Round table with the Advanced Markets senior management team: Up close and professional in Boston

Just ten months have passed since the Swiss National Bank’s decision to remove the 1.20 peg on the EURCHF sent a tsunami of volatility through the entire FX industry, and signaling the end of the road for a number of companies.

Whilst there were very few positive outcomes, one particular company that benefited was Advanced Markets and its joint venture partner Fortex.

Natallia Hunik explains her leadership of Advanced Markets’ sales division to Andrew Saks-McLeod

 

Advanced Markets and Fortex gained almost the entire sales and marketing department from Boston Technologies.

How did this really happen?

Today, at the plush, typically New England-style offices of Advanced Markets in Boston, Massachusetts, FinanceFeeds held open discussion with the entire team, led by renowned senior executive Natallia Hunik.

Ms. Hunik had spent several years at Boston Technologies and had risen on her own merit to VP Worldwide Sales, with one of her many achievements having been the establishment of offices in London, Shanghai, Tokyo and Jakarta.

“We all came as a team to Advanced Markets and Fortex. We were looking to go to a new company as a whole team right from the outset.” – Natallia Hunik, Global Head of Sales, Advanced Markets & Fortex

“Rather than approach companies to find out if they would take an entire sales team, we positioned ourselves as an integrated unit and actually did due diligence on companies, to work out whether they are the right provider and have the right product that we can drive to success.”

Confit du Canard with Advanced Markets at La Midi in Boston, Massachusetts

 

“We understood the level of competence that everyone is held to in this company, and that it is a high quality enterprise, therefore our professional relationship as an integrated team has good synergy with the quality of Advanced Markets” she said.

During a most agreeable confit du canard and veal cannelloni at Boston’s ‘Le Midi’ boutique French restaurant which is opposite Boston Public Garden’s famous boating lake and frog pond, the team elaborated on some important detail with regard to the company’s direction.

Yuhan Mo, the company’s Operations and Marketing expert, highlighted a very interesting dichotomy between the way that Advanced Markets handles its Chinese business.

Never mind IBs – Try full China-focused brokerages with dedicated connectivity

Whilst most firms operate an IB model, using referring partners to send business to brokerages, Advanced Markets utilizes its methodology as a prime brokerage and wholesale provider.

“We have a hosting facility at Equinix’s HK3 data center, and can assist with the setting up actual brokerages in the region and help those brokers efficiently expand into China.” said Ms Mo.

“Most traders in China experience platform freeze and latency when operating without this type of technology infrastructure. It’s important to remember that China’s censorship and firewall systems interfere with internet speed within the country, primarily due to the extra layers within the internet between China and the “outside world”. Because most brokers host their servers either in Europe or US, Chinese traders are having hard time getting a stable connection to their brokers trade servers and are often exposed to intermittent price interruptions and loss of trades, especially during volatile economic data releases”, continued Ms. Mo.

“These days, execution speed is more important than ever, as many sophisticated Chinese traders and money managers are using automated trading systems to transact their orders. As a full service provider to FX brokerages, we can provide powerful solutions to these very real problems, allowing firms to build their business on a solid foundation..”

“Normally, a trade order is routed from China to either New York or London due to fact that most bank pricing/liquidity originates at NY4 or LD4 data centers.  Chinese firms are often hosted with second and third tier ISPs and there have been many instances in the past where orders been dropped because of an internet connection time-out or because the connection is either unstable or blocked during important economic news releases. Our cutting-edge infrastructure overcomes these issues, and we are further adding to our capabilities by implementing an additional dedicated line from Hong Kong’s HK3 to New York’s NY4 datacenter.” – Yuhan Mo, Operations and Marketing for APAC, Advanced Markets & Fortex.

The company’s ethos as a provider whose customers include China-focused brokerages in New Zealand, Hong Kong and other surrounding regions, the conversation led to Australia, a region very familiar to our very own Noam Stiekema, who brought into the conversation the similarities in the sophistication of the market itself, and its proximity to China, Indonesia and other important nations in the region.

“The level of sophistication is very high in Australia. It should be regarded as very similar to the US in terms of structure, and the investors are sophisticated. Unlike some regions, but in line with the US, many Australians have stock portfolios, and are astute.” – Noam Stiekema, FinanceFeeds.

Ms. Hunik agrees with this entirely and is enthusiastic that the firm should naturally be number 1 there. “We have clients in Australia and all the prerequisites to transact business there. We are locally-regulated and are becoming very well known in Australia. In fact, one of the primary investors in our company is Australia’s Macquarie Bank. The difference in time zones between Australia and the rest of the Western world, however, is a real logistical problem ” she said.

Natallia Hunik, Richard Perona, Yuhan Mo, Anya Aratovskaya, and Katya Samardina

 

“We are looking to overcome this by eventually establishing some local presence in Australia, where we already have a wholesale STP license.  As an institutional provider we cannot take retail clients but, regardless, we would have no desire to compete with our valued customers anyway.”

FinanceFeeds recalls that Saxo Bank came in to Australia and purchased CBA (Commodity Broking Australia) about 4 years ago. Australians like this kind of sophisticated product, but it is very important to be local.

“We have a lot of aspirations for growth” enthused Ms. Hunik. “We have presence in London and our partner, Fortex, recently opened an office in China. The growth regions are mainly within Asia, and we specifically want to now look closely at South East Asia. Japan is also a great market that we are working on, but it requires some nurturing” explained Ms. Hunik.

Ms. Hunik considers Indonesia to be an interesting market, and FinanceFeeds has noticed that there has been a considerable interest in that region from many companies recently. She said “It is an interesting market, but there is less opportunity in Indonesia for the STP, “A-Book” brokers, and more for the “B-Book”, Market-Maker” firms.”

