One of the types of fast-growing entrepreneurial activity are brokerage companies.
In essence, these are firms providing special services to improve the efficiency of the financial activities of clients (customers).
Today, brokerage services are widespread in insurance, foreign trade, logistics and financial sector. Many aspiring entrepreneurs are wondering how to open a brokerage company.
Business planning
The first step is to draw up a clear business plan. It is worth paying special attention to such important components as the customer base, investment volume, profitability, staffing, wage fund, taxes, marketing budget, market assessment. These parameters directly depend on the field of activity that the brokerage company is focused on.
It is very important to know that according to the law of the Russian Federation, opening an office of this kind is required to be licensed, which means that you must first pay a fee and submit an application to the relevant authorities. Regardless of the field of activity, the principles of creating a brokerage firm are the same.
How do credit brokers work?
Today, consumer loans are especially popular. Loans for the purchase of used cars are slightly less in demand. Lowest demand for mortgage loan support services.
In most cases, such offices charge clients either a fixed fee or a percentage of the total loan amount. Therefore, you should not immediately rush to extremes and look for an answer to the question of how to become a mortgage broker; first, think about whether it is worth it.
Organizational and legal form and real interaction
The law provides the broker with absolute freedom to choose the legal form (OLF) for his company. That is why, before opening a brokerage company, weigh all the pros and cons in advance and consider registering both as an individual entrepreneur and as an LLC, CJSC or, possibly, OJSC. The choice of OPF significantly affects the reputation of the company, the amount of taxes, as well as the level of control over the company’s work.
There are also certain requirements regarding the amount of authorized capital that the owner must have. Think for yourself: how to open a brokerage company without funds in circulation? No way. Therefore, for example, a financial broker stock market must have an initial budget of at least five million rubles.
Little nothings of life
After meeting all the necessary conditions, you should contact a business registration company that knows how to open a brokerage company from scratch and at the lowest cost. This is where they will help with all registration issues. Well, the last thing you need to open brokerage office, is to search for premises and select qualified personnel. If you don’t have a client base, you should contact an advertising company for help.
So, what needs to be done to start a successful activity:
Rent a room;
Register a business;
Open a personal bank account;
Have registration documents certified by a notary.
How to introduce yourself in the services market?
This is a question that requires detailed study. Despite the fact that brokerage activity is developing rapidly, the level of entry into this area of business amounts to tens of millions of dollars.
This means that to apply for yourself as a new broker you will have to spend or reserve this amount.
Of course, for an experienced specialist who understands the high profitability of brokers and at the same time has the necessary capital (his own or attracted on favorable terms), opening a brokerage company is a completely acceptable solution (if there is a well-coordinated team of professionals).
But in most cases (and this is what about 80 percent of all novice entrepreneurs in this field of business do), it is more profitable to ensure long-term cooperation with one of the major partners. To do this, you need to select large brokerage companies as partners that have already managed to gain a good reputation and win the trust of clients.
Interaction with a partner allows you to solve many problems with the greatest efficiency
The company's activities must comply with international or federal standards. Company employees are required to obtain special certificates that confirm their high qualifications as specialists, they mandatory undergo training and certification, which, of course, affects all areas of the company’s activities, as well as its financial results.
Brokerage products are received ready-made. Only commissions for their use are paid. It’s very convenient: instead of investing directly in the development of these very products, you only have to spend money on commissions.
Forms of cooperation
Today there are three main forms of cooperation:
1. A brokerage firm operates as a regional branch of one of the large brokerage companies.
2. A subbrokerage agreement is concluded in relation to the parent company.
3. The organization acts as an agent of some holding company. In this case, it does not matter whether the holding is domestic or foreign - in this field of activity everything is already provided for and surrounded by relevant legislative acts.
Of course, costs will increase significantly when moving from the form of cooperation under the third point to interaction under the first point, but do not forget that along with expenses, income will also grow, and at a faster pace!
The main stages of creating a business plan for an insurance broker
1. Decide on the type of organization. To date the best option is considered to be opening a brokerage company as a sub-broker rather than an online broker. A subbroker is an organization that actively cooperates with other, already established economic structures. This allows you to minimize everything possible risks and costs for the implementation of business ideas and increase business profitability.
Among the most common options for registering such a business is opening an individual entrepreneurship or a limited liability company.
But a company registered as an LLC will look much more respectable in the eyes of the client, and in the event of financial problems, LLC participants are liable only within the limits of their authorized capital.
Should I open my own company?
