If you are planning to start your journey as a brand new broker in the forex market, then you have reached the right place. Because this must-read guide will be telling you about the best way to mark a successful beginning to your brokerage business. As you may already know, there are two directions that you can take for setting up your own forex brokerage. One is the traditional route, where you do everything independently without any support, starting from ground zero. The second and easier route that you can take is opting for a Forex white label solution.
Now, which of these two ways is more beneficial and why? Please read till the end to find a comprehensive answer to the question.
Reviewing the First Method – Starting From Scratch
We will start by reviewing the first method, which is starting from scratch as an independent forex broker. Here you will be the only one responsible for all major and minor operations related to the brokerage business, and hence you can exercise complete control over each and every aspect. But it also requires a huge amount of investment, not only as capital but also as manpower and other resources essential for starting an online business.
Now, let’s look at the steps you have to follow to set up your own forex brokerage in a traditional way.
- Define and Study Your Business Target – The very first step that you have to take for starting your own brokerage is defining and studying your business target. As an online forex broker, a large group of people can access your website and services worldwide. But due to legal constraints, a broker needs to decide the countries or geographical locations where they want to establish their business. There are a number of factors that you need to consider for selecting your target audience and potential client base.
- Request a Forex Broker License – The next step is applying for a license. The procedure or legal formalities will differ depending on the jurisdiction you choose for your brokerage business. Getting a license as an offshore broker is comparatively easier and way quicker than getting a license from a top-tier regulatory body like FCA or CySEC. However, brokers who are regulated by reputed bodies surely have the upper hand when it comes to winning the trust of clients. So, you need to decide which route you want to take and comply with the requirements based on that.
- Calculate the Costs and Make Sure You Have Sufficient Capital – The next step is one of the most complex parts, as here, you will have to set up a budget by calculating the total cost that you will be incurred at the start of the business. You also need a rough idea of the ongoing costs you will have to meet while running the brokerage. You need to ensure you have sufficient capital for a smooth flow of funds into the business, as you can’t expect profits from day one. Because capturing clients as a brand-new forex broker takes some time, and your financial backup must be strong enough to survive the initial period without any significant revenue.
- Collaboration With Dependable Payment Portals – As an independent broker, you must set up payment portals and gateways for accepting deposits from your clients and processing their withdrawals as and when needed. So, you need to find reliable payment service providers and collaborate with them to ensure a safe payment experience for your clients.
- Integrate With Top-tier Liquidity Providers – The primary service of a forex broker is offering liquidity to their clients, as their trading experience is all about being able to place orders at the best prices. So, you need to partner up with top-tier liquidity providers, as your clients will want a quick execution of orders without any significant slippage. You also need to make arrangements to provide leverage to your clients, which must be done after verification and other credit approval procedures.
- Find a Reliable Technology Provider – The next step is finding a technology provider or, in other words, finding a reliable platform for trading, a fully functional trading software like the classic MetaTrader 4 or its advanced version, MetaTrader 5. But just getting a license to offer MT4 to your clients is not enough, as you will need a team of technology experts to set up and complete the back-end processes with perfection.
- Website Creation – The next step is creating a website for your broker platform with your brand name, logo and unique features that make you stand out among other forex brokers. But at the same time, the platform should give a similar vibe that allows you to earn the trust of beginners and experienced traders alike. Your website will be the only thing your potential clients will interact with, and it also gives you an identity as a broker. So, this step is something that you cannot compromise with as you must give your best towards website creation at any cost.
- Set Up an Office – You need to get an office where you will have your employees sit and work. But these days, not all businesses go for the typical office setup on a building, as virtual offices with work-from-home facilities have become a norm among modern businesses. You can see which of these options works best for you and start with the hiring process.
- Platform Testing and Going Live – You have built the platform from scratch with your own technology and resources. Hence, you must spend some time testing its functionality to fix any bugs or issues that might interrupt the user experience. Your platform must be as perfect as possible at the time of launch. And hence you must arrange for testing and improvement until that point.
- Marketing and Platform Maintenance – The last step is a never-ending process: marketing and platform maintenance. You need to keep maintaining your platform for smooth running, and consistently promoting your services is crucial to survive in the cutthroat competition.
Reviewing the Second Method – Forex White Label Solution
- Come Up With a Business Plan – The first step for starting your own brokerage with a white label solution is devising a business plan. This plan should cover all aspects of your business and how you plan to use the white label solution for an easier entrance to the forex brokerage industry.
- Choose Your White Label Provider – The next step is doing some research to find a suitable white label provider for yourself. Forex white label providers are top forex brokers who come forward to share their technology, resources and expertise with a new broker to help them out. They allow you to cut down on the cost to a great extent and also give continuous support throughout your journey.
They allow you to use their platform under your own brand name and assist you in every step, from platform customisation to launching of the website. The use of ready-made technology along with top trading platforms, calculators and tools will not just help you jump into the business with a quick setup process, but will also help traders in several ways who sign up with you.
- Testing, Launching and Promotions- Even though white label packages are readymade solutions, you must be doing a pre-launch test to stay on the safe size. And once the platform is ready to be launched, you can start with the promotions, which is an ongoing process. The primary broker may offer some help in this regard if it is covered in their service package. Other aspects like platform maintenance and customer support will be handled by the white label provider in most cases, making things easier for you.
A good way to test the platform functionality and other features is to try the demo account. You should be doing this even before choosing your white label provider, as their demo account experience tells a lot about what kind of platform support they can provide as a white label provider.
Cost of Forex White Label Solution
The total cost of a Forex white label solution can vary depending on the broker you choose. But generally, the packages are priced within the range of $7000 to $20000.
Summary
To keep it short, a Forex white label surely looks like the best method for a beginner stepping into the Forex world as a broker. This cost-effective solution allows you to get started quickly and gives you a complete package with ample support from a reputed and experienced forex broker.
