3 Things Clients Expect from a CFD Broker
How to attract CFD traders to your brokerage
Brokerage growth opportunities with CFD traders
A report from The International Organisation of Securities Commissions indicates that there are many investors in the CFD market.
In fact, “In Spain, CFDs are the main type of OTC retail leveraged product” with more than “€288bn in total underlying nominal value” sold to retail investors in a single year. The report also estimates that there are as many as a quarter of a million people who trade CFDs and other leveraged products in Germany and the UK alone.
With so many individuals interested in CFD trading, brokerage firms have the potential to gain new clients and expand their businesses through their CFD products. However, to attract and keep CFD traders, brokerage firms must understand what those traders look for in a CFD broker and CFD trading software.
Keep reading to learn what CFD traders look for in a brokerage to help you understand how to attract new clients.
1. They want to limit their losses.
The margins and leverage on CFDs make them an attractive asset to many investors. However, those same features make traders hesitant to invest.
The ability to set a stop loss and limit order can help clients get over their fears of risk, and most websites with articles that help people choose a CFD broker advise their readers to choose a broker that makes it easy to use those kind of features.
Use a trading software that allows clients to set limits so they can control how much money they are putting at risk. If there are any fees for using stop loss or limit order features, make sure those fees are clear to potential clients. You don’t want to go through the work of onboarding a new client only to lose them once they realize what kind of fees they’ll be paying.
2. They’re excited about dividends.
Many websites and forums for CFD traders tout the ability to earn dividends as a reason to invest in CFDs, so when clients earn dividends, they want them processed as quickly as possible after the ex-dividend date.
Because it can be time consuming to process dividends manually, for all clients, across all symbols, you should find a white label CFD trading software that helps you pay and collect dividends fast.
For example, CurrentBusiness’ Dividend Module makes it possible for you to enter the basic dividend information once and process payments and charges for all your clients. After you enter the dividend information, the system automatically calculates the net position of each client account for the dividend symbol and then credits or charges client accounts, based on position, at whatever time you specify.
3. They want clear information about dividend fees and taxes.
Speaking of dividends, CFD traders want to clearly understand all the taxes and fees they’re charged when they do earn a CFD dividend payment.
You can prevent most client questions by providing a list of all the fees and taxes that may be charged when a CFD earns a dividend. Make sure the list is descriptive, so clients understand what the fee is for. If you can, put this list on your website where potential clients can easily find it. Making the list available will show traders who are looking for a new broker that your firm is honest and upfront about costs.
Follow through with that transparency in your trading software so your clients can tell how much money went to taxes and fees when they look at their account. If you use a white label CFD software as a CRM, make sure to choose one, like CurrentBusiness, that clearly labels taxes and fees for clients.
Showing taxes and fees in clients’ account pages assures them that they received the correct payment for a dividend, which will reduce the number of calls and emails your brokers have to deal with.
Dividends and trading software
Offering clients good trading software and providing clear information to clients is paramount when it comes to attracting and retaining trading clients. Keep your brokerage firm competitive with CFDs, forex, and all your products by using the tools available to you.
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