Grey Label Vs. White Label
In the past months we’ve heard more discussions related to “grey” or “soft” labels. Since this seems to be the latest buzzword hitting the industry, we’d like to provide some background about this new product and also offer our insight.
A grey label is an appropriate name as it toes the line between an IB relationship and an MT4 white label. Essentially, a broker offering a grey label allows the potential partner to promote their business using the direct name of the broker, rather than a branded, white label name. Unlike an IB relationship, a gray label partner has greater control over customization and the client relationship, hence the appeal.
We’ve taken a firm stance on grey labels and do not encourage them.
There are two reasons. The first is that many brokers are not willing to risk their name and reputation so easily. Although an agreement can be signed, it’s difficult to enforce until the damage has already been done. A broker’s reputation can take years to build but only weeks to destroy, think IronFX. For this reason, it’s difficult to find a broker who is willing to take on such risk.
The second is related to capital limitations.
In the past 15 years, technology has been the major disruptor that allowed the retail FX industry to take off. This same technology that any white label operator now has at their disposal, would have cost several millions in the mid to late 90s. Today, a white label can be started at not even a fraction but a very, very small slice of that original $1 million fee. As it is, the current barriers to entry in the FX industry are extremely low at just the white label level.
As industry consultants, we advise anyone seeking a gray label to work on building a solid IB-relationship with a few key partners (something we can assist with). Once a steady stream of revenue can be established, we then feel it’s a good idea to consider beginning a white label business. A grey label is only a distraction along the path of success in this market.
If you’d like to learn more about MT4 white labels, the costs, and an overview of a full solution, don’t hesitate to contact us:
In addition to our specialization in FX broker licensing, we can also assist you with:
Have a look at some of the additional services our clients have found to be helpful in the growth of their business.