Response to Series 65 Comment

A My Trader’s Journal reader, Zino, had a great comment on my post from earlier this week where I announced my plans to start studying for the Series 65 Exam.  I started to reply below his comment and finally it got so long that I decided to move it to a post of its own.  It was a thought provoking comment since he pointed out that my move to being an advisor is contradictory of what I originally set out to do.  Here’s my response so far:

Zino,
Those are VERY good questions.  When I started blogging a couple of years I had no intention of moving towards being an investment advisor, partly because I wasn’t even aware of how a fully independent investment advisor worked and didn’t take the time to learn what certifications were needed until recently.  I’m still learning and planning how my company will work, but I now understand the flexibility I can offer clients while not overextending myself.

I consider an “investment” advisor and a “financial” advisor different.  I’ll go into it more eventually with a different post dedicated to just that, but one example is that I’ll only advise on investments, not insurance or estate planning.  Most financial advisors include a sales pitch for life insurance and annuities.  I don’t plan to move in that direction from where I sit right now.  Life insurance can be very important for most people, but I plan to specialize on investments.  I still am not a fan of mutual funds that many financial advisors recommend, not counting index funds.  The fees are too high and the tax implications can be poor choices.

I’ll have to re-write my trading model page, but I’ll be sure to leave that paragraph in to show how my thought process has changed.  Along with that statement, my thought process towards my trading model has changed as I’ve learned more too.  Readers’ comments such as yours in November 2008 helped push me to hedge more often. 

The way I’ll advise clients will be for their risk tolerance, not mine.  My record since April 2007 is documented, so it will be up to my clients to decide if it qualifies me in their opinion to manage the higher beta portion of their accounts.  My gripe with the writers who don’t document their “brilliant, no risk” trades still stands.  I’ve had only one trade in the past 26 months that I haven’t documented until the next morning and it was still before the markets opened, so I’ve lived up to that commitment.  I’ll have full disclosure on how I’ve traded my own investments.  Part of my personal portfolio management includes our savings in CDs and recently bonds too and our IRAs which I trade/invest differently.

I do want to make money from my investments, but for the foreseeable future I’ll need an income too and being an advisor will allow me to combine what I’ve enjoyed in my career with my hobby.  I’ll combine the helping of people that I enjoy from recruiting and will be able to add in my organizational and documentation skills I used more as a project manager.  Both of those jobs relied heavily on communication which seems to be a common complaint I hear about financial planners who are more salespeople than investors.  My work experience combined with my 20+ year hobby with the markets (I hope) will make me a better advisor who can listen and communicate well with clients.

I started blogging to learn from those more experienced, to teach those just beginning down the options path and to share ideas with everyone.  I continue to learn a great deal from My Trader’s Journal readers.  I recognize that I will always have more to learn.  What might separate me from some financial advisors is my love of the markets rather than just someone who is a salesperson in it to make money from dumping his or her clients in whatever mutual fund his mega-company’s squawk box told him to.  Writing this blog has moved me more towards this new career more than I ever would have guessed.  When I told my wife my plans, she replied, “It’s about time.”  It just seems to make sense based on my personality and interests.

Thanks for the comments!