How to Start an Investment Advisory Business from a Nontraditional Background

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How to Start an Investment Advisory Business from a Nontraditional Background by David Merkel, CFA of The Aleph Blog

Another letter from a reader:


I recently discovered your blog. I read that you have had quite a long history in the financial industry and you mentioned to be running your own asset management shop as well. I currently work as a software developer but I have had for a long time a strong passion for investing and lately I have combined both of the latter. During the last 2 years I have developed my own software for simulating all sorts of quantitative investment strategies mainly for myself but at times for clients too. However, currently I am in a situation where I would like to take my hobby and passion to the next step and start working in the financial industry as a programmer doing similar tasks as I have done now as a hobby. Would you happen to have any good advice how to move forward and where to start looking for this kind of a position?

Thanks in advance,

You have to make your expertise known.  That can be through a blog, a newsletter (whether e-mail or paper), and must give people a taste of your expertise.  Be aware that to gain reader interest, clever examples will suffice.  To gain clients you will need a track record that shows the results of all decisions made  over the non-discretionary accounts you advised.

Simulated results aren’t enough.  You have to be able to show that you made actual money in real time.  Once you can do that, make your expertise known, and then follow up with those who contact you.

Many clever investors have come from nontraditional backgrounds.  I know more than a few.  I will add only this: don’t quit your “day job” before you have a sense that your investment management firm will have traction.



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