Sydney: Date June 2016: Warning signs are starting to show in the CFD & Forex industry with Binary options rising in popularity, but what are the opportunities ahead for this fast paced industry?
Higher acquisition costs, zero pip spreads and bonus incentives for the top sales people being reduced, are all starting to weigh heavily on the CFD & FX industry. Couple that with a 47% decrease in average volatility over the last 12 months on the world’s most heavily traded FX pair, EURUSD, and you can see why companies are looking to alternatives to keep their revenues flowing.
“The average cost to acquire a live trading FX or CFD trader has definitely increased over the last 2-3 years, thanks to increased competition and in many respects, the maturity of the existing market, especially in Australia, the UK and Germany,” said Ashley Jessen, CEO and Co-Founder at Profile Booster.
Profile Booster recently created a video titled ‘The truth about the FX and CFD industry – What are the Threats and Opportunities Ahead’, outlining the exciting opportunities opening up in this space.
Pressure can also be felt from a once rich area of acquiring new clients, which is via Introducing Brokers (IBs) and affiliates. Previously, IBs were a major way for brokers to leverage the database of other companies, who may be trading educators or stock broking firms.
Now, the pressure on FX companies is on low spreads, with many leading FX companies offering zero pip spreads on the major currency pairs. As a natural progression, brokers aren’t able to offer as big an incentive to their IBs and affiliates, which means the number of new accounts from these areas has been dwindling.
Client retention is now the major focus for the dominant players as they already have a leading market share and so they are looking to the new breed of Fintech companies who can add more value to their existing client base.
One that has recently caught the attention of serious CFD & FX traders is Psyquation, whose service is aimed at making traders more efficient by reducing the number of silly errors they make, plus a range of behavioural alerts. Their goal is to make the brokers’ clients more successful traders over time.
The opportunities going forward are truly exciting. Fintech startups are seriously challenging the way the older style of companies are doing things. Watch this space.
About Profile Booster
Profile Booster specialises in creating and promoting authority content in the financial services and professional sector.
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