World First: We look at how Tradesocio will enable brokers to target 95% of untapped clients with CEO Rohan Hall
Tradesocio speaks to FinanceFeeds in detail about how the new platform will allow brokers to enter a massive and untapped market for new and higher value clients. We also speak to him about his 30 year background in corporate technology with blue chip firms, and why moving away from the status-quo is vital in today’s FX industry
What if an FX technology vendor could provide a brokerage with a solution that would not only maximize the full functionality of MetaTrader 4, and at the same time expose FX brokerages in any region to a massive and untouched base of retail investors that would be a potentially ideal fit for brokerages.
At this juncture, it is important to note the word ‘investor’ rather than ‘trader’.
Since the rise to prominence of retail FX at the end of last decade and the all-encompassing global dominance of MetaTrader 4, over 1200 retail FX brokerages using the MetaTrader 4 platform are currently in operation globally, many of which are expending tremendous resources attempting to tap into the very same client bases as each other.
This has created a ferocious and competitive market in which the acquisition of a single new client is costing over $1,200 and the lifetime value is just six months, however far from being a saturated market, many of these companies are targeting traders and are eschewing a massive market of investors – ie those who want to use an electronic platform to invest in FX, and not to trade their own portfolios.
Today, FinanceFeeds spoke in detail with Tradesocio CEO Rohan Hall on the launch of the company’s new product which enables exactly that.
Mr. Hall, who was born in Montego Bay, Jamaica and grew up in Miami, Florida, subsequently embarking on a 30 year career in the technology industry within major blue chip American multinationals founded Tradesocio company whilst living in Spain, but the company, from its outset, was established in the heartlands of the retail FX industry: Limassol, Cyprus.
“I have been in technology for over 30 years, having created some interesting things during that time” Mr. Hall reflected on his career thus far.
“Most of these have been large scale projecs, including having helped launched the first SAP installation at HP in Colorado, as well as the implementation of ERP technologies at Corning” he said.
Mr. Hall explained “Corning conducted a roll out of PeopleSoft which was bought by Oracle. This was one of the largest global rollouts PeopleSoft ever did whilst owned by Oracle and Corning was the client at the time for which I was instrumental within the team that conducted the global rollout.”
“Following that, I then did same thing for Honda in California, so in essence I have been involved in technology for many years and witnessed the patterns of each time period first hand”
“Whilst spending a number of years on ERP on projects with PwC, Deloitte, Accenture and PeopleSoft, I started creating social technologies” explained Mr. Hall.
“I started to look around at different veritcal markets so this is how I ended up in FX. After operating in general markets for years, I wanted to see what was going on in other verticals so that’s how I stumbled upon FX a few years ago” – Rohan Hall, CEO, Tradesocio
Highlighting the difficulties that newcomers to FX trading have to navigate, even if their technological prowess and understanding is vast, Mr. Hall explained that he, even as a very astute technologist, found beginning a foray into retail FX trading to be complex.
“I tried to figure out how to use FX trading platforms, and it was mindblowingly complicated and very discouraging” he explained.
“You have to download things and learn all the terminology. It was high risk, and I thought that there must be a better way.”
“At that point, we started working on the first evolution and the whole ideology behind our development that we are now launching is centered on the idea that the entire FX market should be easier and it should be social. Anyone should be able to trade, wthout having to spend weeks and months being bamboozled by all this technical stuff and we didn’t see any product available at the time” – Rohan Hall, CEO, Tradesocio
In terms of development stages, Mr. Hall explained the initial stages of the foundation of the new platform. “We developed the first version which was like a copy trading concept, we gave it a try, came across something after that which was more evolved and had better functionality.”
“We started looking at the risk tied to copy trading and the compliance issues that brokers had tring to roll this out so we thought what can we do? Our end clients are brokers so we started iscussions and collabroations about that and ended up with something new and innovative in the market and this is the very first thing about this priduct” – Rohan Hall, CEO, Tradesocio
Enthusiastically, Mr. Hall explained “We are utilizing more MetaTrader 4 features than most!”
Do people really want to trade or do they want to invest?
Describing the difference between the current market of traders and the untapped market of investors, especially with regard to the lack of accessible services on the electronic trading market for retail investors, Mr. Hall said “If you’re a wealthy person you can go to a wealth manager or hedge fund, say here’s my money, give me some returns on it and I can go away and have done with it but in the retail sector that doesnt really exist that much.”
“We took this into account and thought to extend this and make an alternative investment platform. High net worth individuals can go to a fund manager who has a range of funds and vast market experience and there is a very low chance that the investor will lose money, but if you are a guy on the street you have no chance of being able to do that” he said.
Platform for retail investors rather than traders
“We have created a plaform which means that investors can do this fo themselves without the necessary $50,000 that a fund manager would ask for” explained Mr. Hall.
“An investor is my mom, dad, sister, even the lady who works in the local shop. They won”t have $50,000 but they may have $2,000 to invest, therefore by having an investment platform of this nature, their needs are catered for.”
