Exclusive: Age of multi-asset trading gains ground as London Stone Securities brings stockbroking to the mass market

During the course of this year, the need to diversify from offering purely spot FX instruments has become a major part of development and progression for many retail electronic trading companies, especially after the volatility caused by the Swiss National Bank’s removal of the 1.20 peg on the EURCHF pair back in January, exposing the effects […]

Exclusive Age of multi-asset trading gains ground as London Stone Securities brings stockbroking to the mass market

During the course of this year, the need to diversify from offering purely spot FX instruments has become a major part of development and progression for many retail electronic trading companies, especially after the volatility caused by the Swiss National Bank’s removal of the 1.20 peg on the EURCHF pair back in January, exposing the effects of extreme and sudden volatility in such a liquid market as foreign exchange.

Many companies have sought to offer indices and commodities – especially precious metals – in order to attract customers wary of placing so much emphasis on currencies, and to balance the risk internally by leveraging other asset classes.

Jai Singh
Jai Singh

Large liquidity providers such as Sucden Financial have the capacity to do this on a vast scale, with minimal counterparty risk due to the firm’s ability to secure its eFX operations with the vast commercial backing of its raw materials, commodities and physical delivery divisions, however for retail firms, especially outside of the UK, this has not been so easy as spot FX has thus far been the de facto modus operandi.

British companies have had an advantageous lead in diversifying to other classes, as they often use proprietary platforms to offer contracts for difference and spread betting, an ideal starting point for bringing other types of OTC contract within the realms of the retail customer. IG Group Holdings plc (LON:IGG) stockbroking platform which headed onto the market last year is a case in point.

Today, another London-based firm joins the fold, although this time it is wealth management company London Stone Securities which has begun working on the development of a new technology solution for its retail stockbroking platform.

London Stone Securities provides wealth management solutions based on various asset classes, including ETFs and stocks, as well as FX and CFDs.

In order to gain further perspective on the rationale behind the new stockbroking platform, FinanceFeeds met with Jai Singh, Head of Equities and Derivatives at London Stone Securities. Mr. Singh explained that London Stone Securities is an independent stockbroking firm based in the City of London that is authorized & regulated by the Financial Conduct Authority.

As an independent firm, a bespoke personal service tailored to individual needs is able to be offered. Whether clients are experienced traders or a complete novices, the company’s advisory team of brokers can help them meet their objectives through timely and well researched ideas.

“We are forever scrutinising our client trading environment, analysing and evaluating where potential improvements can be made.

Experience has shown that stockbrokers that specialise in our space can at times be guilty of having a slow reaction time to potential trade opportunities, for example trading on the back of a merger or an acquisition.

This requires a great deal of human capital for firms who have stockbrokers that are often dealing with large client books” – Jai Singh, Head of Equities and Derivatives, London Stone Securities.

Having identified this as a weakness, London Stone Securities has entered a partnership with Silicon Markets, a trading platform specialist and CFD provider.

Matthew Kirkham, Co-Founder of Silicon Markets today explained to FinanceFeeds

“Boutique stockbrokers encounter very similar problems. They use grey labels of generic platforms from large providers and focus very little on technological improvements.

This leads to less value for the client, and less differentiation as a broker. By having a strong focus on bespoke technology designed specifically for London Stone Securities; clients are able to: see more specific and personal information, make more informed decisions about their investments and execute them more efficiently.

We are excited to enter this partnership with a dynamic and vibrant firm, by introducing disruptive technology and adding value to their clients. London Stone Securities has a well-known reputation for really caring about their clientele and continually improving their approach, which is refreshing to see.”

Essentially, client grey labels provided from large platform providers are difficult to make bespoke. London Stone Securities’ initiatives will involve introducing personal widgets and applications directly inside the platform, which communicate trades to the firm’s client book. These are filtered automatically based on risk preference and preferred strategy. Clients will be able to choose whether they wish to know more about the potential trade which will alert the firm’s stockbrokers and ultimately result in a better utilization of resources; as the stockbrokers will only contact the clients that wish to be traded or understand more.

It is refreshing to see a boutique stockbroker be so conscientious toward client accessibility through technology. Jai Singh went on to add

“It’s important that we are able to identify where we can improve for our clients, ultimately we would hope that our competitors will follow suit. It’s great to have a competitive edge however we would much prefer that this technological advance became industry standard as anything that benefits retail investors whether they are clients of our firm or a competitor is worthwhile.

We have a lot of ideas of how to add value to clients using disruptive technology combined with our personal approach which we feel will provide a trading edge”.

Innovation through Fintech is becoming more commonplace, utilising disruptive technology can be the difference between success and failure in the Financial Services sector. Companies like London Stone Securities are ahead of the curve with the great advances in technology in order to improve the benefits for their clients.

 

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