Starting an Investment Partnership 247exchanges can be very time consuming or impossible without the
aid and infrastructure that a full - service portfolio custodian can
bring. Overall, I think the benefi ts of a broker in running a part-
nership far outweigh the costs.Accountant and Auditor
Any investment fund will require the use of an accountant and in
most cases an auditor. An accountant is necessary in order to prepare
the year - end tax statements for each investment partner. An audit is
required for just about every investment fund because the investors
will require one; more important, an audit protects the investment
manager against any possible issues that can arise when dealing with
other people ’ s money. However, partnerships that are starting off
with a couple hundred thousand dollars or so can probably forgo an
audit for the fi rst couple of years and just have an auditor look at the
year - end fi gure and bless them. Again, the litmus test is the desires
of the investors in the fund.
Once the partnership becomes established, an annual audit
should be done. Smaller funds usually can use the services of a
regional accounting fi rm, which often charge substantially less than
national fi rms.Quality Matters Most
With regard to investment partnerships and costs, never attempt to
sacrifi ce quality in order to save a little on expenses. In the long
run, the benefi ts of a fund that is handled by reputable service pro-
viders will far outweigh any costs savings that come at the expense
of quality. Nonetheless, there are smaller service providers that per-
form top - quality services for investment partnerships.CH012.indd 247CH012.indd 247 9/2/09 11:52:37 AM9/2/09 11:52:37 AM