Option Fanatic, RIA (Part 11)

Today I will tie together a couple loose ends from previous posts about the value-added benefit of my trading experience.

In Part 8 I wrote:

> …there is nothing new or unique to my trading strategy.
> The only thing “proprietary” may be that I understand
> it so well. That understanding comes from… my years of
> live trading experience… None of this should be a big
> deal to financial professionals who… do this full-time.

It’s not true that any full-time financial professional can get the live trading experience that I have. As I wrote in Part 5:

> Unlike most representatives of the financial industry
> who do little more than sell products, I actually
> trade. Trading experience gives me knowledge of how
> markets really work: details most “financial advisors”
> don’t [need to] know because they are generally
> specialized salespeople with a glorified title.

I am quite convinced that most financial professionals don’t know much about live trading. Here’s one article detailing potential jobs in the finance industry. If you look closely then you might see the word “trader.” Then again, you might not.

I view this as a significant disconnect in the financial industry. Most clients think they are dealing with the people who can make them money. In fact, they are dealing with salespeople who are limited in knowledge about the precise mechanics by which money is made. Put another way, the salesperson you’re working with may know many details about your personal history and financial needs. The trader who actually handles your money knows nothing about you. Who knew?

I still go back and forth about whether this matters.

I do know that what I would do as an RIA is all about the live trading. Details about working the bid/ask, watching volume and open interest, being cognizant of slippage, implementing limit vs. market orders, how to manage contingent orders, etc., are critical for success. If only for this reason alone, I will not be worried about transparency and the potential for clients to copy and adopt my trading strategy.