Faced with challenges such as increased competition and reduced spreads, brokers must take measures and implement tools in order to optimize their conversion and retention rates. Social trading is a phenomenal tool to help brokers attract new traders and lengthen their trading lifetime. If you are a broker who is not yet taking advantage of the many benefits provided by social trading, you are ignoring a powerful tool.
What are the main benefits of implementing a social trading platform in your brokerage?
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- Social trading brings a new age of transparency.
- Social trading improves customer relations by creating a more confident trader that is happy trading with your brokerage.
- Social trading can be an essential marketing tool that seeks to blast through the acquisition barriers to entry, while at the same time bolstering client retention.
- Social trading entices users to convert themselves into traders simply by following and copying already established traders in a broker’s social community.
- Social trading helps a broker boost their acquisition and deposits by giving a novice trader who is nervous about losing his money, the notion of being able to copy from already established traders with a proven track record, thus quelling his fear of a first deposit.
- Social trading helps brokers lower their attrition rates and in turn boost retention by giving traders an FX community they can feel a part of. Once a trader finds his place in a network and begins following and copying a master, he would prefer to stay with your brokerage and not forfeit what he has already accomplished.
- Social trading helps a broker increase their trading activity. When a master trader opens a position in a social trading community, all those traders copying him will open the exact same position at virtually the exact same time.
- Social trading networks that are seamlessly integrated into a broker’s trading platform tend to increase the amount of time a trader spends inside the platform, thus increasing trading activity and retention.
- Social trading gives traders the ability to trade even when they are asleep. A broker may see his traders being active even during their downtime if they are following a master who may be trading in a different time zone, and is therefore active.
- Social trading makes newbie traders more comfortable because the experience is more social and less intimidating.
When implemented correctly, social trading can boost the lifetime of the average trader by 14% or nearly a full month, increase trading activity by more than 50%, increase net deposits by 32% and a broker’s P&L by 40%, thus raising the value of each trader significantly.