So, you came here expecting to read a “how-to” guide on how to make your brokerage firm become a worldwide household name and rise above all of your competitors. Stand in line.
If one or more aspects of your company isn’t up to par with industry standards, turning profit will be quite the challenge.
Having a successful broker is all about having the right pieces fall into place. If one or more aspects of your company isn’t up to par with industry standards, turning profit will be quite the challenge – there are no two ways about it. There are quite a few articles which discuss what makes a good broker. Some will mention technology, others will say that regulation plays an important part, and the rest mention a strong social media presence coupled with enticing promotional campaigns.
While I agree that all of the above are strong weapons in a broker’s arsenal, opening up your own brokerage firm involves a great deal of preparation before you can even think of launching your product on the market.
Keeping in mind that going into detail would considerably extend the length of this article, I’ve decided to maintain a global view on each of the aspects discussed below. The overview I provide doesn’t do justice to the importance of each element, but this will hopefully give you an insight into the main points to consider when you think of launching your own broker.
Know Your Market
With an increasingly growing number of brokers, the industry is naturally becoming more and more competitive. Gone are the days when binary options were new to the market; and gone are the days when traders almost blindly trusted investment firms. There are a fair share of traders who have lost money trading binary options – some more than others.
As a new brokerage firm, you can’t go wrong by looking at your competition. What are traders saying about these brokers? Is there a certain level of trust between broker and trader or has skepticism taken over? What do these companies offer? Are you likely to stand out? If not, what can you do to overcome this hurdle?
All questions you should be asking as you measure the overall state of the industry, which takes me to my next point.
Play to Your Strengths / Eliminate Your Weaknesses
Do you know what made Muhammad Ali such a great boxer? Speed, endurance and intelligence. Strength and technical ability would come last most of the time. Sure he could pack a punch, but he knew he could out-run, out-last and out-smart most fighters in the ring. He identified his strong points and how he could use them against his opponents.
Muhammad Ali identified his strong points and how he could use them against his opponents.
I’m not telling you to start knocking out executives left, right and centre (if you really want to, maybe learn a thing or two from Ali first); but figure out what your company offers, which others don’t. Do you offer special trading tools, a proprietary platform which no other company has, or an extensive collection of educational material?
In other words, why should a trader invest their money with your company instead of the next one? Identify your strengths and use them to your advantage.
Analysing your weaknesses and what you can do to either eliminate or minimise their effect will go a long way towards strengthening your brand’s selling points.
Choose the Right Technology Provider
Ultimately, you want to give your traders something for which to come back. Their trading experience has to be as enjoyable as possible, and you are solely responsible for making sure that you build a loyal client base. There are a multitude of technology providers out there, and one of your primary tasks is to identify which one of them will offer you what you need in order to build a successful business.
Essentially, what you’re looking for is a complete solution. Most technology providers will provide you with the complete package including the trading platform, a full back-office, marketing materials, connecting you to various PSPs, and some even assist you in acquiring a regulation for your brokerage firm.
Having a reliable white label solutions provider can go a long way towards helping you get your broker on its feet. Look to them for all the tools which you need to get started, and even go to them for advice and consultation. These companies are experts in their field and will undoubtedly be able to offer some valuable judgement and guidance.
Build a Healthy Affiliate Network
You’d be surprised how many brokers fail to take off simply because of the poor quality of their leads. Investing in marketing campaigns with quality affiliates will go a long way towards putting all of the chances on your side. This is one investment that you cannot afford to neglect, and one which you need to measure carefully.
Opting for CPA deals might not be the preferred deal basis for most affiliates, but it’s one way of making sure that you get your money’s worth. Alternatively, you can go for CPL deals as long as you choose an affiliate which qualifies its leads – many of them have their own call centres and qualify their cold leads in an efficient manner, leaving your sales team with the straightforward task of converting those leads into clients. This takes me to my next point – your sales team.
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Build a Powerful Sales Force
I’ve heard people tell me that being a great salesperson is something you’re born with, and others telling me that it’s an acquired skill. I subscribe to the former. Someone who has that edge ingrained in them will yield better results than someone who just doesn’t have the nous to convert a client.
Someone who has that edge ingrained in them will yield better results than someone who just doesn’t.
Now you can either go through the process of interviewing and carefully selecting your sales team, or you can outsource the team to an external company. While it is advisable in the long run to build your own sales team, outsourcing this service to a team of experts can make sure that you hit the ground running as soon as you go live. An outsourced sales team has the proven necessary conversion skills, allowing you to concentrate on running your business without having to train the team yourself, and considerably reducing the often overlooked operation costs of having a call centre in your office.
On the other hand, going with an outsourced company leaves you open to the risk of not being able to supervise the sales methods used, the reliability of each member of staff, and the fact that your leads aren’t speaking to a dedicated brand ambassador on the phone.
Whichever way you go, each has its pros and cons, but ultimately it’s about results and the overall ROI.
Build a Strong Online Presence
It’s 2015, and existing/potential clients are going to look your company up online. Not only can you widen your overall audience reach with a strong online presence, but those new followers could eventually turn into leads.
If a newcomer wants some information about your broker, you can be sure that a quick Google search will give them all the information they need. There are no shortage of broker review sites out there, some of which are less forgiving than others. Most of these websites allow traders to give their own experience on each broker with whom they’ve traded, and it’s up to you to maintain a positive reputation by either monitoring these forums, or making sure that you sustain a satisfied client base.
Helping give your brand a personality allows you to differentiate yourself from others.
Having a strong online community takes a while to build but once you manage to develop it substantially, the rewards are immense. If you interact with people who have a large amount of followers on Twitter or Facebook and they like your product, they could very well promote your brand, which in turn distributes it to a large untapped audience.
Not only does it allow you to promote your brand through more channels, but engaging with your existing and potential customers on a daily basis builds a certain level of trust that money just can’t buy. You have a front-row seat to real-time views on your brand, which in turn allows you to focus on what you may need to change in order to satisfy your customers, or what are your overall positives.
Helping give your brand a personality allows you to differentiate yourself from others. If your set of tools and services are equal to your competitors, your one chance of standing out is to take a personal approach and build a lasting relationship with your audience.
Don’t Be in a Hurry to Launch
There are a hundred-and-one brokers who shut down before they’ve even had the opportunity to test themselves efficiently; all because they launched before their brand was ready. Be patient with the process of setting up your brokerage firm, and make sure that you are completely prepared before your broker goes live.
Tick the boxes on your checklist and make sure that you haven’t overlooked a crucial piece of the puzzle. This is a tough industry to break into, and just because there are a large number of brokers who have a sustained level of success over the past few years, doesn’t mean that it’s as easy as it looks.
If all of the aforementioned aspects are on point, you’re good to go.
Being an unregulated broker carries a certain level of risk that you might not want to take.
Regulation obviously plays a crucial part in the credibility of your brokerage firm. Not only are you legally allowed to offer your services to the public, but existing and potential clients are much more inclined to trust you if you are a licensed and regulated broker. This means that you adhere by a certain set of rules and regulations, and that you are more inclined to offer traders a transparent and honest trading experience.
This is not to say that there isn’t a very large number of unregulated brokers out there, most of whom are highly successful. However, with the constant release of the infamous “broker blacklist”, released by regulatory authorities around the world, being an unregulated broker carries a certain level of risk that you might not want to take.
As mentioned in the beginning of this article, going into detail for each aspect would have turned this blog post into more of a book. Though I’ve maintained a global view of each point, the above-mentioned elements are what I deem to be of crucial importance to the condition of your brand; before and after your launch date.