White Labels differ from introducing brokers and regular affiliates in that they do not reveal who they are affiliates of. Technically, they are a business of their own who want to provide brokerage services under their own brand. This type of contract between the broker and the affiliate is also different in that white labels have a lot more customisable solutions that they can tailor to their business. Forex WL business cooperates with an existing forex brokerage firm based on an agreement with the brokerage to get access to the broker’s trading platform and liquidity under their own unique brand. The cost of a ready-made solution that considers your business type can go up to hundreds of thousands of dollars. In addition, keep in mind that as your client base grows, you will start paying more and more, and sooner or later, you will still need to buy your own trading platform.
The developer will charge a commission from the broker (for example, 50% of the profit from the platform), which will reduce the small income of the broker. A white-label broker is an established company that pays commission to the white-label provider for using its infrastructure and licenses. If there are technical problems or if new solutions need to be implemented, the white-label broker appeals to the white-label provider. The company may integrate payment providers, CRMs, and other components, but the turnkey solution doesn’t include them. Business owners may start their Forex brokerage through the LXSuite package. When you successfully enrol clients with your parent brokerage partner, you earn a commission based on their trading activities.
Cost Per Lead, or CPL, is a method of payment based on receiving commissions from clients who are referred. In this scenario, the partner is compensated if the potential client he acquires completes specific forms. Such a person will be motivated to provide their contact information if they are offered a free account with a bonus and no required deposit. The brokerage firm gains access to the personal information of potential traders in this way, and the partner earns a commission—albeit one that is less significant than in the CPA model. They are picked based on different criteria in accordance with each firm’s goals and needs. Some may require passing several tests to verify that a candidate’s knowledge is enough to be an appropriate representative of the company’s trading system.
Rather than act as a bridge between clients and brokers, WL has its own clients and only cooperates with brokers to use its services. To get more attention from new clients, IBs often offer promos and gifts in exchange for the trader’s commitment to trading with them. This kind of service can hardly be found in most brokers, so many traders are more interested in checking out IBs offers before choosing the Main Broker to trade with. Essentially you are just under the shadow of a much bigger firm without any identity of your own or any definable infrastructure.
Brokers using WL connections don’t need to run their own trading servers and hire experts to maintain them. For instance, B2Core is the CRM solution of the new generation that manages referral programs up to 30 levels. Brokers don’t need to keep rewards, payments and invoices under their management as everything is automated. Introducing brokers partner with primary ones, aiming to bring new clients. Many IBs are one-person operations, while others are much larger legal companies.
- In this article we will take a more in-depth look at both methods, see their differences in detail and come to a conclusion as to which is more suited for you to look into.
- Sure, it takes a lot more effort and investment to set up, it compensates by offering a much larger reward for the same.
- This means that clients who simply register and do not trade will not be counted towards the active clientele.
- Brokers don’t need to keep rewards, payments and invoices under their management as everything is automated.
We are a premium broker solutions provider, dedicated to delivering a wide array of innovative solutions and services that enable Forex brokers and financial institutions to minimize risk and maximize growth. You gain immediate access to their network when you hire seasoned what is white label forex broker traders as IBs. When you hire an IB from another company, you might gain access to their devoted customers even after they’ve left. In both situations, the higher the trading volume, the higher the broker’s revenue, and consequently, the more money you will make.
For that particular reason, we create the broker finder to help you customize your trading needs and discover the brokers that fit your standard. Oftentimes, clients encounter problems such as slow execution, frozen chart, system error, failed transactions, etc. Using an IB makes it easier for the client to file a report of these kinds of problems and get a fast response afterward. John Michael is a resourceful iOS game developer well-versed in all aspects of development.
Additionally, as we have seen, it is not uncommon for brokers to cheat their IBs and pay them less than they should. The White Label offers a wide range of technology and assistance without requiring you to open a brokerage yourself, which can be daunting. Launching a White Label has proven very popular as a fast and straightforward way to enter the Forex brokerage market. There are multiple ways to refer traders to a broker – from email marketing campaigns, to banner advertising on the IB’s website, to awarding special promotions, etc. White Label solutions offered by B2Broker are the ideal option to boost your positioning in the financial markets.
The infrastructure you will use will belong to a much bigger and established primary broker. You will have a lot of freedom as you get to manage relations with the people who decide to trade through you. The most important point to consider is with the revenue you will generate. Unlike the per referral commission of an IB, a White Label brokerage makes money based on the total trade volume done through their platform which is manifold higher than that of an IB. Sure, it takes a lot more effort and investment to set up, it compensates by offering a much larger reward for the same.
As for trading platforms, MT4 and MT5 are the two most popular solutions implemented by more than 70% of Forex brokers. Therefore, you should select those products that will empower your clients with the latest tools and instruments. Let’s explore the definitions, top pros and cons, and core features of those strategies to understand which one is the best to follow. “Opening a white label brand under an existing brokerage is a relatively quick and straightforward way to enter the Forex brokerage market”, says Mr. Pablo Schvartzman. “It gives you plenty of room to grow your brand, and it’s an excellent stepping stone to become a fully independent FX brokerage business. Revenue and compensation models are also far more flexible in a white label arrangement, and it all depends on the details of your partnership agreement.
Establishing a forex broking firm is a complex task and it also requires solid financial stability. Before we outline the differences, it’s important to define both terms. A white label is basically a customized, branded version of a forex trading platform. Many brokers use MT4 and https://www.xcritical.in/ MT5 but there are alternative options as well. In reality, becoming an IB is a simpler and more hassle-free way to start earning commissions and delivering traffic to the main broker. As an introducing broker, you do not have to deal with technical issues or account management.
For forex introducing brokers, one of the most popular paths is to start as an affiliate. After that, they can earn the IB title after introducing at least 5 active clients. Both affiliates and introducing brokers provide clients with services and products specific to a market. In short, introducing brokers are affiliates who earn commissions by referring clients to a broker. IBs inform the communities about a primary broker, focusing their attention on the core benefits.
This model is rarely used and is often provided by institutional companies that do not work directly with retailers and retail brokers. In contrast, brokers benefit from recommendations because they gain more clients and raise brand awareness. Such agreements typically call for an agreement between the parties based on local laws. The set up and operating costs of an IB business are much lower than a regular brokerage, as they do not entail technology and PSP charges.