Broker marketing in the UK post-Brexit

Bart Burggraaf

“So besides the potential nightmare of regulation, marketing-wise Brexit can be an opportunity for UK brokers” – Bart Burggraaf, MediaGroup Worldwide.

london

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.

Read this next

Retail FX

ThinkMarkets expands CFDs lineup to over 4000 ETFs and shares

ThinkMarkets has expanded its service offering by incorporating 2500 new CFDs on shares and ETFs on its ThinkTrader platform.

Retail FX

France regulator warns investors of Omega Pro, Businessempire.fr

France’s financial markets regulator alerted investors that scams related to Omega Pro Ltd are beginning to circulate, with the blacklisted firm capitalizing on the situation to run a range of “unrealistic” offers.

Digital Assets

Web3 platform Grand Time paid $2 million in token earnings to date

Community-driven Web3 platform Grand Time said its offering – which includes a multifaceted platforms and its native token – has been gaining significant traction highlighted by impressive operational metrics.

Institutional FX

FX volumes at MOEX halved in April as ruble gains gorund

Currency trading at Moscow Exchange (MOEX) halted its upward route in April as monthly volumes nearly halved from a month earlier.

Digital Assets

FTX US adds stock trading, fractional shares to crypto platform

FTX US, the American subsidiary of crypto exchange FTX has kicked off stock trading feature to its customers in an effort to compete with popular platforms such as Robinhood and eToro.

Industry News

UK FCA empowered to remove brokers’ permissions in 28 days

Businesses with permissions they don’t need or use, risk misleading consumers. These new powers will enable us to take quicker action to cancel permissions that are not used or needed.

Industry News

CFTC charges $44m Ponzi scheme but millions may have fled to foreign crypto exchange

The CFTC alleged that defendants transferred millions of dollars to an off-shore entity that, in turn, may have transferred funds to a foreign cryptocurrency exchange. None of these funds were returned to the pool.

Technology

Saxo Bank deploys Adenza to address Basel and EBA requirements

The integration of ControllerView will enhance Basel-driven capital calculations and reporting at Saxo Bank in support of the bank’s multijurisdictional capital and liquidity reporting requirements throughout Denmark, Switzerland and UK, with plans to expand into the Netherlands.

Executive Moves

ComplySci appoints CTO, CPO, and CLO to further regtech’s product expansion

ComplySci offers compliance software used by more than 1400 global institutions to identify risk and address regulatory compliance challenges.

<