When considering investment options, there are many creative alternatives on the investment market today. For some individuals, the investment choice may be in mutual funds, stocks, bonds or simply putting money away in the 401(k) plan. For others, the investment may come in the form of Universal life insurance plans, spin-life investments or even investing in real estate.
If you are considering your investment options, you may want to consider the growing trend that involves the creation of your own mutual fund. While this investment option, in creating your own mutual fund, can be challenging and expensive, it can also be exciting. To start your own mutual fund, however, you can expect to be required to have, at least, $100,000 just to enter into the process of acquiring mutual fund approval.
Got your $100,000 ready? If you are prepared for this financial option, the first step in creating your own mutual fund will involve consultation with a lawyer who is board certified in financial planning and the laws as they relate to mutual funds. In addition to a retaining the services of a highly specialized lawyer, you will also need a third-party administrator who can draft your prospectus and walk you through the administrative aspects of mutual fund development.
Beyond retaining an attorney, and hiring a third-party administrator for SEC handling and investing a significant amount of cash into the fund creation process, you will also have to think about the staffing of your mutual fund after it is approved. All mutual funds require, or need a solid staff of financial professionals including a board of directors, an auditor and even a transfer agent. Identifying who those key financial individuals will be is also important before you make the investment in obtaining mutual fund approval.
Many investment lawyers recommend that you pull investors into your mutual fund concept well before the mutual fund is process is underway. As part of your mutual fund development, therefore, it is important to begin establishing who your team of investors will be. Because over $20 million in assets is usually needed just to break even with a mutual fund, your investors will be a key focus of your mutual fund’s survival and success.
As with any business or investment opportunity, it is important to consider all of your options for financial growth and development. For many individuals, especially in a poor economy, the consideration is made to develop a mutual fund of your own. In doing so, the complications associated with not only funding and obtaining mutual fund approval are often overcome by establishing the right regulatory path and through the hiring of the right financial professionals to protect and prosper the mutual fund. With investors and regulatory standards, finding another option for your investments may be the better idea in the short term but, when successful, developing your own mutual fund can become not only a financial vehicle for yourself but for your extended family as well. When considering mutual fund creation, consult a lawyer who specializes in these types of financial transactions.