How to Start a Hedge Fund, Your Own RIA Firm (Part III)

In the previous posts,  I covered the following topics:

Part I

• Why did you start the firm and what do you enjoy most?
• Did you have a business plan? Was it necessary?
• Costs starting and  running the practice
• How did you get your first investors?

Part II:

• License or registration requirement to start the RIA practice.
• Which one is more important to the investors? Service or performance. What are the differences between an RIA or a hedge fund
• Fee structure and average asset under management per investor

In this final part III, I will cover the following:

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• Thoughts on social media marketing

None of the panels are currently using social media such as Facebook, Twitter or LinkedIn as marketing tools.  A few of them are considering exploring the potentials in a year or two, after discussion with the compliance consultant.  One of them keeps a Facebook profile to stay connected with her client’s personal life at the client’s request.

<my comments:  hedge funds are heavily regulated as to what you can say, where you can say and to whom you can say it.   Most of them only maintain a website with client’s login portal. >

• Competition with the big shops

What sets small RIAs apart from the big shops: financial performance;  personal relationship and individual attention; more technical savvy since there’s no legacy accounting/IT system.

At the conclusion of the session, each panel shared one additional thought that wasn’t addressed in the previous session:

Start it with partners if at all possible;  expect it to be a long enduring process, but with great potentials down the road; even if your firm’s AUM grows bigger, it doesn’t get easier; there’s no immediate reward/short-term home run; it’s great to be an independent advisor, and it’s perfect for social people.

<my comment: entrepreneurship is living a few years of your life like nobody would, so you can spend the rest of it like nobody can.>

Like what you read?  Some of our other blog articles may help you as well:

1. Fund Raising:

What are asset allocators looking for in a start-up funds?

10 Tips to Raise Funds for Hedge Fund Start-ups

2. Selecting service providers

When to select an auditor?

How to select your fund auditor/tax preparer?

3. Hedge fund industry in Asia

We, at Affinity Fund Services LLC, consult with emerging fund managers to expedite their start-up process.  We also provide quality administration services at a price that will preserve your fund performance for your investors.  Please call our Managing Member, Amy Zhang, CPA, at 415 370 6208 and schedule an appointment to talk.