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There is no doubt that running a forex brokerage can be a profitable venture when you understand the market and what traders look for while choosing a broker for themselves. But being a complete beginner in this space can be filled with challenges as you may find it hard to accumulate all the resources on your own. The most tedious thing in setting up an online forex brokerage would be integrating with a feature-rich and fully functional trading platform. Handling funds and the back-end processes would also require a lot of time and effort, and the cost burden can discourage you from pursuing this business idea.
But you could easily pass this challenging phase by finding a white label broker to set up your brokerage with minimal effort. Today we will guide you through choosing a white-label forex broker for your forex brokerage.
How to Become a Forex Broker?
Building and establishing your own forex brokerage from scratch is a complex and time-consuming process requiring much capital, manpower and extensive market knowledge. Launching an online forex brokerage is more complicated than any other form of business. You must start with entity registration and bank account opening for the foundation. Then comes the step of website development and platform setup, which is crucial and takes even more time with the constant test runs.
Then you will have to find trusted top-tier liquidity providers and set up payment systems. Liquidity providers are like the backbone of an online forex brokerage because you won’t be able to function as a forex broker without them. Then you will have to do lots of beta testing to configure your client portal or broker website. These steps are easier to explain but a lot more complicated when it comes to execution.
So, we can say that becoming a forex broker is not something anyone can do as there are a lot of things to consider and plan for launching this type of business. You will have to recruit people for a variety of positions, such as technicians, customer support and more which costs you a lot as an initial investment. Basically, starting a fully independent forex brokerage would be far from possible unless you are well-equipped with enough capital and expertise to carry out the process smoothly.
But this stressful process can be simplified by opting for a white-label forex solution, significantly reducing the cost of setting up. You also benefit from starting your business under the guidance of an expert with enough experience in the forex brokerage industry. You just need to find a top-tier forex white label broker, and they will give valuable guidance and assistance to take you to the next level.
Features of White Label Broker Solution:
The white label forex is similar to purchasing a product in a white label package for selling it as your own with your brand name and logo attached. Here, you will find a white label broker who functions as your technology provider and allows you to promote the brokerage with your brand name.
The initial setup cost will be greatly reduced, and you won’t have to worry about setting up the platform as it’s already there and functions well. In fact, when you opt for a partial white label solution, the white label broker will take care of the funds by accepting deposits from your clients on your behalf. This will be ideal for someone who is not ready to handle all the funds at the beginning itself.
In the case of a full white label solution, you will take deposits and handle funds, which can give you more control over the finances. The white label broker will only lend you the platform where the trading activity occurs. Basically you will be a little more independent when you choose a full white label over a partial white label as you rely entirely on the broker in the latter one.
The white label broker will also help you with platform maintenance, back office work, customer support and even marketing activities to establish your new brand name. In fact, the purpose of white label forex solution is to focus on the promotional aspects more as the other activities will be carried out by the white label broker you choose as your technology provider.
Many of the top-tier forex brokers we see today also relied on another primary broker and started their business with a white label solution. They became independent brokers later on when they managed to establish their brand name and expand their client base. So, starting out with a white label broker would be the right thing to do to gather some forex brokerage experience.
Pros & Cons of White Label
Pros:
- It can start quickly as setting up the brokerage can be completed within a shorter duration, saving a lot of time.
- The process is a lot more simple and easy to get done with.
- The initial setup cost is minimised to a great extent.
- The risk of inexperience will get eliminated when you choose a leading forex broker as your white label broker.
- You can pay more attention to promotional activities to widen your client base.
- You can customise the platform to make it unique and build your brand image.
- Your clients will get a superior trading experience when they interact with a stable trading platform that many other clients already use.
Cons:
- Traders may prefer established brokers over new ones.
- It will take some time to establish your brand name in the market.
- Doing more customisations may result in added costs.
How to Choose a White Label Broker?
Finding a white label broker is quite easy once you have an idea of what kind of primary broker you want to operate under. It would be ideal to choose a broker who provides popular trading platforms like MT4 and MT5 as a part of the white label package, which are the most trusted trading platforms used by millions of traders from all around the world. You need to consider all the costs including the initial setup cost and platform maintenance cost.
Also, check what other services are offered by the white label broker besides the technology solution. It would be better to go for a broker to help you with branding and promotions, as doing it all alone may burden you. Consider their reputation in the brokerage industry and compare the options that are available to you. This way, you can decide which white label broker you want to opt for starting your own forex brokerage.
To summarise, starting your journey as a new forex broker has many challenges. But a white-label broker offering the required assistance can simplify the process to give you a more accessible entrance into the forex brokerage industry. White-label brokers are rich in expertise and experience and can act as your guide to mark a successful beginning to your business idea. So, choose the best white-label broker and explore all your opportunities while moving forward.
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