Starting up a brokerage may seem like an incredibly daunting task when taking into consideration all the aspects of the business that have to be taken care of. However, with the support and assistance of brokerage consultants, setup is now massively simplified, making the process smoother than ever before. Broctagon Prime offers such brokerage solutions, giving startup brokers the ease and flexibility of setting up in the form of an individually-tailored liquidity solutions suite.
When establishing their firm, brokers would have to think about location, recruitment, costs, regulation and resources, among many things. Here is a more detailed look at what a brokerage needs.
Firstly, deciding which part of the world you would like to establish your brokerage in is really important. The initial setup costs may vary greatly depending on the country you pick, which should be factored into the decision-making process. Take for example: Placing an office in central London may seem appealing due to its impressive location, but renting a 100m2 office can cost as much as €185K per year. Measure that to opening a branch in Cyprus, which would cost a tenth of that price. BroPrime, regulated by Cyprus Securities and Exchange Commission (CySEC), takes advantage of the lower location pricing by establishing its office in Cyprus. In doing so, we are able to utilize the cost-savings and pump them into other sectors that matter, like enhancing technological developments, to ensure our brokers are working with the best.
The location of a branch also very much affects the team a brokerage can employ. In places like Cyprus, there are many brokers and plenty of skilled workers. A broker might find it much easier to gain a competitive edge by hiring a great team.Other factors to consider when selecting a location include time zones, regulatory bodies and taxation.
A crucial component to being a profitable and successful broker for clients is having a capable team. Traders will enjoy a more premium trading experience if the team provides great client support. The employees a brokerage hires need to be able to cope with the steep learning curve of the trading world, and have sufficient knowledge of forex lingo in order to provide exemplary customer support. Just like it’s important for a trader to speak to their account manager in their own language, the account managers need to be able to communicate using the appropriate forex and trading terminology. Brotagon’s team of highly-trained specialists not only have the technical expertise to answer your questions, they have the dedication to provide 1-on-1 customer support in order to best understand your needs.
As a broker, your product offerings make up the core of your business. Crafting a variety of financial instruments to offer is important because this allows you to cater to different types of traders, as well as allocate the resources to manage them. Forex traders generally invest much time into analysis and strategy, and thus will probably be looking for account managers to discuss and analyze their trade decisions. Due to the nature of the trade, traders often look for a fixed outcome in a shorter time – so they are more likely to respond to automated contact methods like email rather than lengthy phone conversations. The products you choose to offer will alter your business approach. BroPrime offers liquidity for a wide range of products, from forex currency pairs to metals, all because we hope to help you achieve a diverse portfolio.
Every successful business owner needs to be forward-looking and ensure that they have an accurate budget that takes into account all of the costs the firm will require. Some things to be considered in budget for a broker would be minimum capital requirements, salaries, websites, marketing, platforms and more.
While focusing on budget, it is essential to strike a balance between allocating funds for the sales department and customer service. Existing clients account for a larger portion of the company revenue than new clients. A broker has to make sure that all of the costs listed in its budget are covered by the revenue it brings in from its clients.
After thoughtful consideration about all the decision-making processes above, a broker has to put everything together to develop and create a business plan. The detailed plan of action will let a broker look at everything that is needed to launch the firm.
The brokerage will have to start brainstorming other logistical things like websites and domains, platforms, payment service providers, coverage, marketing, account types, HR, budgets, location and so much more in greater detail.
The key to establishing a brokerage firm lies in the careful planning of many different areas. Turnkey solutions providers like Broctagon exist to take care of all these needs for aspiring business owners, making their setup a smooth and successful process. By drafting up a detailed plain with our help, a broker will gain a step-by-step guide to embark on the road to successful brokerage and beyond.
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