Legal Question in Investment Law in California

Re: Licensing requirements

Your question raises a number of business, licensing, ethical and other questions that would require you to furnish a lot more particulars before a lawyer could advise you on the legality or entry requirement for the proposed business.

For example, what kind of clients' friends and family would you be 'notifying'? Are they YOUR clients, and if so, what kind of business are you currently in? As an attorney, I could not ethically 'notify' my clients of investment opportunities, for example, in which I had an interest.

Also, how are you to be compensated, and by whom? Will you be taking a percentage commission from funds 'invested'?

It is also very troubling that you propose to have the 'payments' pass through your hands. The funds should flow directly to the depositary institution or through an independent escrow.

I think the chances that you will need either an investment advisor's or securities dealer's license for this proposed business is close to 100%. (It's also possible you would be conducting a banking business unlawfully.) In the process of studying for the requisite license you will be exposed to many laws, rules and regulatory policies that may shed a very different light on the feasibility of the proposed business.

Many reputable securities brokerage firms have ongoing recruitment and training programs, and they prepare recruitment and training literature for persons interested in a career in that industry. You might consider asking several brokers in your area for information packets. Similar material on training and licensing is available from trade organizations representing the investment advisor and securities industries, e.g. the NASD.