Becoming a brand new broker in the forex market is a unique business idea with a lot of potential for profits. Because the currency market Read More
But which of the two will be a better option to enter the brokerage industry? You will get an answer to this question by the end of this blog as I am going to compare and evaluate both programs while considering the pros and cons. You can think of white labelling as a partnership program which allows a new broker to launch their platform while using a turnkey solution provided by another broker. The broker that they rely on for technological infrastructure and platform services is referred to as a white label provider and they will help emerging brokers by letting them all use their resources and platforms. But you still get to create an identity for your brokerage with branding and customisations. Now, let’s have a look at the pros and cons of Forex White label solutions. The primary benefit of starting as a white label forex broker is that you can greatly minimise the costs. This includes both initial setup costs and ongoing costs of running your brokerage after the platform is launched. When you start from scratch, you must hire developers and build a website and platform on your own. Integrating the trading platforms, trading calculators for determining trading values and other systems for payment processing will require additional funds. But when you buy a white label package it includes everything that you will need for offering brokerage services and you won’t have to spend a lot on programming or software solutions. You can find affordable white label platform solutions, and the operational costs are also low as the primary broker manages all the complex technical processes once you pay the platform maintenance fee. When you take the traditional route and open your brokerage business as an independent business owner, it can take months or even years to go live. Developing a brand new platform is a time-consuming process and the test runs and optimization also take time before it becomes good enough to go live. Not to mention the legal formalities for obtaining licences and permits for functioning as a legal entity in your chosen jurisdiction. But when you decide to operate under the umbrella of an established broker, you get the advantage of a quick setup process which allows you to go live within a few weeks. You will get the best trading platforms for your clients, which include MT4 for beginner traders and MT5 for advanced traders or those looking to trade multiple assets. Besides trading platforms, you will get access to different trading tools and educational resources. Because the white label package is a ready-made solution which requires minimal modification and customisations for branding, so, you won’t have to wait too long to enter the brokerage industry. When you are a new broker, you will need a lot of guidance and support to find a footing in the competitive space. Thankfully, white label providers will be there for you during every step. All complex processes will be handled by the platform provider. Because of this continuous support, you won’t have to spend all your time on technical processes. This allows you to give undivided attention to promotion and marketing to build your brand name. There is also a lot of flexibility as you are free to customise the platform and highlight your brand name by adding a unique personal touch to the platform. Besides this, you can even offer specific features and account types by choosing a suitable broker as your white label provider. For instance, if you want to offer swap-free accounts for Muslims, you need to find a halal forex broker offering Islamic accounts that are used by Muslim traders to comply with the religious rules. To talk about the cons of white labelling, the biggest challenge that you face as a new broker is the cutthroat competition in the forex brokerage industry. Traders tend to sign up with a well-known broker rather than a new broker. It will take some time to establish your brand as a new brokerage business even with the support of a white label provider. Another problem that you may face while operating as a white label broker is that the ultimate control of the platform lies in the hands of the primary broker. You won’t get any direct control over the processes which is a limitation. Just as the name suggests, an Introducing Broker is in charge of working as an agent who introduces the potential client to the broker that they are associated with. All the activities and processes for running the brokerage platform are handled by the broker and the IB is just there to help this broker get new clients by using their networks and connections. An IB is independent but is more like a middleman between an established broker and clients. Joining an IB program and becoming an Introducing Broker is very easy as there are no strict requirements. It is easier to get started and you don’t have to invest a lot to function as an IB, unlike a regular broker. When you enter the market as an IB, you get to connect with a wider client base with greater ease as you are working with another broker. You will get to build a lot of connections and also do networking which is very useful for making more progress in your career as a broker in the future. When you become an IB, your identity is dependent on the brand or broker that you are working for and there is no individuality. But if you look at white label brokers, they get to build their brand name and they have their individuality even when they are being supported by another top broker, which is missing in an IB program. The earnings of an IB depends on the trading activities of the clients that they bring to the main broker’s platform. Your payments depend on referrals and commissions which may not be consistent. Both White Label Solutions and the IB program are very beneficial for beginners who are eager to enter the brokerage industry but are unable to take the traditional route due to the complex nature of the business. It would be hard to say which of the two is a better option as both have their pros and cons and you need to make a choice based on your preferences and requirements. What is a Forex White Label?
Pros of White Labelling
Cons of White Labelling
What is an Introducing Broker (IB)?
Benefits of the IB Program
Demerits of the IB Program
Final Verdict
Forex White Label Vs Introducing Broker – Which One Is Better?
Becoming a brand new broker in the forex market is a unique business idea with a lot of potential for profits. Because the currency market Read More