Consultant vs. Money manager vs. RIA logistics

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Sep 19, 2011 3:12 pm

Greetings.

I am just looking for some general information or thoughts. Obviously this is a message board and I take it as such.

But here is what is going on. I have a business acquaintance who is also a friend and someone that is tapped into a great social network of wealth. He has a very specific niche type investment style which consists of protecting principle and driving liquidity. He has done this for years now consistently. People are always telling him that they would like him to trade or manage their brokerage accounts.

Presently he does have an LLC but its a consulting business. However its in the IT field.

But here is what I am wondering. Under the context of being basically and specifically a money manager in terms of buying and selling investment transactions in someone's account, could or can't he do this under a financial consulting business as a consultant with trading priveleges in someone's account. In other words, say you have an eTrade account and you want him to trade your account. You give him limited POA on the account just for trading permissions. And he fills out the trading permissions form under the LLC consulting business tax ID number.

Or is the only way to do something like this as a pure money manager in terms of function and becoming an RIA? If so, how does this play out; could that scenario still work above where someone has an eTrade account and wants him to trade it.  Can he now do this as an RIA?  I am thinking that is the whole purpose of this or being independent since you would not have to be tied to one broker dealer.

Any insights greatly appreciated.

Thanks

Alex