How do I open a brokerage? Your questions answered!

Helpful advices
15 December 2020

Almost daily, we are contacted by IBs and investors asking how they should go about opening their own brokerage. 

While there are multiple ways to open a brokerage (white label, grey label etc) in this article we will be focusing more on the option of having a complete solution. 

Let’s look at the 5 main things you should concentrate and do your research on before opening your brokerage. 

 1. Trading Platform 

Your choice of Platform is one of the most important decisions you’ll make when deciding to open a brokerage. There are many trading platforms on the market to choose from, however, the most popular are the MetaTrader 4 and Metatrader 5 platforms. 

Unless you are buying a company which already has a MetaTrader 4 server (which we can assist you with), you’ll need to purchase MetaTrader 5 directly from Metaquotes - as MetaTrader 4 servers are no longer sold directly from the producer. 

FX BACK OFFICE  is integrated with both MT4 & MT5 trading platforms amongst others. We can integrate any platform of your choosing, on the off chance we haven’t already. 

2. CRM  

If you get your choice of CRM wrong, you’re looking at major short and long term deficits. Your Forex CRM is an integral part of your business, and making the wrong choice can cost you - financially, emotionally and timing wise. You haven’t seen a person beat-down until you’ve seen an FX Company owner approach you after making the wrong choice of CRM provider. The cost associated with migrating from one CRM to another is substantial, the time it takes to migrate your data and get you up and running is also a factor to consider, as is retraining your staff, and the tole the stress and panic takes on the entire company. Before you choose a Forex crm provider, shop around. See who uses them. Ask experts in the industry who can point you in the right direction. Choosing a CRM is not a decision to take lightly - apply the same importance and scrutiny you would to choosing a husband or a wife! After all, choose correctly and you could be looking at a life-long commitment! We currently provide our forex crm for over 150 Fx companies worldwide. FX BACK OFFICE offers a client area, CRM & back office system, IB /Affiliate area and PAMM. We are connected with over 80 psps, numerous trading platforms and third party solutions, and our forex crm system is completely customizable. With us, you can run multiple entities from one CRM, access all kinds of financial, marketing and sales reports, and revel in the fact you’re using one of the most automated, reputable, and professional forex crm solutions on the market. They call us the ultimate Forex CRM for a reason.. connect with us to learn why. 

3. Liquidity 

A good multi-asset liquidity provider is the backbone of your operation - and it’s imperative to compare and contrast every provider out there before making the decision of who to go with. 

You should be looking for a liquidity provider with an average trade execution speed of 3-4ms- with a history of 99.5% of trades being executed in less than 5ms - at the very least. It’s important to pay attention to your liquidity provider’s sustained processing capacity in combination with their uptime. Take into consideration their historical spreads and the pricing they’ve given you- making sure to test that what you’ve agreed to is reflected in your back-end or at other brokerages who use them. Carefully study their reputation, who they are regulated by, and which top tier banks and established non-bank partners their liquidity is provided from. 

4. Website 

It goes without saying that it’s imperative to get your website up and running as soon as possible. You should set-up your site in parallel with your back office/platform/liquidity and bridge to ensure you don’t lose time. If this is the first time you’re setting up a brokerage, we’d advise you to use a professional marketing/advertising company with Fx experience. A professional company who has worked within the Fx industry will know exactly how to deal with the regulatory requirements so you don’t get penalized ie. how to write and place risk warnings strategically on your site, which KYC questions need to be in your questionnaire at the registration phase, and what documents your clients need to accept before trading (amongst many other things). Once you site is set up, your compliance officer can check that your chosen outsourced company has placed and created the content correctly before moving forward. Most marketing companies charge a retainer fee after the initial set up, but keep in mind that it’s a small price to pay to keep in line with your regulatory body. Retainer fees can also include making changes on the site, adding new pages, or social media management - all of which can be discussed and decided upon before you move forward. Check out 120 advertising and contentworks - both highly recommended within the industry. 

5. 3rd party solutions 

Ever heard the phrase ‘jack of all trades, master of none’? This is where third party solutions come in. Always be weary of any provider who can give you everything at one set fee. Although financially it might look attractive, more often than not, the tech won’t hold up and you’ll have significant problems down the line. Third party solution providers usually deal with 2-3 products max, which have been developed properly and on a deeper level over time. Third party solutions you might look at adding could be copy trading (from tools for brokers or brokeree), cashiers (which lower your decline rates and give you access to over 200 psps) from BridgerPay or Praxis, Forex education to attract and retain clients from TRAIN YOUR TRADERS, Dialers - which highly increase your response time and store employees calls from Did Logic, or live chat for your clients from LiveChatInc. FX BACK OFFICE is integrated with all of the above third party solution providers and more. Should you need advice on adding any third party solution, we are here to help. 

Once you’ve done the research and decided on the providers you’ll use for the basic five steps of how to set up your brokerage, we can help you with the rest! Don’t hesitate to contact us to learn more about setting up a brokerage, or our CRM.