Many people now want to be an entrepreneur and one type of business to start is a wealth management firm, where you make profits by managing assets for the wealthy. Many former executives of large banks do this such as Gregg Hymowitz, Michael Horowitz, and Mark Fife, who left Goldman Sachs to create their own firm, Entrust Capital Inc.
Things to consider when creating a Wealth Management Firm:
Do you have the experience?
When he left Goldman Sachs to start Entrust Capital, Gregg Hymowitz was a Vice President in Goldman’s private client services group. Together with his partners, Gregg Hymowitz had received about $15 million in commissions within a year. Hymowitz had created a track record of positive portfolio management and was able to bring this experience to his new venture. Before starting wealth management independently, be sure to have the experience that will allow you to create positive returns for your clients.
Where will your clients come from?
Knowing your anticipated profit and potential clientele will help you to understand how to run your wealth management firm. Clients with greater wealth will provide access to more capital for your firm. Although it may seem ideal to go after the wealthiest clients, ensure your firm has the capability to manage large assets. Some wealth managers bring clients from their old firms, and others use word of mouth to find clientele. Either way, it is necessary to create a strategy of how you will find and retain new clientele.
What will be your investment strategy?
Once you obtain clients, there are multiple ways to go about managing their assets. A firm can focus on investing in a specific industry such as technology or pharmaceuticals, or they can take a more general approach to investing. There are numerous investment vehicles that can be used to create a positive returns for clients. It will be up to the management team to find the method that best utilizes its skills.