So what is the point of managed accounts if you can not charge anything. As far as i know, you are allowed to manage up to 15 people (friends/family) without needing to be registered. That was my understanding anyways.
you cant charge perf fees for sure in CA. Maybe other states allow charging perf fees without RIA registration.
You can open ib friends and family account from uk. IB uk are fsa registered and do not require you to be registered with fsa to open friends and family account from uk.
gmst said "In US also, you can't charge anything from your investors unless you have registered as an RIA. I am sure this applies at least for CA." US RIA registration is simple and cheap, and the exam is easy. RIA registration is only necessary if you intend to hold yourself out to the public as an investment advisor. If you have a few private clients, you merely only need report to your state regulator. In California, as an exempt reporting advisor, you can only charge performance fees to a private fund where all other investors are accredited investors.
Thank you all for the comments, fair bit to investigate. So as far as managing money in the UK goes, it is impossible unless AUM > 10m??
but you can't impose any lock up periods can you? they can easily take their cash out with click of a button for whatver reason (with the slightest of drawdowns) and you're done, correct me if I'm wrong? there are also umberella funds which charge less - but still around £15-20k a year plus some £1k a month for compliance. £40k is simply too small for a fund. you may consider a normal ltd formation and issue shares to investors who would then be your 'clients'. On the other hand, Virgin Islands offer the cheapest fund formation I know of - as low as $8k or less.. but then only those who really trust you will be given their cash if you're offshore. Full FSA fund only makes sense if you have minimum £10m+ AUM. or otherwise have equity shares in the fund to investors who are willing to take the regulations costs etc. you say performance has been good - but how long has the strategy been running for? to begin with I doubt anyone who doesn't know you well personally and trusts you to give you their cash (unless you've got a 3-4 year track record). so in this case whether you have FSA or not wouldn't make a dime difference. I recommend you register a simple ltd (costs £10) and issue shares accordingly to the 'clients' and operate as a prop firm - then once you have an full audited history and more capital (in the millions) go for a fund structure.
Hmm maybe u would like to take a look at my other post.. http://www.elitetrader.com/vb/showthread.php?s=&threadid=246686 Why charge 40k ? How much do u think u can make ? its not even worth it. On this day even if I have 250k, i wouldnt even think abt charging, if making money thru mnaaging is ur goal. My goal is to make sure this 250k doesnt lose money for a full year, with ups and down not a bull run. Eventually I'll start charging if I hit 1 mil, but 2% of a mil is only like $20k. its more of covered ur daily electric bills, travelling and some time u spend looking on Bloomberg. If I were doing for family n friends, i do it out of goodwill, saving them that 1.5%-2% cost wgiven to mutual funds for advises. Of course this soliciting funds requires a proper Advisory license, even if its private arrangement.