Giving Advice

allenm

Junior member
Hi

I have been trading derivatives on the equity markets for twelve months and returning very good profits.
There are a large number of people wanting me to invest on there behalf. I intend to setup a company to allow me to do this without being FSA regulated. I am not soliciting for investors but my question is this..

Is it possible to put advice on my webite without being FSA regulated, would the site have to be hosted abroad or members only etc..

Thanks for your help
 

Trader333

Moderator
You cannot invest other people's money without being FSA regulated let alone put advice on a website. You are leaving yourself wide open to all sorts of legislative tangles. What if you lose all of their money and they suddenly decide to sue you for not being FSA regulated etc ?

I would suggest quite simply dont even consider doing this as it is you who will get the brunt of the law when, as is inevitable in my view, it comes back to haunt you.


Paul
 

dc2000

Veteren member
If you trade on behalf of people you will need FSA approval unless the fund is based offshore but that opens a whole new can of worms as for a website you are allowed to show data and graphs and let the user deceide for themselves but as soon as you say I would be a buyer at x level or seller at y level then it is deemed a recomendation and you need to register.
 

allenm

Junior member
Thanks for your response so far guys..

with the point about investing other people money that is not technically what I intend to do. The company will invest and there will be a number of shareholders who own the company negating the need to FSA regulated
 

dc2000

Veteren member
Hi Allenm I did similar with rental property, make sure you are aware of the requirements of the money laundering laws
 

BBB

Experienced member
What if you get your customers to sign a declaration that there can be no comeback if the money is lost?

Whats the problem with FSA regulation? Does it cost an arm and a leg?
 

neil

Legendary member
Your money in unregulated hands?

BBB said:
What if you get your customers to sign a declaration that there can be no comeback if the money is lost?

Whats the problem with FSA regulation? Does it cost an arm and a leg?

Why fear regulation. If you were an investor you would prefer the people handling your money to be regulated/qualified? :eek:
 

BBB

Experienced member
Thats a valid point Neil. However, due to the increasing amounts of regulation, those paper shufflers down at the FSA impose on managed money, it is becoming harder for them to make attractive returns in relation to what an unregulated money manager can achieve. This is mostly because they are forced to hedge and diversify a lot more than you or I would.

Also, do qualifications make one a better speculator? Not IMO! It just means you have a bunch of academics sitting round discussing 'theory'.

I dont mean to over labour my point here, but the average regulated manager will return around 30% pa. A good trader should be able to do that in a month.
 

theknifemac

Well-known member
I think the point with FSA regulation is that it is costly and takes a number of months. I believe you need to have a separate compliance officer to look at compliance issues. Not sure if you can form a limited company, have people buy shares / invest in the company and then have the company trade.....it's an interesting idea but I guess its not that different from the funds offered by the big boys and they are regulated.

Let us know if you find out more.

Stew
 

Trader333

Moderator
Posted by BBB ......It just means you have a bunch of academics sitting round discussing 'theory'.
.....

Now where have I heard that before ?

Ah yes it was in Eurozone and more specifically "Brussels" wasnt it


Paul
 

rodben

Newbie
I have joined to-day my name is rod. which software package do you recommend. Can I make money? and do you recommend that I do lots of chatting and studying first. I just need some basic guide lines to get me started. I can afford to wait and I would rather learn to walk before I try to run. Thank you.
 

chump

Senior member
Rod,
Welcome, go to first steps thread and view the first post theirin to get your preliminary questions answered and many others.

Cheers
 

rodben

Newbie
:LOL: undefined
rodben said:
I have joined to-day my name is rod. which software package do you recommend. Can I make money? and do you recommend that I do lots of chatting and studying first. I just need some basic guide lines to get me started. I can afford to wait and I would rather learn to walk before I try to run. Thank you.
 
FSA also = Financial Services (and Markets) Act

allenm said:
Thanks for your response so far guys..

with the point about investing other people money that is not technically what I intend to do. The company will invest and there will be a number of shareholders who own the company negating the need to FSA regulated

The Financial Services Act also regulates the process of raising money from investors into a company. If you solicit investment, there are plenty of regulations which apply to your activities. Take legal advice before you get into a position where you fall foul of the law.
 

foenne

Newbie
If somebody of your family/friends 'give' you money to do something you don't have to be regulated I think! So if you invest with these people their money as a favor, nobody cares about it! And these days the term friends can be used very easily!