It is worth noting that a brokerage company is not a cheap and not the easiest business, so there are at least three ways to start such a business. In addition to the fact that you can open your own brokerage firm, there are also options for organizing a branch of a large brokerage company in your city (this can be either foreign or well-known domestic company), and also become an agent (sub-broker) of another large organization.
“More expensive” than anything else. But if you open a branch of another company, then almost all financial concerns fall on the parent company (office equipment, advertising, etc.), so you will have to prove the feasibility and payback of such a company under your leadership.
In this case, you will not become the owner of the business, but rather its partner, and the parent company will have every opportunity to control your activities.
More attractive option– enter into an agency agreement with a large company. You will divide the costs of opening a branch in half, you will receive a brand famous broker and its analytical resource, and the company - a stable percentage of your income.
However, now we will talk about what needs to be done and how much to spend to build a brokerage business from scratch.
Licensing of a brokerage company and authorized capital
In order to provide brokerage services, a company needs a special license. To obtain a broker or dealer license, a company must have own funds in the amount of 10 million rubles.
If you also plan to carry out trust management of your clients’ capital, this amount increases to 35 million. And finally, depository activities require the company to have an authorized capital of 60 million rubles.
The licensing process itself brokerage company is not particularly complicated, you need to fill out a form and submit an application to the Federal Service for financial markets Central Bank of Russia. Registration of the license will take approximately two months.
Office
It goes without saying that a reputable company to which people entrust their money should have an appropriate office. The most valuable investment is computers and software for smooth trading.
In addition, you will need a large TV to keep up with official news, a printer, good internet and telephone communications, scanners and other office equipment.
It is necessary to equip 8-10 workplaces. Three of them will initially belong to employees, the rest will be for clients. Square office space– from 50 square meters.
Personnel and monthly expenses
For the first time, three or four employees are enough. Consider that take a post general director Can only be done by a person with at least one year of relevant work experience and a qualification series 1.0 certificate. Sometimes, in order to obtain special licenses, it is necessary to have several employees with such a certificate on staff.
One more point - accountants or system administrators are rarely hired at a brokerage. Most often, accounting and computer services are outsourced in order to save money.
The company's monthly expenses will be approximately 200-250 thousand rubles.
Profit
The most advantageous is direct sales and a course to work with wealthy clients, but the company receives interest from transactions, and therefore it makes sense to start by attracting a large number of small buyers. Another source of profit is training clients through seminars and special programs.
Regarding income from the company, then active work and availability large number clients, it can pay for itself in 3-5 months and generate a profit of about 300-400 thousand rubles per month.
Despite all the difficulties in opening such a business, brokerage is a business that is gradually expanding, and is not yet very widespread in our country, so there is a real opportunity to gain a competitive advantage.
Force majeure and outright fraud in the FOREX services market do not in any way reduce the popularity and relevance of over-the-counter markets in the eyes of clients from the CIS. Citizens of Russia and Ukraine continue to consider high-risk instruments as their main investment idea, and mmgp.ru remains at least four times more popular than the smart-lab.ru forum (according to Alexa Rank data in Russia).
Demand creates supply, and every year more and more new brokers are born, whose development is watched literally by many investors live. Such projects that have gained popularity over Lately even before birth, include PrivateFX, Gerchik&Co and ICE FX.
For some reason, the contribution of the founders of some companies is sometimes overestimated already at the opening stage, and at the end we often get an unremarkable yet another dealing center. How much does it cost to organize such an office, and are the costs of opening a new broker really that high?
- Company registration;
- Opening a bank account;
- Liquidity providers;
- Website development and other expenses;
- Conclusion.
Broker registration
I've been running this blog for over 6 years. All this time, I regularly publish reports on the results of my investments. Now the public investment portfolio is more than 1,000,000 rubles.
Especially for readers, I developed the Lazy Investor Course, in which I showed step by step how to put your personal finances in order and effectively invest your savings in dozens of assets. I recommend that every reader complete at least the first week of training (it's free).
Let's break down the costs of organizing such a thing, with small assumptions. popular business. The first point after selecting a CEO (let’s set his salary at $1,000 per month) for the broker owner will be the creation of a parent company and its incorporation. We will leave civilized jurisdictions like the USA, Great Britain and Australia alone as an expensive, useless undertaking. Civilized jurisdictions are not suitable for domestic investors, interfere with the existence of the usual PAMM and LAMM trust management schemes, and limit the methods of deposits and withdrawals Money. Cyprus seems to be some kind of intermediate option, but the offshores of the Caribbean are much calmer for the creator and more interesting.
