Broker marketing in the UK post-Brexit
“So besides the potential nightmare of regulation, marketing-wise Brexit can be an opportunity for UK brokers” – Bart Burggraaf, MediaGroup Worldwide.
Perhaps the biggest worry for brokers after Brexit is passporting. Will EU brokers be allowed to do business in the UK and will UK brokers be able to do business in the EU?
I personally think that when the UK leaves the EU, there will be a comprehensive package on the table to ensure passporting continues. But you never know. Most of the larger UK regulated brokers have been regulated elsewhere, in addition to the UK, and for those outside the UK that want to get traders there; well the UK is an important market, but one of many. Plus you will have at least a few years to prepare, so perhaps things aren’t that bad.
So besides the potential nightmare of regulation, marketing-wise Brexit can be an opportunity for UK brokers. Whichever way the Brexit process itself goes, they can use this as an opportunity to differentiate themselves from all the others. For instance, in case the UK implements policies that will make it much more independent of the EU, brokers can talk to foreign traders about the advantages enjoyed by many “offshore” jurisdictions: differentiation, privacy and security. Plus a good regulator.
If it goes the other way and UK gets close to the EU, there is still independence of policy and regulation that brokers in the EU cannot boast about. As you can probably see, I am not an expert on regulations, but I hope the idea is clear; things can be spinned in a positive way.
Before the process happens though, there might be extreme volatility in the markets and mistrust of UK brokers from traders, especially foreign ones. Therefore it is advisable for UK brokers to focus on communication showing (potential) clients that they are stable, have plenty of cash reserves and aren’t going anywhere. Getting involved in the ongoing debates about Brexit and the implications, publically and deliberately, is a good idea too, to show your companies’ leadership and involvement.
For non UK brokers getting significant UK business things will be a bit trickier, but they can make claims about EU stability (although…) as being a non UK regulated broker. Furthermore they are not as exposed to the UK market and so UK traders might trust them more in light of volatility and general industry turmoil.
It is a good idea to communicate messages in this direction to the market early and often. Of course there is always the option of getting regulated in the UK as well, but until there is clarity, perhaps this is not the best idea.