Is it legal to trade stocks for other people's accounts without obtaining a license?

Question

I am very good at trading stocks and people want me to trade on their accounts. Am I allowed to do so if I have no brokers license etc.?

Answer 1

If you are doing this out of the kindness of your heart, you're probably okay. But you need to be licensed before you accept _money_ for trading their account (especially if you lose the client's money and they run screaming to the authorities) For example, see the Illinois Securities Department's Admonistrative Rules (link 1).

In Illinois, I am fairly certain you would need to register as an Investment Adviser (after passing the Investment Adviser Examination).

But if you can bring accounts into a brokerage, and you are as good as you say, than why not work for one? Perhaps you can work your way up the business (or eventually start your own). The additional required licensure exams are not rocket science:
the basic one is the Series 7 (General Securities Representative) exam (link 2).

Good luck!

----- excerpt from link 1 ----
Section 130.221 Exclusion of Certain Persons from the Definition of Investment Adviser in Section 2.11 of the Act

Any person whose investment advice is limited to providing such advice to his or her employer as part of the employee's regular assigned duties, who receives no special compensation on account of such advice (other than salary and other compensation alternatives generally available to persons at a similar level of responsibility within the employer) and who is not held out to the public as an investment adviser by the employer is hereby designated as a person not within the intent of Section 2.11 of the Act pursuant to Section 2.11(6) thereof.

Answer 2

Yes, you can trade their accounts with a power of attorney. As mentioned in other answers, if you are going to accept compensation, you may need to be registered as either an Investment Advisor, or stockbroker.

Under most states investment advisor acts, a limited amount of clients are allowed before you must register.

Answer 3

You probably can if they give you a Power of Attorney. But you cant charge them for it unless you are registered as an investment advisor. Its not that hard to become a Registered Investment Advisor. Just take a couple of NASD exams, and get registered with the state.

Answer 4

No. The stats on determining to purchase and merchandising bills are very disappointing and something you're by no skill going to confirm marketed on previous due night television. ;-) of direction it relatively relies upon on what you recommend by utilising "determining to purchase and merchandising," however the secret's that known people usually do plenty worse than the S&P500 index while they commerce greater beneficial than once or twice a 300 and sixty 5 days. specialists do a splash greater valuable in the 300 and sixty 5 days over 300 and sixty 5 days race, yet not plenty. to place it in attitude for you, the very, very maximum suitable investors (Like Warren Buffet) have typical ANNUAL returns in the low 20% selection...and you will count quantity the billionaires in this class with arms left over...the super-rich ought to quantity one thousand or so international, yet i does not be bowled over in the event that they did not, the two. you're asking for a return 19 circumstances greater beneficial than the better of the main suitable. Is that for the duration of any respect in all probability, no. in no way. Crunching the numbers on day investors (people who close out maximum positions with one determining to purchase and merchandising day) on the different extreme yields the unhappy sorry certainty that anybody who starts off with $a hundred,000 or much less would be thoroughly worn out interior 18 months. The numbers on $10,000 are not even properly worth discussing.