As the main one, I will use information from the website of the international law company Heritage Group (heritage-offshore.com). This is an ordinary intermediary between Russian-speaking clients and local registrars, unremarkable. The largest such service in RuNet is offshorewealth.info. However, the information of the latest service is complexly structured, and the prices for services will differ slightly.
The British Virgin Islands is the main harbor for offshore business. In some industries, up to 60% of the world's companies are registered here. Abroad, BVI is the most likely choice for a new broker, among companies with domestic roots the most a shining example serves as a FIBO broker. However, this jurisdiction is not very popular in the post-Soviet space.
Saint Vincent and the Grenadines is a more famous and popular option, largely due to the presence of pseudo-regulators on the territory of the state. In fact, in this jurisdiction you can get an extra piece of paper for one thousand dollars, which is not burdensome for the broker’s organizers. Amarkets followed this path, and Alpari also has a structure in the group of companies registered in the specified offshore.
In general, Alpari, during its rapid activity, managed to try the financial regulations of most famous countries. Today there are them in Belize structural subdivision. Belize is not just the cheapest option for incorporation, it is also the most loyal to company owners in terms of trials and litigation, the easiest option for obtaining a more or less decent financial license.
If a simple company in Belize costs $1,549, then sophisticated broker creators with one will have to shell out $26,724 (including opening a bank account). Plus, the annual costs of maintaining a licensed company will, of course, be significantly higher.
Opening a bank account
The second point in terms of organizing a broker will be opening a bank account. This point is important both when working directly with clients and when collaborating with electronic payment systems.
A bank account does not have to be opened in the same jurisdiction where the company was registered. Moreover, paperwork with overseas banks, coupled with the language barrier, can significantly complicate the operational conduct of business.
Most FOREX brokers open accounts in the friendly Baltic states. Latvian banks Rietumu and Norvik are especially popular. The cost of opening an account will be $499, plus the costs of document management and apostille of documents, which rarely exceed $250. In addition, you will need an additional personal current bank account to withdraw profits in the form.
Liquidity providers
Thus, we get a ready-made company with a bank account ready to accept payments from clients. But can they start trading? We need liquidity providers with whom we can cooperate in two ways.
The first way. White label partnership with a reliable broker with low spreads. Most brokers have such programs. Entrance can be free; the cost of postage and apostilling of contracts will be taken by analogy with the previous paragraph ($250).
The second way. Independent brand independent exit to banks, consortiums or liquidity aggregators. The most important thing in this case is the need to independently purchase and maintain a trading terminal. By default, you will need and will have to closely communicate with MetaQuotes Software Corp. The cost of a trading terminal, depending on the components purchased, ranges from 50 to 150 thousand US dollars. Maintenance costs – minimum 10 thousand dollars per year. Let's add here the same postage costs of 250 dollars.
The question of priority is a philosophical one. Saving on a terminal is extremely tempting for a young company, but its own service allows you to realize all the capabilities of b-book and recoup your investment many times over in the first year. Don't forget that more than 90% of traders lose their money in the market. Your own terminal allows you to win due to these losses, it’s simple.
Website development and other expenses
The next step to successful work There will be a website development. Actually, this is the most important marketing stage, from which you cannot hide. A dealing center is an Internet business, and the website will be the face of the business, a meeting place for clients with consultants, a bulletin board, and a resource for downloading a trading terminal. Domain name, hosting, server protection seem to be initial costs, then development personal accounts, database integration and more. We keep in mind that the site can be improved in the future, but first we need to get started as quickly as possible. Based on my experience, for 10 thousand dollars you can launch a discreet resource. The question is the company's PR and proper coverage of the process.
Separately, it is necessary to link bank accounts and the system for accepting payments from clients. There is a merchant account for this. Unlike online stores, FOREX business, along with bookmaking, pharmaceuticals and goods for adults, appears to banks to be risky and unreliable. From payment systems, a client’s complaint can result in significant sanctions, so banks are very sensitive to the process of connecting new brokers to the system. You will have to pay 5-10 times more than an ordinary non-risky business, namely $2,500. We will include in this amount the costs of postal needs, verification and apostille of documents.
The last expense item. Marketing, broker promotion, advertising. These are ridiculous expenses; hundreds of millions of dollars can be spent on these purposes. Or you can get by with a brand name/media person, a previously promoted blog, or the wreckage of an old project that left behind questions.
