Many trading platforms offer education as part of their service but this will not be in the form of investment advice unless they have the required authorisations and the staff qualified to do so. What is the difference between education/support and investment advice though?
Education and support is often described as ‘Guidance’ by the FCA and is a much broader term which includes more general information about financial products, trading systems and trading strategies. There are a number of ways that Brokers can support and help educate investors. These include;
As mentioned previously advice can only be given by those authorised to do so and there is invariably a cost associated with the offering of this advice. Some of the characteristics which define whether the information is advice rather than education are:
The support element of the service from trading platforms differs dramatically from broker to broker. Some brokers rely on the impersonal call centre model through which an investor cannot be sure of speaking with the same account manager twice and will thus have to go through the familiarisation process for each call. A smaller number of brokers such as USG UK offer a bespoke personal service through which each investor is assigned their own account manager who will oversee the investors’ account. Apart from the obvious advantages of having a professional available to the investor at any time this service also includes calls to investors to warn of possible margin calls, notification of impending important economic events and any upcoming regulatory changes.
In conclusion and in general terms; Advice is specific to the investor, and in it’s intent is to tell the investor how to act. The provision of this advice invariably comes with associated costs to the investor. Education and support on the other hand is more general and comes as guidance to the investors to assist them in making their own decisions. This guidance is usually free of charge to clients of the broker although the level of the service offered varies from broker to broker and investors should make sure they will be receiving the type of service they require before selecting the trading platform.