5 Reasons Forex Brokerages Fail
What you need to know to succeed
Many forex brokerages fail within the first few years of business. It’s often difficult for new brokers to find and keep enough clients to remain profitable. To recruit and retain clients, brokers need to operate with maximum efficiency and stellar customer service.
There are many reasons that brokerages become inefficient or provide sub-par service. However, we continually hear about a few problems that make a big difference in a new forex broker’s failure.
Here are the top 5 reasons we’ve seen brokerages fail.
1. They make onboarding difficult.
When a lead becomes a client, you want to enable them to start trading as soon as possible. Manually inputting a new client’s data is time-consuming, which means it will take longer to complete the onboarding process.
Use forex back office software with a web API to integrate your onboarding form with your back office system. Clients fill out forms once, and the data is automatically entered into your system.
The faster a client’s data is in your system, the faster you can verify their KYC documents, set up accounts for them, and get them trading.
2. They don’t integrate with PSPs.
Similarly, once clients are ready to deposit money and make trades, you need to make it happen fast. One way to speed up the process is to integrate with payment service providers (PSPs). Integrating with PSPs means that you can quickly process a client’s deposit and credit it to their account.
Make sure your forex CRM is connected to top PSPs like Neteller and Skrill. Using one of these systems is easier than establishing a merchant account with a bank.
3. They spend time on the wrong things.
Once clients’ accounts are up and running, you need to keep them as an active client. The best way to keep them active is to ensure they receive great service and enjoy their experience. You can do that by providing them with market analysis, forex education, and responsive support.
If you’re too busy dealing with bookkeeping issues to offer customer support and education, clients are more likely to leave your firm. Find ways to save time on tasks like calculating revenue and dividends so that you can spend more time helping clients.
Learn why traders quit forex!
4. They don’t offer clients what they want.
MetaTrader4 remains the most popular trading platform among forex traders. However, many traders prefer MetaTrader5 or another platform.
If a current forex trader is considering switching brokers, they may be more inclined to move to a firm that offers the same platform they’ve used before, or they may be moving specifically because they want the features available on a different platform.
Offering more than one platform option can help you attract existing forex traders who have a strong preference for one platform or another. Look for a forex CRM that is compatible with multiple trading platforms so that you can give clients what they want.
5. They don’t offer what IBs need.
One of the best ways to grow your brokerage and increase your profits is to work with introducing brokers (IBs). Partnering with IBs allows you to expand into new markets and reach more clients. However, IBs have a lot of options when they’re choosing a forex form to work with.
You can recruit the best IBs, and all the clients they work with, by giving them the tools they need for success. Before, we’ve covered how having a multilingual forex CRM can help with IBs. It’s also important to offer them a CRM that has marketing tools and email features as well as allows for multi-level management. Overall, winning over IBs is all about the tools you can provide them.
Starting a new brokerage is hard. Choosing the right tools can make the process much easier and help make you successful. A forex CRM and back office suite with revenue calculation, dividend management, marketing tools, and KYC management can save you time so you can offer the best services to your clients.