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What % is a reasonable charge for trading stocks for other people?
Posted by admin on April 25th, 2010
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First, You NEED to go to your state’s web page and look up the requirements for Registered Investment Advisor. You may need to register with the state. You may be able to stay below the minimum number of "clients" so you won’t have to register. But check it out… If you don’t take this precaution you may very well be breaking the law the moment you begin to advise others on investing.
Second, really consider if you want to do this for your friends. I have been in the business 20 years and by and large make it a habit not to manage money for "friends" unless things are very clearly spelled out. You run the very real risk of these people suddenly not being your friends when you hit your (inevitable… I don’t care how good you may be) really ugly downturn in account values.
Lastly, and I say this with all humility because I once sat where you do 20 years ago, you also seriously need to consider if 8-10 months of "quite successful" trading qualifies you to dispense investment advice for others. Granted, it’s not rocket science, but there is definitely nuance that comes in to play when you are dealing with other people’s money. Besides that, you are opening yourself up to huge liabilities. Remember: losses bring out the worst in people; things you would never expect or can’t even anticipate with your current perspective.
Good luck to you and continued successful trading!
ps- why not investigate a career in the financial services or investment management business and go about it more directly?