Meeting with XC (Part 3)

Today I conclude with summarized notes from my meeting with financial adviser XC on August 22, 2017.

If I want to find people with a disproportionate equity concentration then XC suggested looking at Domino’s Pizza, headquartered locally, which has gone from $8 to $160 in recent years. Ford is another possibility (think of all the commuters going to Dearborn every day) along with DTE Energy and Consumers Energy.

XC is a believer in credentials: the more the better. Series 65 is the minimum requirement to manage money in Michigan but it’s given by FINRA, which is focused more on brokerages. He suggested looking into options/derivatives licenses as well.*

Hypothetically speaking, if he advised for one of my trading clients then I would be my own solo practitioner. He would not officially recommend me—doing so would put his company’s reputation at risk—but he would be interested in my performance. He would also be mindful of my fees. If I were generating a lot of short-term capital gains for a client with an annual capital gains budget then it might affect how he would manage their trading portion. The more fees I charge, the less the overall AUM, which would lower his compensation. This could be a potential conflict of interest.

If I were to pitch my trading strategy then XC said they would have to play devil’s advocate by addressing risk and liability exposure. I was not sure whether or not this was intended to be a hint.

XC recommends Schwab Advisor Services at >$5M AUM because of the useful tools they offer. At $25M AUM they pair you with a corporate relationship expert.

XC seemed like a sincerely nice person with a solid knowledge base. He was also generous with 100 minutes of his weekday time. If I start an IA then he said he would be interested to hear how I progress. If I need anything further then he invited me to call. He expressed interest in reading my blog and suggested again that I check out their website and available tools.

I took a few useful suggestions away from our meeting. I will make a LinkedIn profile. I will think more about putting together a presentation of my story and/or what I do. I will also look into whether any [insurance] companies might be looking for IAs to manage their cash position.

*–Series 3 is the National Commodities Future Examination and Series 4 is the Registered Options Principal Examination. I question the relevance of the former to trading options and I’m doubtful about the latter, which deals with supervising option traders and trading activity.