Seek advice.

shauniekent
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Re: Managing Investments for others as a business - easiest method?

#159901

Postby shauniekent » August 15th, 2018, 5:28 pm

Thanks for replies so far.
I've found a 'level 4' qualifaction 'diploma in financial planning' which seems to be the pre-requisite for becoming an IFA.
https://www.cii.co.uk/qualifications/di ... ification/
There is also a discretionary investment management qualification that would be relevant
https://www.cii.co.uk/qualifications/ce ... ification/

I am confident i could take and pass both of these if requird.

Beyond these it's still unclear if this is all i would need - particularly if i was advising and not handling client money at all. Yes i'd expect to charge for my investment advice - ideally this would be purely a % of investment profit. You see over the long term i'd simply like to build a track record of out performance and charging only a% of profits would be exceptional value to clients compared to some of the (imo) high fees IFAs charge to advise on investments.

Alaric
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Re: Managing Investments for others as a business - easiest method?

#159926

Postby Alaric » August 15th, 2018, 6:50 pm

shauniekent wrote:Beyond these it's still unclear if this is all i would need - particularly if i was advising and not handling client money at all


I'd think you would have to be registered with the FCA as an advisor and satisfy whatever their requirements are these days. Most advisors don't handle client money anyway.

masped
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Re: Managing Investments for others as a business - easiest method?

#160131

Postby masped » August 16th, 2018, 2:41 pm

shauniekent wrote:Beyond these it's still unclear if this is all i would need - particularly if i was advising and not handling client money at all.


It's isn't all you need - providing investment advice is a regulated activity under the Financial Services and Markets Act 2000 and so in order to carry out that activity you need to be approved by the FCA. I suggest you start by looking at the FCA website and read through all of the information about what the FCA expects of you: https://www.fca.org.uk/firms/financial-advisers


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