How can you start a new forex brokerage firm while saving time, minimizing frustration, and maximizing your return on investment?
If you’ve decided to enter the forex brokerage industry, the most important step is to first determine the type of trading platform you’ll use. If you have an unlimited budget, you can simply purchase a state-of-the-art server and a comprehensive trading platform. However, this may not be the best way to start such a high-risk business.Perhaps a more cautious approach is the better strategy. Fortunately, there are several startup options that won’t plunge new forex brokers into financial crisis.
There is a trend in today’s business world toward “lightweight” solutions. Companies have realized that their customers are tired of buying expensive hardware, which often becomes obsolete as soon as it is installed. Many service-oriented businesses are seeking to offer lightweight, easily upgradeable, and transparent solutions, and then sell them to customers as services rather than as products that customers have to purchase and install themselves.
These technologies are known as SaaS, which stands for Software as a Service.If it is necessary to deploy hardware components, one can simply purchase a replacement service contract from major global hardware suppliers such as IBM or HP. This trend is also evident in the world of forex trading platforms. Purchasing a so-called white-label (WL) solution can help reduce the initial costs of establishing a brokerage firm. Doing so also simplifies the complex logistical work that setting up such a business may entail.
This includes the client base connected to the broker, the setup of payment systems, and general system integrations. By choosing a white-label solution, new brokerage firms can leverage the experience of companies that have already established these services.
Maoz Tenenbaum, Vice President of Sales at Leverate, stated: “By engaging the services of a company that already has all the necessary systems in place, new brokerage firms can significantly reduce time and frustration while achieving a higher return on investment.”
“As a technology and service provider for brokerage firms, we’ve received numerous calls from clients who want to offer their customers the best trading platforms on the market but lack the necessary funds to implement a full-scale solution. Whether it’s the MetaTrader platform hosted on our servers or a comprehensive solution covering all aspects of their operations, the white-label solutions we provide to brokerage firms can address these challenges.”
The only cost borne by the new brokerage firm under a white-label agreement is the monthly rental fee charged by the existing brokerage operator. In addition to this, an installation fee is typically charged, which covers the cost of configuring the new firm’s server equipment.
As with establishing any complex business operation, white-label solutions have both advantages and disadvantages. However, with a professional business plan, strong drive, and a visionary strategy, a new brokerage firm can launch within a few months under this model. The reduced costs allow the new brokerage firm to focus more on business development.
By relying on “parent company” services, maintenance becomes less of a headache. If the system malfunctions, all you have to do is call the maintenance team. If they can’t fix the problem, they don’t get paid. And that’s a tried-and-true business model.
On the other hand, white-label solutions also have their drawbacks; for example, new brokerage firms will start out on a small scale and therefore won’t be able to handle a large volume of trades or clients.
As your brokerage business grows, you’ll need to lease additional server services from established brokerage firms.
Ultimately, the financial situation will leave the new brokerage firm with no choice but to purchase its own complete system and achieve a massive leap forward in its business.
Purchasing services from a large company may also mean that you are one of a number of small brokerage firms competing for the attention of large enterprises. Once you decide to purchase your own platform, you’ll find yourself sharing resources.
In short, WL is undoubtedly the top choice for those new to the brokerage industry. Many top brokerage firms started out using this model. This model helps you overcome initial technical challenges, allowing you to then allocate your valuable resources to marketing and other promotional activities to attract more clients and generate greater profits.
“Leverate’s clients have the opportunity to take the golden path into the world of forex,” said Maoz. “They can fully own their trading platform and have complete control over every aspect of their business, leveraging our customization options or choosing a more affordable white-label solution as a stepping stone.“Our WL option also includes other services related to the trading platform, such as payment processing, regulation, and risk management, enabling clients to succeed in today’s competitive landscape,” he added.
