What next for white labels, IBs and affiliates post-ESMA? Can a return to old school investment be the solution? – Guest Editorial
“A question I was asked with increasing frequency was why opening an account to buy and then trade CFDs was so easy, when doing the same for physical shares was so difficult – and expensive” says London based Dabbl founder Mark Ackred
Mark Ackred is CEO and Founder of Dabbl, the world’s first mobile-only electronic stock trading platform for retail customers. He has a very long standing career in the FX and electronic derivatives sector, with senior positions at IFX, CMC Markets and City Index marking out his expertise.
It’s been a torrid time for the retail derivatives market over the last couple of years. Changes in regulation have arguably been long overdue, but the sweeping approach to commission payments, leverage and indeed the underlying products that can be promoted risks undoing much of the progress that entities across the board have made when it comes to engaging an entire generation with the concept of ‘investing’.
On top of this, the fintech revolution that has been driven – at least to an extent – by the CFD, spreadbet and FX world, has taught us an awful lot in terms of how to interact with clients. Developments by those at the traditional end of the retail financial spectrum are now being dominated by lessons learnt in the derivatives space over the last decade.
We realized back in 2016 that change was overdue. A question I was asked with increasing frequency was why opening an account to buy and then trade CFDs was so easy, when doing the same for physical shares was so difficult – and expensive.
To this extent, I set up Dabbl – the UK’s first app-only stock broker that would make buying shares as easy as taking a selfie, supported by proprietary technology that would ensure our clients weren’t left to make recurring payments for the privilege of using substandard legacy software.
Dabbl went live in the app store earlier in 2018 and our intention is to continue to onboard clients directly, but understand that the combination of our technology and the marketing acumen of many players in the derivatives space holds a lot of synergies. Yes, there’s the option of jumping offshore in a bid to preserve the status quo, but we’re suggesting that a return to physical ownership can yield results for those intermediaries who now feel somewhat disenfranchised.
Depending on the existing regulatory structure of the partner, we can deliver our services in a number of ways to best suit their needs. From providing access to our order management system using an API through to a full white label complete with customer support and anything in between, our component-based system ensures that this couldn’t be further from a one-size-fits-all proposition.
The wider industry has done great things in terms of providing quick and easy ways for the mass market to gain economic exposure to a whole raft of financial instruments. The moveable feast that is regulation means that right now we’re in a state of flux, and in that respect we are talking to derivative brokers about how they can offer access to physical shares. The idea behind this is that not only do they get access to a new asset class, but they also get to retain a quick onboarding process, straight forward transaction processing and very low costs.
CFDs, FX and spreadbets have opened the eyes of many to the world of finance. With our research showing that the next generation of investor increasingly wants to be owning assets – after all a house is out of the reach of many – we stand ready to help those who want to continue to provide a flexible, regulated trading solution for their customer base.
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