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The Growth of Multi-Asset Brokerages

08 Jan 2021, 04:10

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Ross Newell, Business Development Manager at CMC Markets Institutional spoke with e-Forex in November 2019 to tackle the question, ‘Does the client always know best?’ The growth of multi-asset brokerages, fuelled in no small part by the popularity of MetaTrader’s MT5 platform, has left many brokerages scrabbling with the dilemma of exactly which instruments they need to offer to maintain client satisfaction. However, for each new asset added, this comes with a cost and a technology burden. Using the right liquidity provider or counterparty and doing so through the correct jurisdiction can therefore be critical in determining the long-term success of the business.

As an example, OTC pricing may be free to use, but sophisticated clients will be looking for exchange pricing – and this comes with a real cost. Furthermore, as Newell points out, those customer demands will change over time, so ensuring your counterparties can adapt to meet those needs is of critical importance. CMC Markets’ technology-centric platform combined with the ability to offer almost 10,000 different instruments ensures introducing brokers and white label providers alike are ideally placed to accommodate the inevitable calls for change.

With today’s investors looking at increasingly complex and long term trading strategies rather than simply chasing pips on a major currency pair, being in a position where you can cater to these wider demands easily will be vital when it comes to customer retention. Similarly, the ability to do this in a cost effective way can be instrumental when it comes to maintaining a profitable brokerage operation. Whether the client knows best is arguably secondary to ensuring you can always deliver a product they want to use.

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