I do not undertake to estimate the size of such cash injections; indeed, there are many ways to reduce them to almost zero.
Conclusion
Let's summarize. The minimum cost of opening a Forex broker from scratch as a white label partnership with company registration offshore without a license is in the first year:
| № | Expense item | Costs in dollars |
| 1 | CEO salary | 12 000 |
| 2 | Company in Belize with nominal service for a year | 1 549 |
| 3 | 998 | |
| 4 | Site development | 10 000 |
| 5 | 2 500 | |
| 6 | 750 | |
| 7 | Unforeseen expenses (10% of calculations) | 1 580 |
| TOTAL: | 29 377 |
Maximum cost of a classic offshore broker with a license, opened independently without a partnership (excluding marketing costs):
| № | Expense item | Costs in dollars |
| 1 | CEO salary | 12 000 |
| 2 | Company in Belize with nominee service, office, account (for the regulator) and license for a year | 26 724 |
| 3 | Bank account in Latvia for a company, as well as for personal use (optional) | 998 |
| 4 | Site development | 10 000 |
| 5 | Merchant account | 2 500 |
| 6 | MetaTrader License | 150 000 |
| 7 | Postage and related costs | 750 |
| 8 | Unforeseen expenses (5% of calculations) | 9 549 |
| TOTAL: | 2 12 521 |
As follows from the information presented, the main cost items for minimal investments are personnel and website development. When, as a maximum option, it requires significant costs in order to use a trading software package, as well as the incorporation of a company with a license from an offshore regulator.
Thus, the range of initial investments is quite wide. Cost optimization allows you to organize and develop your own brand instead of a representative office or branch of an office. The amount of costs is quite affordable for an investor from the CIS and falls within the framework common sense. When choosing a reliable partner, it involves cooperation with active IB and stable traders.
Maximum investment determines the future maximum return. You can rely on direct customer attraction, you can use all the “kitchen” technologies at once. It does not matter which traders the company attracts in this case, what is important is the influx of clients as a whole. Unfortunately, investments at the level of the cost of real estate in the capital do not stop many scammers; from year to year we receive new story from another new superbroker. I hope this article will allow you to evaluate the reliability and plans of many existing projects and will save readers from nightmare investments comparable to the costs of organizing them!
Sincerely, Vitaly O.Kh.
A business broker is a person who acts as an intermediary between two parties to a business transaction - the purchase and sale of an existing business or enterprise. The broker also acts as an intermediary, or mediator, in business acquisition transactions and company merger projects. After completion of the transaction or in the process of passing certain stages, such a broker receives a fee, usually calculated in the form of a percentage of the transaction. Also, business brokers include not only individuals, but also relevant agencies and companies. In Russia, there are even ratings of the best business brokers (compiled for the current calendar year).
How does a business broker make money?
The main type of broker's earnings is a percentage of transactions concluded between organizations, enterprises, and other forms of business. Today this is a very powerful and financially fueled area, since in Moscow the percentage of transactions made through a broker exceeds 50%, in St. Petersburg - 25%. As a result, for specific stages of transactions or for the complete completion of the purchase of a business, the sale of an existing business, an organized merger or acquisition, the broker receives a reward.
The maximum market share is occupied by trade objects. At the end of 2014, up to a quarter of assisted transactions in the Russian Federation involved retail facilities.
How to become a business broker
To start official activities, you need to register as a legal entity or individual entrepreneur. To start the actual work you need to have the following skills:
- company valuations,
- searching for suitable properties for sale,
- pre-sale preparation of the object,
- searching for a buyer (access to trading platforms, advertising, other sources),
- organizing negotiations between owners,
- definitions optimal conditions deals,
- legal assistance in conducting transactions for the purchase and sale of companies.
In his work, a business broker will need the ability to maintain the confidentiality of transactions, the willingness not to use standard purchase and sale schemes, but to take an individual approach to the purchase and sale scheme and the preparation of conditions.
Broker business help
Often, company managers, wanting to change their field of activity, cannot immediately “get into” the format and features of the desired field. There is not always sufficient quantity free funds to purchase a business of interest. And the deal may “float away”. A broker can understand the intricacies of the work and assess the condition and value of a business, but the owner does not even need to know how the purchase and sale of a company is formalized from start to finish. Also, a good broker can help in selecting loan offers or find exactly the kind of business that can count on receiving. In addition, there are owners who are ready to sell their existing business in installments, and on fairly favorable terms.