“We looked at the Millennials also. Many people of the younger generation have some money but they don’t want to take trading classes or spend endless hours mastering the full functionality of a retail trading environment, therefore this is an interesting market” explained Mr. Hall.
“If you look at the Millennials, they don’t have options, they don’t want to learn all this trading jargon or master the platforms. All the money that is coming from the baby boomers is coming down to them, and they want everything now, all the performance analytics on their fingertips now, not month-old figures, so we started a few months ago to the development process and we are at the stage of releasing that platform” – Rohan Hall, CEO, Tradesocio.
Retail FX brokers will be able to tap this market in just a few weeks’ time.
“We are now working on getting this out of the door over the next couple of weeks and currently there is not another platform that we are aware of that is a retail focused alternative investment platform which has been designed to be white labeled by our broker clients” stated Mr. Hall.
“We want brokers to be able to go to their own userbase with this and explain to their clients that they don’t have to go to those training courses, instead being able to have access via this really easy to use social platform and find fund managers that have all their performance analysis over the time period that they ve been trading displayed. All the investors have to do is to find the fund maanger whose numbers they like and this way brokers can help them go ahead and ivnet that money on behalf of retail clients” he said.
Plug and play
Mr. Hall explained the straight forward nature of integrating and setting up the platform. “It is a completely plug and play product” he said. “We develop, host and support it. Think of two sides: Investors can sign up from the front end and can see brokers and fund managers, they can go ahead and open an account directly from the platform, or they can do so via their broker.”
“We offer features to facilitate and make it easy to upload compliance documents. My background is in ERP, and indeed we offer full ERP solution. Whether this is in the form of a CRM or compliance management or reporting, the full flow and gambit of what to do including marketing is integral to the product” said Mr. Hall
Taking the onus off the broker
Mr. Hall demonstrated how the new platform makes sure that brokers do not need to go to great lengths operationally once it is onboarded. “Because we capture lots of data we have marketing and BI built in, which minimizes the effort required by brokers” he said.
The ease of operation should work on both sides – client and broker, according to Mr. Hall.
Rohan Hall moves to Cyprus.
Recently, in order to be close to this project and lead its delivery and evolution, Mr. Hall, an American citizen, moved to Cyprus. “We have been building a sales and marketing team, which is exciting, and my move to Cyprus puts me in the center of the universe for FX” he said.
“We have lots of relationships in Cyprus and are looking forward to continuing to build our existing strong relationships here. We have been focused heavily on technology and I have been leading that charge. Now we have got to the point that we are ready to put that out to market, my focus is on business development and that is to be centered here in Cyprus” – Rohan Hall, CEO, Tradesocio
“Born in Jamaica, I grew up in Miami, and have also lived in California” he said. “I consider myself to be an American businessman and a Jamaican social guy! People in Jamaica know how to relax and enjoy life. I am a capitalist, I was raised in the US and have worked in large multinational technology companies but I believe you should enjoy life as well” he said.
A practical example of how this new prouct is very relevant to a large audience is in an explaination that Mr. Hall gave which is close to him. “My mom is retired, has saved her money, and has some mutual funds. The question is would you say hey mom go and trade forex? No. However if you say here is a licensed fund manager, the same type which wealthy investors give their money to, the likelihood is, she will invest” he said.
FX firms are only going after 5% of the addressable market!
Mr. Hall is of the view that investors make up the vast majority of the market that brokers could target. These are retail investors who do not know anything about trading but want to invest money.
Instead of trying to spend $1000 on attempting to bring on board an experienced trader, and compete with everyone else, its worth going after investors, according to Mr. Hall.
“We are there completely focusing on the retail investment market. This works out really well for fund managers that are trying to get retail clients to increase their assets under management, and also gives access for fund managers to connect to retail clients via our platforms or through broker clients. Can go via the fund management network or via the brokers who can offer fund management solutions too” – Rohan Hall, CEO, Tradesocio
“We are offering a whole new market for brokers that they don’t have access to and a new market for fund managers who dont have acces to a retail market” he explained.
“I see the industry in its current form as a small lake with everyone trying to catch the same fish that are wise to the difficulties of navigating certain aspects of the whole ecosystem and run away,compared to going to a new lake which is large and untappaed where the fish are much bigger” he said.
Another factor to consider is that investors will usually deposit more than traders. Even if it is just $5000 more, that is a large increase over the average amount of $3800 per retail trader.
“We believe that many investors are looking for licensed fund managers who have a proven history. We are taking that market and giving brokers something totally new which they dont have access to. If you ask a broker what they have have to offer a millennial, the answer is probably not much! With this you have something ideal to offer to clients and make the brokers business run smoother at the same time” said Mr. Hall.
In conclusion, Mr. Hall said “All the major management consultancies are looking at wealth management, and this is what we are putting into the FX world.”