Ready to start a business that’ll engage investors and benefit aspiring companies.

Help yourself, your clients, and the broader economy by setting up your own private investment firm. You’ll use financing to build a brighter future for many businesses while you expand your portfolio.

Despite these benefits, it can be challenging to know where to begin. That’s why we’ve laid out each step to make it straightforward for you.

This guide discusses how to start a private investment firm, which includes:

  • Planning
  • Set-up
  • Management

How to start a private investment firm


The first significant stage of how to start a private investment firm is planning structure and strategy for the business. The decisive direction of your firm will help you present it professionally and attract early clients.


You must register your business with the UK Government to start a company. With this, you should decide which legal structure to use:

  • Sole trader — quick to set up, but you are legally liable for the business’ debts.
  • Limited company — you are separate from the business legally, so aren’t liable for its debts but it can take longer to set up.

The value of investments often relies on local economies, which can change quickly (e.g. during a pandemic). So a limited company may be an option that limits your loss to the money you put into the firm.

In addition to business setup, you’ll need to apply for authorisation from the Financial Conduct Authority to promote services to the public. This legal requirement can take up to six months, so take this step in advance.


If you’re launching a private investment firm, you likely have a banking or financial services background. Your experience or qualifications will improve your ability to get investors to trust your credibility.

There may still be areas you have limited knowledge, so look at online courses related to your business to help you prepare. Free courses are available from The Open University.

If managing a business is new to you, Countingup is a business account with built-in accounting software. It makes company finance quick and convenient through an app, so you can focus on trading.

Fee structure

An essential element to consider is how your business will make money. Establish a fee structure to decide how much to charge each client.

It’s common to introduce a management fee out of the capital investors have put in. Your management fee could be 1%, so if you raise £500,000 in a month, you get £5,000. 

In addition to a management fee, carried interest is an agreement of performance bonuses if client returns exceed certain levels.

Your fee structure will influence whether investors use your firm. If fees are too high, they may go to a competitor. But make sure your business can still profit, so find a balance.

Contingency plan

Events or scenarios could significantly impact your investments. That’s why it’s helpful to adopt contingency plans.

These are actions to take if a situation happens. Plans help prepare your business to minimise the effect of problems and react well when they arise.

For example, a sudden conflict in a country that supplies oil may cause the price to skyrocket. That might mean the value of oil-reliant businesses plummets quickly, which could lose your investors money.

With a contingency plan, you can plan to monitor world events and sell stock in companies likely to be affected. 

Investment strategy

Many private investment firms focus on particular industries to help stay updated on changes and attract clients interested in those areas.

For example, you could focus your attention on environmental technology and renewable energy. 

Also, decide which countries to invest in, as they all have different investment laws. The Financial Conduct Authority enforces rules in the UK. In the US, it’s the Securities and Exchange Commission.


With a plan ready, the next steps in how to start a private investment firm are vital set-up areas. Get your business running smoothly and ensure you have everything you need.

Business plan

For private investment firms, a business plan is crucial to take on investors

For more information on how to write a business plan, see: How to write a business plan.

There are essential additions to consider alongside usual business plan points.

One of these is the fund’s timeline. A clear timeframe from when you begin investing, to when you exit the portfolio. Typically, funds run for ten years, detailing what will happen over that time.

Other information investors want to know, includes your strategy for growing the firm over time. It’s essential to consider where that could come from, for example, new investors or current ones contributing more.

Market research

To get your business plan and proposal in front of potential clients, you need to reach them. The best way is to market your services.

Research your ideal customers through surveys and interviews with the public. You might find that certain income groups are more likely to have the money to invest with your firm.

Another source of information could be to look at other similar-sized investment firms. Find these online through searches, and check which ones focus on the industries that align with your strategy.

Competitors‘ sites and social media pages will show how they market themselves. Look at the types of customers they target. Similar people may be likely to engage with your business.

Marketing channels

Through research and investigation of competition, find similarities between your ideal customers. These can help you visualise your target audience, who can then become the focus of any marketing activity.

