How Much Does it Cost to Start a Forex Brokerage? 5 Key Considerations
Entrepreneurs or investors who wish to launch their own forex broker often approach us about the total costs involved in setting up a forex brokerage. Having successfully helped numerous forex brokers go from the preparation stages to a full launch of their business, we are well prepared to provide some guidelines.
#1. Staff Costs & Employment Costs
Experience has shown that new forex brokers come in all shapes and sizes. We’ve worked with new white labels with plans to target the entire globe as well as fund managers who are only interested in managing a couple PAMM accounts for their friends and family.
The type of forex brokerage you intend to launch will determine not only how many staff to employ but the specific roles you wish to fill. At a minimum, any new forex broker should consider the following roles to be indispensable for the successful launch of the business: compliance, client support, accounting, and sales
#2. Technology Costs – White Labels, Trading Cabinets & Websites
The technology required to build your own forex broker can be boiled down to two main areas. First, you’ll need to design a website for your broker, something we can help out with as we specialize in custom website design services for forex brokers. New brokers may also want to consider a Trading Cabinet as a complement to the website as well as a Back Office to better manage and automate the business.
Secondly, new brokers must be mindful of the costs involved in establishing the white label technology, which is the software you’ll require to operate the business. Although MT4 white labels are the most common, there are other platforms such as cTrader or Condor that should also be considered before taking a final decision.
Without a strong marketing effort, it will be impossible for your business to achieve growth. Even if you are beginning with an existing client base, taking your broker to the next level will require an investment in marketing. This will involve either developing your own marketing strategy, or partnering with specialists who are offering data and traffic services.
#4. Incorporation, Banking, and License Costs
Even brokers who start off as unlicensed entities, for example in St. Vincent and the Grenadines (SVG) , will need to include the registration costs of the business and renewal fees into the equation. Additionally, there are fees charged by banking and payment providers that new brokers must factor in. Brokers who are licensed will have further costs to consider since most regulators will require a physical office, local staff, as well as additional compliance and reporting.
#5. Liquidity & Risk Management
A final consideration is the liquidity, or pricing that your traders will see in the trading platform and ultimately execute trades from. Generally speaking, liquidity providers will charge a monthly fee for their services as well as for the total volume executed. Depending on how you structure your business, you may also have fees for the risk management component.
Start Your Own Forex Brokerage with Atomiq Consulting
We hope these guidelines were helpful in determining the best approach to take when launching your own forex brokerage. As can be seen from this article, our knowledge and experience make us an ideal partner to help you successfully start your own forex trading business. To explore this opportunity further, ask us specific questions or obtain a price quote, don’t hesitate to contact us!
Have a look at some of the additional services our clients have found to be helpful in the growth of their business.