Trading Education's Role in Fostering a Competitive Advantage

Any area where you want to have a key, long-term competitive advantage, requires control over its future path, influenced by

When you’re starting out as a small company, you have to define your focus areas ruthlessly. What is your true competitive advantage? Is it pricing, technology, your own staff, unique marketing channels, regional brand awareness, customer service and CRM, your own network of clients, your own ability to read the markets and trade, educational content or something completely different?

Only if it is your ability to be faster than anyone else at recognizing new trends and working with the best new solutions taking advantage of those trends can you afford to outsource everything and still be successful. On the other end of the spectrum, you are very likely to fail if you try to do everything yourself since your quality in each area will consistently lag behind the market leaders in each area.

For most banks and brokers this implies that they will not focus on education as their core competence and therefore they would rather buy or license that part of their value proposition.

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How to Keep a Sustainable Competitive Advantage

Any area where you want to have a key, long-term competitive advantage, requires control over its future path, influenced by your own learnings. If you’re a liquidity provider, you are not going to outsource your technology in the long-run. If you’re a trading software provider, you’re going to manage your new feature development in-house. And if you’re a retail broker with a marketing focus, you’ll have a strong business intelligence and analytics department.

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If you want to be different by educating clients, you’ll need your own team of charismatic trading educators, instructional designers, video creators, and editors and ensure that they have sufficient exposure to actual customers. This can be challenging next to your brokerage operations, but since a lot of the skill sets between your own trading floor, your marketing department and education overlap, it can make sense to invest more into education from a certain company size onward.

Hybrid Solutions

When I imagine being responsible for a medium-sized brokerage, the most promising solution appears to be a third one: don’t be the next broker producing a mediocre academy explaining Forex 101. Plenty of brokers and education companies have done so and joining their ranks will not help you stand out. License that from someone else whose content quality you find convincing.

You also won’t succeed if you are trying to compete with an online trading school in terms of breadth of advanced content. Focus instead on producing one very high quality course in a core area of your expertise and align it with your marketing. For example, if your brokerage offers especially low spreads for one financial instrument, produce an in-depth course on how to trade it in various market conditions and become known for that by distributing this course with your branding to other platforms.

Think beyond classic video platforms where you’ll be mixed up with non-financial topics and focus on educational marketplaces for the financial industry instead who might even be able to advise you on the course topic and unique ways to produce it. This way, even a limited budget can help you make a true impact in the trading universe.

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