“Mind The Gap!” – The life and times of a man on the move Episode 45

In this weekly series, I look back on what stood out, what was bemusing, amusing and interesting during my weekly travels, interesting findings within the FX industry and interaction with an ever-shrinking big wide world. This is purely observational and for your enjoyment.

Thought Leadership Conference Special

“A man is known by the company he keeps” – Aesop

Last week was a milestone moment in commercial networking for senior executives in the FX and multi asset trading industry, in that the FinanceFeeds Thought Leadership Conference, held at The Ned in London on Tuesday, May 7 was the very first of its type.

My week began with a full and finely tuned list of attendees which consisted of some of the world’s most respected FX industry executives, and equally elevated members of the global asset management, algorithmic development and institutional proprietary trading business, most of whom had over 30 years of experience.

As the week began, I considered the importance and value of private conferences within the senior level activities in our industry, and looked at how important relationships between those who innovate and move our own sector of the financial markets business forward and those who have made substantial marks on the wealth management, hedge fund and algo trading business.

This is without question a time at which the twain shall finally meet.

As the morning progressed, it was very clear to see the vast differential between the companies that view corporate partnerships as a long term business synergy in order to develop high quality business via a skill base earned over a series of years, and that by introducing a new, highly experienced set of executives to our equally esteemed leaders, efficiency and quality ascend tremendously.

One of the objectives of this particular conference was to establish it as a series in which these exclusive opportunities are presented on a regular basis, via invitation and selection only.

By Monday evening, many of the key attendees had met each other, and the interaction was one of development. There was not a mention of leads and CPA deals throughout the entire course.

This cemented my longstanding belief that the fabric of our industry is dynamic and sophisticated enough to get completely away from that low end model of affiliates and CPA, and is now absolutely able to stand proud in front of Silicon Valley algo trading developers, derivatives traders with their own in-house developed platform, and commodities dealers with massive reserves of physical assets and their own connectivity to venues.

Meeting with specialist traders such as Alberto Peano, who had joined us from Italy, was an excellent pre-conference experience as he explained how his firm, TradingAround, had for many years traded managed accounts on Chicago’s major exchanges via Alberto’s in-house developed platform.

This is the type of relationship that we should all be looking for very seriously.

By Tuesday, over 120 professionals had convened at the Thought Leadership Conference at The Ned, and the response from attendees was unprecedented in that I was personally inundated with genuine commentary on how valuable it is to be able to engage these two highly compatible sides of the capital markets business.

Discussion during the panel, led by Dr Richard Smith of TradeSmith in Florida, followed by a highly interactive debate including the aforementioned Mr Peano, along with Struan Lloyd, CME Group’s Head of Global Repository Services for the APAC region and Silicon Valley-based trader and software expert with 40 years experience Bradley Rotter, some vital and current subjects were discussed in confident detail, engaging the audience of executives in a new way.

Scandinavian Capital, Sweden’s first electronic brokerage which is owned by experienced asset managers was an instrumental part of the organization of the event, along with Californian data enrichment scientist Nathaniel Hansen of The Socializers, who has not only demonstrated to brokerages how to get away from the lead business and actually gain proper intelligence on their customers, but has led major data projects for global giants including IKEA.

Every aspect of trading was discussed, and how vendors of technology – in our industry some of the most adaptive and highly skilled software professionals in the entire financial industry – are better positioned than Tier 1 banks to drive the institutional capital markets business forward.

Which brokerage wouldn’t want a portfolio of traders with between $2 million and $10 million in assets under management rather than try to get a MT4 white label in a dubious offshore jurisdiction to understand what liquidity is and prize them away from their lead buying and gaming activities? Form an orderly line here!

This is the key to our future, and it does not need to be decadent or extravagant either. Private events which gain the attention of the right people are vital for us all to drive our entire industry in the right direction, and it is clear to me that the right direction is upward, toward the level of business at which Tier 1 banks are not going to extend a direct prime brokerage agreement, yet are managing some very good quality funds and investments.

There was no talk of marketing, no talk of acquisition costs and ROI, or of leads. New technology, how to match correctly aggregated liquidity to institutional funds and diverse investments was central, and the level of decorum and business acumen absolutely reassuring.

If XTX Markets can oust the Tier 1 banks in the market making and liquidity management sector, largely due to its OTC FX-orientated ability to fill orders and specialize in getting this right for brokers whereas banks have lots of overlaid legacy technology and long development cycles, then we are in the absolutely right place now to lead the way in the institutional trading space, and away from the leads and white labels of yore.

The post-conference comments from all attendees at this level was confirmation enough.

In these exciting times for our esteemed industry to move forward, I look forward to being a fundamental part of such advancement.

Thank you all for participating, and we can all look forward to the next Thought Leadership Conference.

Have a super week ahead!