December 10, 2018  
 
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Opening an Asset Management Business

It's official. You're going to become an entrepreneur and start an asset management business. What's next? The difference between failure and success could be reading this article.

No get-rich-quick strategies here. But, if you want to start an asset management business, we've got some good solid advice.

Asset Management Business

The success of your asset management firm starts with proper registration, some initial investors, and a strong team.

Regulatory Compliance Standards for Asset Management Startups

Given the potential for abuse, it's not surprising that startup asset and investment management firms are subject to strict regulatory controls and compliance mandates outlined in the Investment Adviser Act of 1940.

For legal purposes, your asset management firm is considered to be a RIA or Registered Investment Advisor. Although the rules change frequently, firms that manage less than $25 million in assets are usually required to register with the state; firms that manage larger amounts of assets are required to file with the SEC.

Since both registration processes can be complex, it's worth the cost to invest in experienced legal counsel to help guide you through the process. On the backend of registration, you'll need to prepare your startup to comply with the onerous compliance demands to maintain your status as a registered asset management advisor.

How to Secure Investors for a Startup Asset Management Firm

Asset management firms have high cost startups. In addition to typical startup business expenses, you'll need to secure a substantial amount of cash for seed capital. Depending on the scope of your business plan, seed capital requirements alone could run millions of dollars.

Unless you've already made a killing in the market, you're going to need investors and/or partners to get your asset management firm off the ground. Attracting investors isn't easy for any startup, but for an asset management startup it's crucial to design a thorough investor presentation that includes a solid business plan, accurate budget forecasts and an executable exit strategy for investors.

Staffing Concerns for Emerging Asset Management Firms

The success of your asset management firm will hinge on your ability to surround yourself with a team of talented professionals. Before you earn your first commission, you'll need to have a investment, sales and office staff in place and ready to perform at peak levels.

The need to hire aggressive and experienced sales professionals is particularly acute for startup asset management firms because you will be forced to compete against centuries-old competitors. Good sales reps can be expensive. Yet without a robust sales division, your startup will stand little chance of achieving adequate market penetration.

Proven Strategies for Asset Management Company Business Plans

The process of writing a business plan for your asset management business can be grueling. If it's comprehensive and well-written, however, your business plan will serve as a strategic anchor point and a calling card for external stakeholders.

After you have written you plan, you'll also need to develop a strategy for your next steps.

A business plan distribution strategy represents the backend of your business planning requirements. To help monitor your progress, you'll need to implement a system for tracking business plan distribution in your startup.

Take a Look at Competitors

Long before you open an asset management business in your area, it's a good idea to see how many competitors you have. Try our link below to get a list of local competitors in your area. Just enter your city, state and zip code to get a list of asset management businesses in your community.

Is the established competition doing a good job? It's important to understand their strengths and weaknesses and think through how you'll stake up against those established businesses.

Learn from Others Who Are Already In This Space

If you are seriously contemplating launching an asset management business, the next step is to have a conversation with someone who is in the business. Local competitors are not going to give you the time of day, mind you. The last thing they want to do is help you to be a better competitor.

However, an entrepreneur who owns an asset management business in another town may be more than happy to give you a few tips, as long as they don't view you as a competitive threat. Indeed, many experienced entrepreneurs enjoy offering advice to startup entrepreneurs. If you are persistent, you can find a business mentor who is willing to help you out.

Where can an aspiring entrepreneur like you find an entrepreneur who is running an asset management business outside of your area who is willing to talk?

We can help. Follow the link below, try a few city/state combos or zipcodes, and then start calling!

Leveraging the Branding Benefits of an Asset Management Business Acquisition

Startup asset management businesses typically suffer when it comes to brand recognition because unlike entrenched competitors, new brands lack visibility and history with their customers.

To compensate, one of the techniques entrepreneurs use is to buy a business to get an established brand. In the hands of marketing professionals, the process for creating brand awareness is still long and gruelling.

However, an asset management business acquisition can put you at the helm of a brand that is already highly trusted by your target market.

Don't Forget About Franchising As an Option

The odds of making a success of your new business are much greater if you opt for franchising instead of doing it all on your own.

Before starting an asset management business, you ought to check out whether there are good franchise opportunities available that might increase your chances of success.

The link below gives you access to our franchise directory so you can see if there's a franchise opportunity for you. You might even find something that points you in a completely different direction.

More Startup Articles

These additional resources regarding getting started as an entrepreneur may be of interest to you.

Recurring Revenue Business Models

Consideration Before Buying a Franchise

Buying a Franchise


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