Business broker services
Today you can find a suitable business broker both on the recommendations of familiar entrepreneurs who have already successfully parted with their ready-made business on favorable terms, and on specialized sites. There are ratings of the most active brokers in specialized magazines. The services of brokers most often used are:
upon sale:
- trade enterprises,
- Catering,
- service,
- services,
- beauty salons,
- manufacturing companies.
When buying, those who want to become owners “call” the broker
- car washes,
- trading enterprises (from tents to large trading platforms),
- catering,
- hotels,
- spheres of fitness, beauty and health.
Who are business brokers?
When deciding to sell your own business, you should find out who brokers for selling a business are and whether you should contact them for help. Business brokers are financial advisors who help find a buyer willing to pay the highest price. They provide in-demand services, helping to make a profitable sale or purchase of any company. The broker will help prepare the company for sale, giving advice on increasing the rating and value of the enterprise
A business sales intermediary is an experienced specialist who understands the current state of affairs on the market. Services are most in demand during periods of crisis, when the time factor plays a leading role. The agent’s tasks include assessing the business based on factors of payback, depersonalization of the business, and resource costs.
Buying and selling ready-made businesses - business broker services
The portfolio of services provided includes not only the purchase and sale of ready-made businesses. Business broker services include assistance in valuation, increasing value, and selling on favorable business terms. The transaction procedure takes place in stages:
- oral agreement;
- preliminary agreement;
- transfer of collateral;
- introducing the buyer to the business;
- conclusion and execution of the main contract.
All stages are checked by the agent to ensure the purity of the transaction. A business broker in some cases plays the role of an appraiser. The procedure for tax and accounting reporting, the condition of equipment, and the level of productivity are studied.
A business broker is not a Realtor!
A business sales specialist is a specialist who approaches the task of selling in a comprehensive manner. A business broker is not a realtor, but an expert in quickly concluding profitable deals. The tasks of the intermediary include expanding the base of sellers and buyers, the tasks of the broker are to evaluate and find solutions to increase the value of the business being sold.
Like a realtor, a broker takes a percentage of the transaction as payment for services; The customer usually pays for the service. A business broker has more authority in preparing for the sale of a business. The subtleties of cooperation at all stages are carefully discussed with the seller.
Brokerage activity is a licensed activity. IN Russian Federation from September 1, 2013, a license to carry out brokerage activities on the market valuable papers issued by the Central Bank of the Russian Federation. Previously issued by the Federal Service for Financial Markets (until 2004 - the Federal Commission for the Securities Market).
In order for the Exchange to exercise control over Trading Participants, as well as evaluate their financial condition Trading participants are required to provide information and reporting to the Exchange in accordance with the Procedure for providing information and reporting to the Public Joint Stock Company “Moscow Exchange MICEX-RTS”.
How to become a Forex broker
Let's assume that you decide to open from scratch.
Creating a dealing center step by step
To create your own dealing center (FOREX company) you need to go through several steps.
- You need to learn about how this business works on the foreign exchange market, think through all the stages of development of your future company. You need to formulate your key competitive advantages and decide on the promotion of your company in the brokerage services market.
- Required to register entity and open a bank account. For the created dealing center, it is necessary to competently draw up all legal documents, enter into agreements with other participants in the Forex market to cover client positions, obtain licenses from one of the regulators: the Central Bank of the Russian Federation, CySEC (Cyprus), IFSC (Belize), NFA (USA), FCA ( UK), BaFin (Germany). If the license was issued in Cyprus, and your activities are carried out in a country where this market is regulated (for example, in the Russian Federation), then CySEC will require a license from the Central Bank of the Russian Federation from you.
- Create a dealing center website, buy a trading platform, based on your initial capabilities.
- Open an office, equip it and recruit staff with experience and distribute tasks correctly. An example of back office organization can be viewed on the Metaquotes website.
How much money is needed?
Let's list the most expensive items:
- Purchasing a trading platform license - from $5,000 to $150,000 (depending on the number of your clients and the platform);
- Monthly maintenance fee for each platform ranges from $1,000 to $10,000;
- News feed to the platform - license from $300 + monthly subscription from $20;
- Payment to the liquidity provider - from $25,000 to $2,500,000 + monthly “support” fee;
- Regulator license. The license itself is inexpensive. For example, SySEC will require from you from €4,000 to €10,000. The price depends on the type of your main and additional services. All regulators require authorized capital. For CySEC it should be from €125,000 to €730,000, for the Central Bank of the Russian Federation - from ₽100,000,000 + contributions to the SRO. If you choose a foreign regulator, then you will be required to maintain a minimum physical presence in their country, which will additionally require you to approximately €180,000 per year in operating costs, including wages employees, as well as other operating expenses (for example, IT, telephony, electricity, office rent, external and internal auditors, Consumables etc.), not including the salaries of two top managers: general director, financial director.
