Looking At Investment Firms

by David Jenyns on June 26, 2009

An investment firm is a cooperative agency, the purpose of which is investing the contributed funds of its members into a diversified portfolio.


In 1940 the Investment Firm Act became a law, providing for strict regulation in order to protect the investors themselves; included are matters such as the outlining of basic investment policies, the publication of semiannual reports, regulation of sales practices, the minimum capital requirements, nature of debt, qualifications of directors, etc. In some cases, the very title itself may indicate the nature of the firm, such as “The Ultraconservative Bond Fund,” the “Galloping Growth Fund,” the “PDQ Petroleum Stock Fund,” etc. Investment firms are usually corporations, although a few are Massachusetts trusts. Sometimes the advice and research portion may be handled by an investment counsel firm under contract, by which all such advice and research are furnished for a stated fee. The upshot of using an investment firm is that it is practically a “hands-off” process for the investor.

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