Introducing Broker vs White Label. The Best Way to Maximise Your Revenue
Author: Rosemary Barnes
Reaching out to new customers is an on-going challenge for brokers and there are many ways in which this can be achieved using conventional methods of marketing such as advertising, emails, search engine optimisation (SEO), expo participation, and a variety of other lead generation tactics. All these tools will help you increase your customer base, but there are also other ways to increase a broker’s revenues, namely IB (Introducing Broker) and White Label programs. Both these options offer the primary broker an opportunity to increase their customers and boost their revenues in a shorter timespan and with less effort.
Introducing BrokerAn IB’s role is to solicit clients for the Primary Broker by partnering with successful traders, money managers, investment advisors, financial website owners and other sites generating high visitor traffic. The aim is to recommend the broker’s services and in return, get rewarded for the new clients that they bring. This may come as a fixed return or a percentage based amount relating to the future trading volume the new clients will make with the broker. Referring clients to a broker can be done in multiple ways, from advertising the broker’s banner ads on the IB’s website, email marketing campaigns, or promoting special that offers the broker may have, for example. An IB will receive a unique link that the broker uses to track any new customers that are introduced, along with access to a special area, allowing the IB to download promotional materials to start targeting clients. If a client subsequently opens a trading account with the broker via the reference link, the IB will be rewarded in accordance with the agreed fee structure. Generally speaking, becoming an IB is a fairly good entry point to the Forex brokerage world and many IBs have reported success with their efforts.
White LabelA White Label program differs from an IB in that those interested in such a program actually prefer to open their own forex brokerage and have their own brand, rather than referring clients to the broker. Essentially, a White Label is an agreement to market another broker’s trading platform as if it were their own and is suitable for those looking to set up a Forex broker and establish their own brand in the industry. With a White Label, the broker or technology provider will provide the whole solution including the trading platform and back-office support, and even allow the company to have its own brand. As White Labels earn from the trading volume of their clients, they function in a similar way to a regular brokerage. As far as the White Label is concerned, it is a much cheaper way to launch a business as the provider can help with all aspects, from providing the latest technology, legal aspects, building a website and marketing programs. Other benefits include the quick launch of an online broker with regular support, avoiding the setup and running costs of a full dealing business model which requires a licence, acquiring hands on experience in the business, running your own independent brokerage, working with your own clients rather than referring them, and being able to control your own business to a large extent. For the broker, it is an effective way to diversify the income stream through licensing revenues. White Label brokers run their business at a whole different scale to IBs. A White Label brokerage is a complete operational setup, with its own risk management, PSPs, customer support, etc. White Label agreements can take a variety of forms from simply leasing a trading platform and back-office support, to a complete entity with its own brand.
Introducing Broker vs White Label – Which is Best For You?Introducing brokers and White Label businesses are quite similar in that the broker’s end goal is to acquire new customers that will trade on the primary brokers’ platform. In both cases, the higher the trading volume running through the platform, the higher the revenue of the broker, and the more the profit you will make. The main difference between the two models lies mainly in the scope of their functions and in their degree of autonomy. While Introducing Brokers simply act as the go-between the existing broker and their traders, White Labels are proper businesses with more independence and control over their clients. If you’re planning to be a big player in the Forex industry, an IB is not really an ideal model since you are essentially an agent of an existing business, without your own brand identity or brokerage infrastructure. In addition, it not unheard of that brokers may cheat and pay their IBs less than they should. The benefits of a White Label program meanwhile are numerous, as we have seen. Revenue and compensation models are also far more flexible in a White Label arrangement, depending on the details of your partnership agreement. Overall, you get access to a whole range of technology and assistance without having to undergo the enormous task of opening a brokerage by yourself. The price of opening a White Label is indeed higher than an IB, but the reward is also significantly higher. Overall, launching a White Label has proved to be a very popular option since it is a quick and straightforward way to enter the Forex brokerage market.
A Force To Be Reckoned WithAs we have seen, although Introducing Brokers may find it easier initially, White Label brokers can establish themselves as a major force in the market and even consider becoming an independent broker in 1-2 years. In order to do this, choosing a reliable technology provider is one of the best ways to ensure your business’s future success. B2Broker is a leading White Label technology provider, offering MT4/MT5 solutions that are sought by Forex brokerages and other players in the financial industry including cryptocurrency brokers, prime brokers, prime of prime brokers, liquidity providers, hedge funds, banks and HFT & prop-traders. B2Broker’s White Label solutions enable brokerages to choose from a variety of options which include:
- Branded MT4/MT5 trading platforms
- Web-based MT4 platform
- Mobile and tablet versions of the applications for MT4/MT5
- Configuration of trade groups for your type of account
- Configuration of trading instruments and commission for them
- Single margin account for STP group accounts
- MT managerial terminal accounts
- Automatic advanced daily HTML report with all parameters configured to personal specifications
- Forex, CFD and crypto liquidity with a wide variety of trade tools
- Ready-made integrations: multi-level IB solution, single-level IB solution, PAMM/social trading platform, Trader’s room, payment gateway & cryptocurrency payment gateway
- White Label service provided on our MT4/MT5 servers in Equinix NY4 (New York)
- Management and maintenance of all equipment, infrastructure and software in data centers excluding 3rd parties
- 24/7 technical support in 6 languages (English, Chinese, Spanish, Arabic, Russian & Greek)