To put your information to use, think about the daily lives of your target audience. A helpful way to do that is to write customer profiles (sometimes called customer avatars), which are summaries of hypothetical clients’ habits.

Customer profiles can include:

  • Name
  • Age
  • Gender
  • Occupation
  • Income
  • Lifestyle

Think about which marketing channels would reach your audience with that information. For example, suppose your customers have high earning roles and use social media. In that case, LinkedIn may be a great way to target them.


Your brand is how the public views your business, and that identity may play a role in encouraging clients to trust you. It’s essential to design your branding around your ideal customers and align with their values.

For example, if you focus on investments in ethical businesses, then reflect that through your own brand.

Your branding can include:

  • Name — first impression of how people view your business.
  • Logo — icon to represent your brand.
  • Fonts — use consistent typography throughout your business.
  • Colours scheme — establish your recognition with three or four colours.
  • Tone of voice — decide how you would like to communicate with customers through your words.

A strong brand has more memorable marketing, which leads people to think of you when they want to invest. Over time your brand could charge higher fees if it’s well-known.


For a successful investment firm, decide where to establish your office. You might find that you’re able to work from your home, but even that will come with costs.

To seek a location, consider whether to host clients to see your operations and have meetings. In that case, a physical office is likely to be a good option, but you will have to find somewhere accessible.

Think about public transport links or parking, for example. A location within a major city would help you establish yourself among other financial institutions. Still, it may have high rent and utility costs.

Even if you work from home, you might find you use more electricity and demand more from your broadband. Expenses can quickly become a problem for your business if you struggle to keep track of them.

Countingup is perfect for managing your costs. Its expense categorisation feature automatically sorts them into HMRC approved labels. That means you can see where the money goes on your utility, rent and wifi costs.


The final set of stages on how to start a private investment firm revolves around management as a business. These are considerations that you could face in the day-to-day running of your company.

To be able to keep up with the demands of managing a portfolio, engaging with the client and marketing your services — you’ll need an array of essential software.

Trading – IG

IG is an online trading provider that allows you to buy and sell stocks through its mobile app, website or specific software available for your needs.

Software IG offers includes:

Workload – Google

Another helpful set of software is from Google. Their Workspace collection helps you create presentations, take meetings, and produce documents. Online storage also means you can access everything from your phone or computer whenever you need them.

Google’s software includes:

  • Google Slides — great for preparing a pitch deck to take on potential clients.
  • Google Docs — can let you quickly write up contracts and legal documents.
  • Google Meet — hold virtual meetings with your clients.

Content – Canva

Your marketing activities may benefit from social media posts about your services to encourage future clients. To make the content creation process more accessible, use the online software Canva.

It has plenty of social media post templates for you to use. You’ll be able to add graphics and text to images, to create quality posts quickly. 

Social media platforms like Instagram and Twitter see trends emerge quickly, so Canva’s ability to help produce content quickly is essential for reactive marketing.

Financial management software from Countingup

A successful business needs to manage its finances to grow and avoid stalling operations. Mismanagement could mean that you can’t afford to pay for things like marketing, for example, which restricts your ability to bring on new clients.

The perfect solution for financial management is an easy-to-use software that makes it simple. Countingup is a business account with built-in accounting software which includes a wide range of helpful features.

Receipt capture

You might decide to put on an event to attract clients to hear about what you do. You will likely buy some event essentials in physical stores and the process of recording those costs can be time-consuming.

With Countingup, use your phone camera and scan your paper receipts. It will add those billings into your accounts so you can do it before you even leave the store.

Cash flow insights

When your costs outweigh your earnings, that can mean you don’t have the money available to keep the lights on. What if you can’t afford your wifi payment? Your business will stop until you pay it.

With Countingup, you’ll be one step ahead. Its cash flow insights feature can update you on everything in your business. You’ll keep on top of the money that comes in and out.

Tax estimates

At the end of the tax year, you’ll need to carry out your income tax Self-Assessment. Going back through the year could be complicated to work out how much you spent.

Countingup can solve that issue with its tax estimates feature, which tells you how much to put aside throughout the year. You are already ready to file your taxes by the end of it.

Get started for free.