Forex white label ideal for start-ups

A quick way to enter the forex market or startup a new brokerage business is to enter into a forex white label agreement with an established brokerage, which not only will reduce the risk of failure but will also allow the entrepreneur to better understand the business before committing money and resources.

Forex white label is essentially the process whereby you as the new startup get to offer a ready and tested online trading platform under your brand, whereas in actual fact, everything is done by an already established and preferably regulated forex brokerage or investment firm.

Suppose you wish to offer the popular MT4 online trading platform to your clients. First thing first, you need to formalize how you wish to operate because all the regulated forex brokerage firms or investment firms offering forex trading will not agree to white label their platform to you unless you can prove that you, yourself are regulated.

Assuming you are regulated and have secured your license, the next question is the level of investment you need to make in an online trading system. Do you buy the MT4 and then try to find counterparts with whom to deal and provide you with live prices or is it better first to enter into a white label arrangement whereby the forex brokerage provides you with their already tested platform and take responsibility for solving all technical and pricing issues and you simply add your logo to the platform and offer it to your clients?

In my opinion, such an arrangement is by far the best strategy since the funds needed to pay to another investment firm to white label their platform is significantly lower that purchasing the platform and secondly, it is very difficult process to resolve all technical and pricing issues, with the whole process likely to take several months until all issues are resolved.

Once you are up and running, then you can take the decision to purchase the online trading platform and slowly get on with the process of making it work in all areas including pricing, back-office and front office.

In this respect, I would say the most important element is how much volume your firm is likely to generate, since many firms are likely to finance the cost of setting up the white label electronic trading platform and cover the monthly service charge payable to MetaQuotes if you can guarantee minimum monthly volume.

In such a case, your entry into the forex business can be very cost effective since not only there will not be a need to pay setup fees and monthly service charge, but you will also get sufficient income since in a white label arrangement, you also do get the option to add extra commission to the spread. If you have volume, then you can negotiate almost anything.

The fastest and guaranteed way to providing assurances that you can deliver volume is to place a deposit under a forex managed account arrangement whereby the forex brokerage offering you the white label will trade on your behalf. This way, your brokerage will deliver the minimum volume without charging you for setup fees and monthly service charges, you will get to benefit from the added spread and your portfolio will also grow.