What is a white label solution??
This is one of the interesting topic i would like to touch it. Many of you who are still a IB- (Introduction Broker – the one who Gets commission for introducing/referring new clients to the Broker) would have a view on starting a new brokerage firm. And many you might searching for good and highly sophisticated trading platform like metatrader. Though India in not much evolved with metatrader solution as many of the people are not yet aware about the powerful trading platform in developing asian countries. And Iam able to see many brokerage firm coming with MT4 trading platform solution for the past two years. May be it could be one of your dream.
In short White Label is a step up solution when compared with the IB referral program. White Label Program is for Qualified Individuals & Institutions that want to establish a brand name and a presence in the Forex industry.
White Label Introducing brokers enjoy the following benefits:
1) Quick and Easy start: no need to spend time and money creating and purchasing trading platform, a “turn-key” White Label business solution can be set up in a matter of weeks.The advantage of white labelling from an existing broker is cost. It is usually free or very close to zero.
2)fast start of the online business with extensive continuous support from the Primary broker
3)avoiding the costs of setting up and running a full dealing business model, which requires licensing
4)Establish a Revenue Stream with Little or No Up Front Cost.
5)Flexibility. You can Customize your own Fee Structure and Dealing Spreads for your Forex IB Business.
6)Online Access to Customer Reporting.
7)All our trading software provided by the prime broker can be white labeled. You can add your company name and logo in any of the software’s the prime broker offer. When your clients login to use their software platforms, they will see your company name, with no references to your prime broker. Brand it as your own.
8)Take Advantage of Automation Technology to Run Existing Automated Trading Systems or Forex Robots.
9)Receive All Software Upgrades and Updates at No Extra Cost.
Ideal Candidates for the Forex White Label Program include:
Financial Services Firms that want to move their Forex trading operation online quickly and cost effectively or establish a new Forex brokerage division; for example, banks, insurance companies, stock or futures brokerage firms, etc.
Trading Firms and/or Online Brokers that want to offer a greater range of products to their customers. By expanding into the fastest growing financial market around (foreign exchange), you will be providing your clients with a great value-added service while increasing the profitability of your firm.
Companies Offering Forex Tools and Advisory Services – This can be websites or newsletters that provide an analysis of the Forex or futures market, advisory businesses, etc. that want to expand their web presence by offering online Forex trading capabilities to their existing client base.
Why a New Brokerage Firm needs White Label Solution?
When a broker or a financial institution creates its own brand and attracts its own clients it has to develop multiple platforms that will accommodate the business, including:
-The Trading Platform,
-The FX or Financial feed,
-The STP Bridge,
-A Risk Management Platform,
-The Internet site,
-Affiliate Management Systems,
-ERP – Accounting Systems,
-PABX Telephonic Solutions
The broker will decide which of the above systems it needs in operation on day one of its business. The more complete its solutions the more scalable the business will become; however time and cost are always the enemy and the broker must decide which of the above solutions is a must have, before it commences operation. White Label gives you to take advantage on installing your broker business in minimal weeks. Moreover The MetaTrader 4 system is an important tool for retail FX brokerages looking to reach the largest audience possible, but purchasing an MT4 may not be fiscally or operationally appropriate for your business as the pricing and the setup cost is very high in case of private label solution.
Problem with Private Labeling
Buying a MetaTrader 4 Server is expensive. It’s not just the license itself; there are monthly support fees, physical hardware costs, costs of recruiting and hiring qualified server administrators, data center charges, and more. Not only that, but learning the MetaTrader 4 system in-and-out from a back-office perspective will take multiple days of training and further months of work before your staff becomes experts. Finally, if the broker wishes to use a bridge or other STP solution for offsetting trades, a contract must be negotiated and put in place with the bridge developer, and then a time-consuming implementation will need to take place between the servers.
Comparision between Private Label and White Label
|Private Label||White Label|
|Startup Cost||100,000 USD Hardware, Software, Hosting Backup||Free|
|Time to Market||1-2 Months||1-2 Weeks|
|Monthly Cost||High, Fixed||Very Low|
A White Label partner earns income from each client’s trade. The higher the trading volume of White Label clients, the higher the income revenues. The revenue & compensation models for the White Labels are more flexible and have a variety of options to choose from, which will be specified in the White Label partnership contract.
All the best for your new brokerage firm!