Last year brought a step forward for a number of major brokerages in the industry, and the upcoming regulatory changes in the EU have spurred a lot of M&A talk. But as volatility picks up materially, we might see a shift in the acquisitions landscape, as brokers focus on the opportunities that the current market environment presents.
Andrey Dashin, founder of Alpari and FXTM and one of the early pioneers of the industry, shared with Finance Magnates that he prefers organic growth. Both brokerages have done well in 2017, adding new regulatory licenses and focusing on what’s coming ahead. And from the looks of it, the first two months of 2018 are only bringing good news to the brokerage industry amid a raft of volatility.
Do you see prospects for further consolidation in the industry and have you considered some acquisitions in recent months?
Being the owner of two independent global brands is already quite time-consuming. I am fully focused on supporting and developing further these brands rather than steering off into M&A territory. I do think we might see some M&A deals in 2018 as it has always been quite popular tool for companies to gain fast access to new markets, products or technology solutions.
Did you see an outflow of traders from the Russian market as a result of the new restrictions?
I always welcome a proper regulatory environment. There have been some bumps along the road for all companies, but at the end of the day, it is the reputation of the company and the trust of your clients that matter the most along with the broad range of services offered. So, if you are keeping your business to a high standard – the only way you will be moving is forward, even with the new rules or restrictions.
It is no secret that strict regulation typically leads to some clients choosing offshore brokers. Do you think that this is a trend in Russia, and could it become one in Europe?
It is not only the regulators, but more so the clients who dictate, via their majority preferences, the movement of the scales one way or the other. I think there will always be demand for both.
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FXTM recently announced the acquisition of a new FCA license. At a time when regulations for retail brokers in Europe are becoming increasingly strict, and with Brexit looming, what is the rationale behind the decision?
It is my belief that, even after Brexit, London will remain a key financial hub. FCA is and will remain one of the most reputable and competent financial regulators. An FCA license will open up a number of new opportunities for the brand and ensure the continued growth and success of FXTM on the target markets.
Moving forward, what be the best way to do business in the European market? Where do companies need to invest in order to survive the tough changes?
Long gone are the times when you could have been blessed with a sparse competition. Now you have to be always on top of your game, innovative and striving for perfection in every possible way. But above all else – never forget the importance of the team spirit that drives your company to excel in its field and boosts it towards success. You also have to work smart, hone your strategies and utilize cutting-edge technology.
With 2017 behind us, how has Alpari performed and what have been the key markets for the company?
Alpari made headlines at the end of 2017 with a trading turnover that exceeded 1.3 trillion USD — an impressive year on year increase of 29%. Client’s equity also showed a healthy 32% increase year-to-year.
This success was due in part to internal improvements to Alpari’s product line, technology services and customer care. With these innovations now in place, Alpari is confident that it will not only continue its reputation as a market leader in Russia and CIS regions, but in international markets as well, both in terms of client volume and trading transactions. The receipt of an investment brokerage licence from Latvia’s financial regulator FKTK in 2017, is an example of Alpari’s determination to bring exceptional trading services to a global audience.
And how has FXTM performed in 2017?
FXTM has continued to go from strength to strength over the past five years and I am glad to say that 2017 was the most successful year of the company since its inception. The brand has become very popular across all of its key markets with its client base growing by 77% and client balance doubling in comparison to the previous year. Trading turnover also increased by 38% in 2017.
Each individual market that FXTM explores has its own unique characteristics, but one comparison that has been noted throughout all of the different target markets is the widespread popularity of the FXTM Invest product. The number of those using FXTM Invest as an investor increased by over 130% by the end of 2017.
What has supported the growth of FXTM is understanding the need for both localization and showing commitment towards developing long-term relationships with partners and traders. There has been an increase of active partners by 81% over 2017 while the ongoing investment in client education on the ground has helped establish FXTM as a trusted broker that cares deeply about its clients.