Does My RIA Need Live-Trading Experience? (Part 2)

Today I will continue by tying together a couple other loose ends brought up in this blog mini-series.

In Part 8, I wrote:

> And yet–-the prospect of offering complete transparency
> bothers me somewhat because others may copy it. I will
> be the first to say there is nothing new or unique to
> my trading strategy. The only thing “proprietary” may
> be that I understand it so well. That understanding

Now I realize that my live-trading experience in and of itself is proprietary. A pittance of people worldwide can claim to have the live-trading experience I do and even within the industry, few financial professionals can claim to have it.

As concluded by my last post, however, while live-trading experience gives me an edge with the strategy I employ, live-trading experience in general does not necessarily make for higher performance in an investment adviser (IA). Most IAs are salespeople rather than traders but I have yet to see “live-trading experience” listed as something to look for when shopping for an IA. The claim sounds good and may be a marketing point but ultimately, I believe a lack of supporting evidence renders it less meaningful.

If I can’t sell my trading experience as a proprietary benefit then I’m left to sell the trading strategy. I suspect this is where the slippery slope comes in with regard to marketing. If my sales pitch divulges too many details to one of the few people on Earth with live-trading experience then it could be duplicated. Those qualified to copy my approach would either be financial professionals with extensive trading experience or retail traders with extensive trading experience. Of the latter, though, few seem to offer what I do so the risk of competition is probably small.

What remains as my strongest, marketable edge therefore seems to be the common sense, well-publicized, nonproprietary trading strategy that I apply.

Does any of that make sense?

I’m not sure it does to me.