- You will also need to finance server equipment.
Suppliers and liquidity providers
Typically, liquidity providers are large banks and other financial institutions (Bank of America, Citibank, Barclays, Deutsche Bank, Citibank, Merrill Lynch, Morgan Stanley, Nomura Bank, RBS, UBS, Saxo Bank, Scandi Bank, HSBC, Goldman, etc.) .
Liquidity providers are intermediaries that bring together a large number of liquidity providers, which allows you to issue them best price for a broker. Examples of providers: Integral, Currenex, Sucden Financia, LMAX Exchange, etc. Some brokers use the services of suppliers and providers at the same time.
Legal registration
In the Russian Federation, this activity is regulated by Federal Law No. 460 “On Amendments to Certain Legislative Acts of the Russian Federation,” known as the Law on Regulation of the Forex Market in Russia, which was adopted on December 29, 2014, and came into force on October 1, 2015. Now brokers need to join an SRO, which obliges the forex dealer to pay a one-time contribution (in the amount of two ₽2 million) to the compensation fund (payments from which are provided to clients of bankrupt forex dealers), an entrance fee (in the amount of ₽1 million), and make monthly membership dues.
Previously, Alfa-Bank offered services through offshore Alfa Capital Holdings (under the Alfa-Forex brand), registered in Cyprus. However, CySEC has announced new requirements, according to which all organizations licensed by this regulator are required to disclose their places of presence. This means that companies must provide the regulator with information about in which countries other than the European Union they provide their services. And also present for verification by the regulator the documents on the basis of which they conduct their activities in these countries. That is, to work in the Russian Federation, a Central Bank license will ultimately still be needed.
Foreign companies can be present on the market in the Russian Federation, but they are prohibited from conducting advertising activities. Although, as a rule, the Internet is enough for them to do this. This is the case, for example, with NPBFX (Belize), a brand of Nefteprombank, which has been actively used since the introduction of the law mentioned above.
Similar regulation is going to be introduced in Ukraine and Kazakhstan.
Classic scheme
Russian agent + Offshore company and Cypriot bank account.
Procedure for registering an offshore company
Registration of foreign companies is carried out by specialized firms that have certain connections and capabilities at the place of registration. Your new company will be registered within a month. Firms also offer ready-made companies if you are satisfied with the price and name.
There are companies that provide a full range of broker registration services. The cost of their services can be 20,000 - 30,000 euros, and reach several hundred thousand, depending on the scale of your business.
Russian company
You can register a company in Russia in your name. It’s better to take a name that is consonant offshore company(good example: Alpari - Alpari Partner).
PS: According to statistics from one of the largest Russian DCs (we will not name it), if we take its statistics for two years, out of several thousand traders working through it, only a few remained successful, which can be counted on one hand. At the same time, over shorter periods of time, there are much more traders in the black, but as time passes, their number decreases, i.e., for example, for the first half of the year they are in the black, then after a year there are fewer of them, and after two years there are only a few. The point is not in the DC itself, but the point is that Forex trading itself is such a risky business that mainly only those who stand behind the traders remain in permanent profits, i.e. These are market makers, DCs, brokers and banks, because these market participants make money even when traders lose.
IB and White Label brokers
Many full-fledged brokers (usually Forex) on their websites and in advertising offer you to create your own DC using their franchise, that is, to become an Introducing Broker. The earnings of IB brokers consist of a share of the spread (for example, 20-50%), from transactions of clients you attract, whose money is transferred to the broker and the clients work through their terminals.
Minus of this business are small incomes, large expenses for maintaining an office, working for someone else’s brand. If a broker has problems, the clients you attract will come to you, not to him.
White label(Russian: White Label) is a concept that involves the production of unbranded products or services by one company and the use of such products or services by another company under its own brand. You create and develop your company under your own brand, but use the trading platform of another broker. The advantage of such a business is much lower costs for opening a company and purchasing a platform, saving on licenses and maintaining technical staff with servers.
Your income can consist of both the share of the spread and the percentage of traders' trading.
Cons of white label: impossibility of expanding the functionality of the trading platform, lack of access to the terminal and server, lack of control over the flow of quotes, the presence of an extra link between the liquidity provider and traders.
Loading...