In today’s new product review we take a look at Addison Churchill, a B2B broker liquidity and Forex business consulting firm. Different than previous New Product Spotlights, Addison differs as it isn’t per-se launching a new product, but a unique business model.
Readers of Forex Magnates may have picked up on references to my past experience as an equity proprietary trader. Part of the day trading movement of the mid-90’s, proprietary trading offices sprung up across New York and the rest of the country. Formed as partnerships, traders typically would participate in the greater fund by depositing literally a few dollars to tens of thousands of dollars. Depending on their capital and performance, traders would then have access to trading the overall firm’s cash. The broker would benefit by collecting commissions on trades, while the trader gained access to tremendous amounts of capital. At the firm I traded at until it closed in 2003, Wall Street-based Worldco LLC, traders also had access to executing with NYSE floor brokers and participating in crosses of large trades at favorable rates to existing market prices.
With that background, I was intrigued when learning about a newcomer in FX adopting a similar model for its B2B offering. Launching earlier this year, Belize regulated Addison Churchill announced last month a capital funding program where it is committing $5 million to be offered to its broker customers to help grow their businesses. Similar to the above mentioned equity prop shops, broker customers benefit by accessing additional funds to grow their existing businesses such as to be used for hiring and marketing, while Addison gains via fees collected on its liquidity services they provide. Learning more about the endeavor, Forex Magnates spoke with Addison CEO, Keith Sazer, who also has roots in the equity prop trading sector.
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Explaining their business model, Sazer stated that they “didn’t want to just be another liquidity provider on the market. We want to create unique relationships to help firms grow.” He added that for some firms this means offering capital, while for others it’s business consulting. In regards to its capital commitments, Sazer mentioned that they are receiving many enquiries from firms seeking cash infusions. Ideally though, he explained that they are targeting the funding to firms with existing broker businesses with a revenue track record and not to startups.
Sazer though pointed out that in addition to their capital offerings, they viewed their business consulting as just as important. Part of the services they provide to customers are liquidity, business consulting, which includes assistance in marketing, training and sales. On this, Sazer cited, “We don’t charge clients for consulting services; this is one of the benefits of being a client at Addison Churchill. Our team of consultants has extensive experience and knowledge in the retail brokerage industry as well as proven and repeatable strategies for growth.” He added that their aim to is to form a model with their customers that will allow them to increase their profits by 50%.
Using regulation from Belize, Addison is part of a recent trend in the market to register in less regulated countries, while focusing instead on forging relationships with customers. Specifically, this trend is noticeable among new brokers created by veterans of the retail Forex industry who open their businesses with existing networks of potential clients and introducing broker partners. Along this line, Addison is hedging its future by betting that it can grow its own business by being able to forge tight relationships with clients.