So, if you don’t have the funds or the confidence and know how to start generating income fast, then you should better wait a bit longer before you set up your own forex brokerage as success will not come through drive alone or through wishful thinking. The white label partner provides the broker with a fully branded trading platform that includes the broker’s logo, colors, and other branding elements. The platform is customized to meet the broker’s specific requirements, including the range of products offered, pricing, and trading conditions. The white label partner also provides back-office systems that allow the broker to manage client accounts and monitor trading activity. No, it doesn’t offer the platform branding possibilities of a full or partial white label, but when it comes down to the nitty-gritty, an IB business can make as much or even more money than a private label setup.
For example, in the USA new entrants to the market who are just starting out as a white label brokerage cannot fulfill certain requirements for brokerage work . Meanwhile, Germany’s Federal Financial Supervisory Authority (BaFin) stated that 48% of European brokers are licensed in Cyprus, and only 29% have local German licenses. Mixed or hybrid model is considered the most optimal execution type for average brokers. It combines A-book and B-book, so the broker can bring the profitable traders to the real market, and processes the others’ transactions internally. At the same time, the mixed model excludes serious deposit requirements and major non-trading risks.
A white label partnership is beneficial for both the white label partner and the broker, as it allows them to expand their reach and increase their revenue. To neatly sum up the discussion, the main points to takeaway would be that starting your own forex brokerage from scratch, especially if you are not already in the forex business in another capacity is simply too much of a hassle and the mountain is too steep to attempt to climb it. A more viable option that allows smoother entry to the market is via a white label brokerage solution, be it partial, that is simpler, or full that will enable you to also accept customer deposits and allow you full power and control over your own clients. Bear in mind that there are ready-made complete turnkey solutions from reliable providers that will make it even easier for you to start your forex brokerage. However, irrespective of how good partners you find, success is still not guaranteed and none says the ride will not be bumpy or that you will not need to work hard, try harder and invest both in money, but also in time and effort. If a forex white label is not for you, you can always consider the option of becoming an introducing broker and gradually work your way up the forex business ladder if you so wish.
Given the unique advantages and disadvantages of full and partial white label solutions, it is crucial that your Forex company chooses the right one. After you complete our short form, we’ll first discuss with you your objectives and ideas; then, recommend the best solution – the one that will give your branded FX business the best chance to succeed. White Label is a special partner program allowing the partner to create their own forex broker based on the
existing ForexChief technological infrastructure at minimum financial costs. Also, WL is a reasonable solution for large
institutional brands aiming to outsource part of their business processes. Fortunately, there are still several countries that apply a more lax regulatory framework against which you could set up your white label forex brokerage. It is still necessary though, even in such cases, to be aware of the difference between your place of incorporation and the actual base of your operations.
The white label partner should also ensure that it complies with the regulatory requirements of the forex broker and the relevant authorities. Once you have identified the forex broker and white label partner, review the forex white label contract. The contract should outline the terms and conditions of the partnership, including fx white label solution the revenue share agreement, branding, marketing, compliance, and support. Ensure that you understand the contract’s implications and negotiate any terms that may not be favorable to your business. It is no secret that in the first two decades of the 21st century, Forex has seen an exponential increase in regulatory laws.
In essence, then that will need intelligent, smart, clever, innovative ways to incentivize potential clients effectively so as to seal the deal. And you will need to keep finding ways to portray your own brokerage in the eyes of customers as the one that has an edge over the rest. Due to its dominant position in the market and the fact that it has been around for so long, both brokers and traders feel confident, secure, and at ease when trading in the MT4 environment and are familiar with its numerous additional features.
To achieve anonymity between your clients and the platform provider, you need to accept deposits yourself. Besides these costs, running a white label forex brokerage entails the same costs as any other business, for example renting a space, if you decide you will not only offer services online, and pay the operational expenses of such a physical location. It is good if you do have an office, where you will be able to meet clients or prospective clients, or maybe offer training and seminars to either traders or collaborators. Having a brick-and-mortar location will add prestige to your brand, but it will obviously increase the costs. The forex trading platform is a critical component of the white label partnership. The white label partner should customize the trading platform to meet its clients’ needs and branding.
This is not said to put you off but to alert you that you should only take the next step if you are sure you are absolutely ready to take it. However, it is not all gloom provided you approach all legal and regulatory matters with due caution and care, without taking rash or impulsive decisions. The decisive factor that will determine how high a hurdle such legal requirements will pose for your white-label brokerage is the location.
Partner with ThinkMarkets today to access full consulting services, promotional materials and your own budgets. We supply everything you need to create your own brand in the Forex industry. From beginners to experts, all traders need to know a wide range of technical terms.
Another advantage is that you will gain the hands-on experience of the industry that you will need if your ultimate aim is to grow your customer base to the extent that it will make more sense for you to get your own platform and achieve economies of scale. Trading in foreign exchange (FX) markets averaged $6.6 trillion per day in April 2019 (up from $5.1 trillion three years earlier), according to the 2019 Triennial Central Bank Survey of FX and over-the-counter (OTC) derivatives markets. A lot of traders deal with the white-label Forex brokers without even knowing it. The white-label provider supplies the MT4 and MT5 server segment, software, mechanism for conducting transactions on the external market, reliable backup system, building of a global access server network, etc.
The problem with this proposition, however, is that accepting deposits directly from customers is not easy, in fact, it is particularly challenging. The first challenge is the one already touched upon and has to do with earning the trust of customers and convincing them to deposit money with a new, unknown, fresh brand. This is not easy and to have any chance in overcoming this hurdle, you need to ensure that you make available as many different deposit and withdrawal methods as possible. A white-label broker is an established company that pays commission to the white-label provider for using its infrastructure and licenses. If there are technical problems or if new solutions need to be implemented, the white-label broker appeals to the white-label provider.
It is also simpler to allow your customers to deposit their money directly with the licensed brokerage firm that’s providing your platform. In fact, if you go this route, your customers will likely feel more secure because they will know that their accounts and money are with a well known and regulated broker (not a new private label brand). Unfortunately, over the years, many clueless internet ferrets have come to believe otherwise; that a “partial white label” means a free ride in the branded Forex train. When you see the word “partial” applied to a white label solution, it is not referring to a partial/lower fee or a free trading solution of any kind.
Built by traders for traders IC Markets is dedicated to offering superior spreads, execution and service. The fact is that you’ve had a more accessible and cost effective gateway into the FX market at your disposal all along; a path of lesser resistance. I recommend that until you have good answers to the questions above, you hold off on the launch of your white label. Simply put yourself in your clients’ shoes and come up with a convincing list of incentives that will convince your customers to do business with you.