BUT something you have to do is: don't forget to tell these people that it is possible that you their money! Telling once maybe isn't enough, twice is better,... If they want their money on a secure place, the only place is on a bank account or something like that!
 
foenne said:
If somebody of your family/friends 'give' you money to do something you don't have to be regulated I think! So if you invest with these people their money as a favor, nobody cares about it! And these days the term friends can be used very easily!

BUT something you have to do is: don't forget to tell these people that it is possible that you their money! Telling once maybe isn't enough, twice is better,... If they want their money on a secure place, the only place is on a bank account or something like that!

This advice from foenne is 180 degrees wrong, at least as regards the law in the UK (about Belgium, I don't pretend to know).

If you are going to hold yourself out as being able to do something to earn a return on people's money, it does not matter a jot if you start off by being friends (particularly if the term "friend" is being used "very easily"). If you then fail to earn the advertised return on it, or even lose money, you will not only not finish as friends, but may find yourself in the dock. Of course, people constantly give a friend money to put on the 5.30 at Newmarket, and this is unregulated. If they give it to the friend to put on a horse of the friend's choice, again no problem. But if the friend offers to do them a favour by demonstrating expertise at picking winners, that is less clear. And if he sends round an email to his acquaintances offering to invest their money for them, that is a regulated activity (and he has probably already broken the law on financial advertisements).
 

Nildes

Active member
I think you're mad. The regulations were put in place to protect investors. Anyone seeking to circumvent them will be seen as perhaps attempting to indulge in criminal activity.
Forming a company provides very little protection for you since, if you have care and control, you have de facto rsponsibility and you can be sued....especially if it can be shown that incorporation was a device to circumvent the law.

What do you get out of it? Why got to all this effort, take all these risks with the regulatory authorities?
All to do some friends a favour?
As others have said, they won't be friends if you start losing.
To do family a favour?
Even worse. When money problems come between kin the bitterness can last generations.

Lilke I said at the start.........you must be mad!
Sorry

Nildes
 

foenne

Newbie
I never said that he has to do some publicity with his friends, these people are asking him to invest their money so there is no need for any advertisement!

Idd, it will cause some trouble if you lose that money anyway! Therefor I said, you have to say to these people, that it is always possible that he is losing (a part of) their money!

[edit]
It seems that I have made a mistake! It seems that it isn't allowed! Therefor these forums are out there I guess: to learn what is right and what is wrong! Thanks anyway!
[/edit]]
 
Last edited:

SOCRATES

Veteren member
Nildes said:
I think you're mad. The regulations were put in place to protect investors. Anyone seeking to circumvent them will be seen as perhaps attempting to indulge in criminal activity.
Forming a company provides very little protection for you since, if you have care and control, you have de facto rsponsibility and you can be sued....especially if it can be shown that incorporation was a device to circumvent the law.

What do you get out of it? Why got to all this effort, take all these risks with the regulatory authorities?
All to do some friends a favour?
As others have said, they won't be friends if you start losing.
To do family a favour?
Even worse. When money problems come between kin the bitterness can last generations.

Lilke I said at the start.........you must be mad!
Sorry

Nildes

You are absolutely right Nildes. Yours is the wisest comment on this thread.
No one, but no one is deserving of advice, of any sort, whether matrimonial, social,
behavioural, with regard to trading, alcohol, dress, or even recklessness in drivng or whatever.
Why ? I will tell all of you why. People in the end analysis do what they want to do, even, and horrifyingly so, even, when they know it is wrong or the wrong thing to do.
To give any trading advice is a disaster. Many years ago a close friend asked me to help
him. I did so. I picked trades for him that were absolutely on the button. I told him when to
go in and when to get out. This went on for several weeks. I was very pleased to have been able to improve his lot, you understand, because for me it was very easy, only to find out
that none of it had been done. He had maintained this charade "only to find out if I could
be consistently right ". Now that he was satisfied he wanted more. So I stopped, because
I was made to realise that if you advise and it goes wrong it is your fault. If you advise and
it goes right, it is as if you never advised. And in addition the person you advised is likely to
go off and boast it was all his idea anyway. My conclusion is that the great majority of
humanity are not worth the effort. Even experts have to suffer bufoons arguing with them.
Let us all have a quiet life or find a way to prevent others trying to argue with us.
Discussion amongst intelligent people is a different proposition altogether, but to have to
struggle with dunces is an awful experience. For my sins, I have that experience.
Experience is the consequence of making mistakes, but having the ability to learn from them
so as not to be condemned to repeat them. All experiences are formative.
 
 
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