The trading volume of the forex market is in trillions, and it keeps increasing with the growing popularity of currency trading. But trading is not the only way to make money in the forex market. Those who want to set up a business in the trading industry can open a forex brokerage to make profits by providing platform services to traders. However, many aspiring forex brokers are reluctant to take up this business idea as they need more resources and expertise to build their platform from scratch. The Forex white label solution is ideal for any beginner who is interested in opening their own brokerage with the support of an established broker.
In this blog, I will share some useful tips you can follow to launch your forex brokerage, including the steps involved in establishing your business.
- Decide on a business structure and apply for the necessary licences
The first thing to do for opening your own forex brokerage business is to decide on the business structure. Whether you want to become an independent broker without relying on anyone else or establish your business on a partnership basis, you should also decide the type of brokerage you want to build based on trade execution and the type of traders you want to focus on for growing your business. For example, if you want to cater to the needs of Muslim traders, you should offer Islamic accounts by complying with Sharia law. These are swap free trading accounts, so traders can keep the positions open overnight without worrying about paying swap fees.
You should also obtain the necessary licences that are required to operate as a broker. You need to start by registering your business entity as a forex firm. But before this, you need to create a detailed business plan that you can follow. When you have a well-defined plan, the rest of the steps become easier, and you should also take time to assess the capital requirements and set up a budget. Having a constant cash flow is important to proceed with your business plan.
- Choose a jurisdiction to operate
Even though the forex market operates on a global level, you will have to choose a location and jurisdiction for operating as a broker. If you plan to set up an office, you will have to choose a location. These days, it is possible to set up a virtual office where all your staff can work remotely, and this model is feasible for a forex brokerage business. When it comes to choosing a jurisdiction, you need to consider your target audience and also the regulatory formalities of the chosen jurisdiction.
- Partner with a technology provider
Becoming an independent forex broker is very challenging for a beginner in the forex world, and the cost of technology is a major concern for new brokers. It would take a lot of work to build your own platform from scratch, and it requires a team of experts who can help you with website development and platform integration. Besides this, you will also have to make arrangements for market access, payment processing, CRM systems and more. All of these processes can be very complex and time-consuming.
But when you team up with a white-label provider, the cost and time can be greatly reduced. A white-label provider will help you setup your forex business within your budget. The white labelling allows you to use an existing technology and a ready-made platform after rebranding it as your own. Hence, you get to provide your clients with a tried and tested platform with branding and customisation. The white-label provider will also offer ongoing support for running your brokerage.
- Comply with regulations
It is not mandatory to operate as a regulated broker. Still, you will get a competitive advantage when you obtain the regulatory licence from a top-tier authority like FCA or CySEC. Because traders prefer regulated brokers as they are considered a safer option. Thus, you should comply with the standards set by regulatory bodies and apply for their licence. If you choose a regulated broker as your white-label provider, they will help you with these formalities. It is not easy to comply with regulations, but it helps in client acquisition.
- Branding and customisation
Even though you are operating under the umbrella of a white-label provider, you need to stand out among other brokers by creating a unique brand identity. This should be highlighted with the brand name, symbol and all other aspects you will use to highlight your website. Your future clients will be considering all these to identify your brand. You should also focus on customising the platform in a way that it becomes appealing and attractive to your target audience. The white-label provider will help you in this process, but you should also bring new ideas to the table.
- Develop a marketing strategy
The next step is developing a marketing strategy and promotional plan for reaching out to your potential client base. The white label provider may also help you in promotional activities, but you need to pay a lot of attention to building your brand image as a new broker. You should present the brand in a way that clients can see you as a trustworthy broker. One benefit of choosing a white-label solution is that you can concentrate on marketing more, as everything else will be handled by the white-label provider, reducing your burden.
- Focus on Establishing your client base
Once your platform goes live, the white-label provider will manage all the technical processes, and you just need to pay the platform maintenance fee on a regular basis. But in order to build your client base, you will have to put in consistent efforts. Client acquisition is nothing less than a challenge for a new broker as traders are more likely to choose well-known brokers, and winning the trust of clients as a new broker takes some time. However, this process becomes easier with the support of a top broker functioning as your white-label provider.
- Evaluate the performance of your business and make necessary changes
Last but not least, surviving and thriving as a new forex broker is only possible if you can deal with the stiff competition. For this, you need to keep yourself updated about the things that are happening in the forex market and brokerage industry. Moreover, you should evaluate the performance of your business and then make necessary changes for its betterment. But at the same time, you should focus on meeting your client’s requirements, as building a loyal client base is the key criterion for measuring the success of a forex brokerage.
Wrap Up
In the end, I want to share one last tip that you need to follow to become a successful forex broker: following a strategic approach. A trader will have to follow a strategy for making profits, and similarly, a broker needs to develop a unique strategy for emerging as a top broker over time. Success is not guaranteed when you depend on a white-label provider, but it is surely less challenging in every sense.
