Magazine article The CPA Journal

How to Start Your Own Money Management Business

Magazine article The CPA Journal

How to Start Your Own Money Management Business

Article excerpt


By Douglas K Harman, CFA, CPA Published by Richard D. Irwin, Inc. 1995 How to Start Your Own Money Management Business uses a workbook approach to present issues and problems to be addressed and gives exampies where possible alternative solutions exist. It is designed with a heavy emphasis on practical matters. The ultimate goal is to give the reader a business plan outline of issues that can then be converted into an actual business plan for starting an investment management business.

The author uses the tried and true pedagogical technique of telling you what he is going to tell you, telling you, and telling you what he told you. While the technique certainly reinforces key issues, it also leads one to say, "Haven't I read this before."

The author also uses what might be described as a funnel approach to his presentation. That is, he first discusses broad concepts-legal structure, employee hiring, internal tracking, audits, etc. He then reduces those issues to application in the money management/investment advisory industry. He will further reduce his focus to specific forms, tools, and letters that he uses. Finally, he offers names, addresses and telephone numbers of people or organizations to contact. Through this structure, the author travels from a discussion that might be useful to one entering any business to a discussion that is invaluable to someone entering the money management business.

Lastly, from a design standpoint, it is important to recognize that the author, as he states, is writing to someone with some current or former financial industry experience (accountant, banker, stockbroker, etc.).

Part I is described as an overview for those who are thinking about starting a money management firm. The discussion is, in fact, a compilation of brief paragraphs, generic in nature, that might have application to any new business venture.

As the author states, those who are "ready to go" can skip Part I. Those who are not ready to go can browse through Part I. They might be better served, however, if they visited a money manager's office and obtained a sense of whether or not this is an occupation they wish to pursue.

Parts II and III represent the crux of the manuscript. I would describe this as a must read for anyone about to enter the money management business. …

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