Traders need good service and privacy – Guest Editorial
Worried about the global regulatory reforms? Here is a comprehensive look at the future, and method, by which traders can get the most from the retail FX market
The management team at EagleFX details how to look after your clients and ensure they get the most modern and complete trading experience, whilst safeguarding their privacy.
Over two years ago, FinanceFeeds investigated a reasonably prevalent situation in which some small to medium sized retail FX brokerages with CySec regulatory licenses which bind them to operating under the European Securities and Markets Authority (ESMA) rulings and MiFID II market infrastructure directives have been onboarding clients to offshore entities in order to circumvent rulings on trading terms.
Aspects like leverage restrictions and ‘best execution’ procedure were parameters that certain firms sought to avoid, and in some cases continue to do so, by maintaining an office in Cyprus with a CySec license that has just a few clients on its books, whilst bringing on board the vast majority of clients from non-European jurisdictions (most Cyprus based brokers do not have any clients in Europe) via an offshore entity and offer over 1000:1 leverage with B-book execution.
A few years ago, a detailed report by FinanceFeeds looked into the corporate and regulatory stance on this practice, the latter of which was one of complete apathy, yet nothing has been addressed since.
The focus by the majority of high volume traders on the two aspects of leverage restriction and the lack of adherence to it by some regulated entities has actually served to cause distrust among retail FX traders, especially those with experience and those who are responsible for managing the accounts of their own customers via Multi Account Managers (MAM).
Regulatory reforms are of course well received by most industry participants and traders, however if they are going to curtail the ability for traders to continue their own strategies whilst offering very little protection due to brokers heading offshore to regions which allow high leverage but have absolutely no system for recourse if anything goes wrong and no accountability to a responsible authority, then surely this has had the absolutely opposite effect.
There are other regions in the world with high quality talent and a detailed understanding of the FX industry that do not have the saturated market that prevails in certain regions which have become almost aircraft carriers for white label FX brands, and do not carry the stigmatic reality of a series of shell offices for companies that realistically only have a token presence within the developed markets yet have their operations, client holding bank accounts and management located in the Middle East or South East Asia.
In today’s retail FX market in which many firms who approached a proper financial markets economy with the mentality remeniscent of their affiliate marketing backgrounds instead of doing so by emulating the high quality established firms that built this business sector, there are a lot of potential clients who are jaded due to the bombardment of almost identical telephone calls from several almost identical brokerages and MetaTrader white labels due to the sales staff of such firms having gone around from company to company, often nefariously taking leads with them.
This is not the way to approach potential new business, nor is it the way to safeguard the retail FX business from further scrutiny by regulators.
In order to give clients what they want and still maintain a good quality standing in the FX industry, a pragmatic approach needs to be taken and that could well be more focused around customer service, knowing client requirements better and serving the needs on an individual basis instead of seeing every new client as an ‘acquisition’ or even worse, in digital marketing speak, a ‘CPA’. This is a financial services business, and in many ways should be seen as the future of financial services as most people nowadays wish to have self-directed control over their entire financial portfolio whether that be a stock trading account or their annuity contracts.
From our perspective, EagleFX understands the need for privacy when it comes to sharing information online, providing a safe space for traders to effectively trade anonymously. A huge bugbear within the Forex industry is indeed cold calls from past brokers who pass on contact information or from sales teams that indeed take personal client information with them.
To get an account with EagleFX fully verified, one must simply provide a true email address and verify the authentic email once a verification email is received. EagleFX does not believe in delays and like their clients to be able to trade right away.
Given that EagleFX is to a large extent digital asset orientated in terms of deposit and withdrawal methods, there is no need for further client information such as bank details when withdrawing funds which modernizes the transaction process between client and broker, resulting in faster deposits.
All in all, even the most vigilant online traders should be able to rest assured that their personal will not be shared with any third party company.
By offering attractive trading terms that are not reduced via kneejerk regulatory actions but giving your clients a proper, good quality and personal service, the way forward may be brand loyalty and quality, rather than switching from one identical yet anodyne brand to another or being given a bad impression of retail FX by over zealous regulators who do not properly understand exactly what they are restricting, which in turn leaves doubt in a customer’s mind instead of gives them peace of mind.
Many successful businesses in other industry sectors have gained the absolute trust of their customers not by regulation or government crackdowns, but by providing a quality service that involves the customer in every aspect of their relationship.
This is the way forward for retail FX.
The subject matter and the content of this article are solely the views of the author. FinanceFeeds does not bear any legal responsibility for the content of this article and they do not reflect the viewpoint of FinanceFeeds or its editorial staff.