Partnering with exchanges in China?

FinanceFeeds has conducted a vast amount of research in China, and one dynamic that may change the entire framework is that the Chinese government, rather than issuing a regulatory license to FX brokers (which will never happen), may begin ensuring that all FX is conducted via banks.

This way, the government can control the entire system, and have ownership for all accounts, and retail traders will trade with the bank that they have their standard bank accounts with.

We have asked many brokers if they may look at leveraging from this and partnering with Chinese banks. Most say no. Advanced Markets & Fortex have a different view.

Advanced Markets & Fortex Sales HQ, Boston, Massachusetts

 

“We are very well positioned to go that route but, at the moment, we are discussing opportunities with local Chinese exchanges rather than banks. It’s true that the existing exchange platforms may be very old and not at all appealing to the younger trader but, if you are sophisticated enough, then you can partner with the exchanges in order to provide trading facilities while, at the same time, utilizing technology such as ours to give the traders the type of access they desire.”

FinanceFeeds concurs that working directly with exchanges and with government participation would certainly work, and there is a need to change the infrastructure. Banks or exchanges can own the entire entity on their side, and can handle client funds and be supervised by the government.

Talking of banks and client funds……

FinanceFeeds inquired as to how open Advanced Markets relationship with Macquarie Bank is. Ms. Hunik explained “It is good that you brought that up!”

“Many people across all sectors of the business are concerned about security of funds. With Advanced Markets, brokers can open a custodial account at Macquarie Bank in their own name, and their clients’ funds would not be part of a segregated account pool. Client money is held in the name of the actual broker, in individual accounts. It’s worth remembering that, during this year’s SNB volatility, it was the case at many firms that client accounts were negatively impacted by the losses of other traders. This would not have happened if each broker’s funds were held in individual accounts. Our custodial account is very popular not only with brokers but also with fund managers.”

“A broker needs $250,000 to qualify for custodial account in the name of the brokerage” she said.

“Our CEO Anthony Brocco has longstanding relationships with our banks. They know Advanced Markets well and give us their best available pricing because they understand and trust our order flow. Advanced Markets operates an STP-only execution model, has a specific STP license in Australia and has never taken any “B Book-type market risk”.

The REAL reason why CFDs are rocketing in popularity

“You saw what happened in the summer with the CFD arbitrage. You cannot imagine how many people from places like Latvia and Turkey were calling in to brokers asking for CFDs. This sparked real interest. In reality it is hard for brokers in this market to differentiate themselves. Everyone offers FX on MT4, therefore how a broker can stand out becomes a marketing question. If you offer a large number of CFDs will you stand out? No idea. Will they be interested? Yes very likely.” – Natallia Hunik

Anya Aratovskaya, VP Sales Institutional FX at Advanced Markets & Fortex understands that the company has the right structure to set an example.

Richard and Natallia speak to Andrew Saks-McLeod in typical Bostonian surroundings

 

“We want to purify the FX industry” she said. We decided to coin the phrase “purify” as we thought that this particular process deserves attention. It actually only took five minutes or so to think of this idea. Natallia suggested that we needed to come up with a name for the company mission. It was a Friday afternoon, so I said “Purify” is the perfect mission statement! There are a lot of people out there who are jaded from dealing with nontransparent firms, so we wanted to set a standard” said Ms. Aratovskaya.

Richard Perona, Vice President of Institutional Sales stated “In my career to date,  I have worked through some of the worst times in the FX markets. I have a clear understanding of both the institutional side and retail side, and have seen some very different dynamics in both. For example, banks that were run exactly as they should be run, and the complete opposite.”

This company has come as a breath of very fresh air. The technology is great, complimented by full STP order execution that is backed by banks. I do not have to worry about anything. Hopefully the purifying aspect that Anya mentions will be an example set by us, and we are already seeing that brokers come to us for advice.”

I have noticed that when Advanced Markets comes up in a conversation with another supplier or vendor, that they don’t like to have to sell against us. This is the ultimate compliment! – Richard Perona, VP Institutional Sales, Advanced Markets.

Ms. Aratovskaya further added “Occasionally I run into the old clients of the company, and ask for feedback. Hats-off to Anthony because I have never met any corporate client who has complained about his honesty or how the company is run. To build up the reputation of a company and trust in that company – even if someone may not like you as a person – is a true yardstick for the industry. In fact, when we did due diligence as a team to determine which company to collectively join, it was refreshing to find such a reputable, transparent firm in Advanced Markets.”

The hard sell is sooo last year! Editorials, articles and blogs are the way.

Katya Samardina is the company’s marketing guru.

Katya said “We create content to educate the market. This includes blog posts, editorials and articles, on an ongoing basis, in order to organically educate market participants.”

“Sales and marketing is pretty much becoming one entity, which is a dynamic that will continue. We can get granular information, post a blog and then check who reads it, and who fills in the applications. The content is what helps people to come and talk to us. They don’t want sales people to give them the calls and then be persuaded, they want to do their own research.”

“It is important to educate those who work at the brokerages on all levels on which Web Trader to use and other operational matters. We help people to do their research via this type of content. It is not a sales pitch, it is an industry-specific manual” she said.

From a marketing perspective, Katya explained that the company takes on a mission to drive the educational aspect through content marketing. The topics which are compiled come from the questions that customers ask.

Featured Photograph: Richard Perona, Noam Stiekema, Anya Aratovskaya, Katya Samardina, Andrew Saks-McLeod, Natallia Hunik and Yuhan Mo at Advanced Markets in Boston Massachusetts.