How to launch a White Label broker?
Author: Alexey Kutsenko
Many aspiring brokers are curious about trading platforms – how one configures them, how prospective traders are connected to an online trader’s room, setting up the payment system, and much more.
It is natural that all these questions come up. After all, the trading platform is the heart of the brokerage. However, what if we told you there is an easier and faster way to get to the market as a start-up broker?
It is possible to avoid all the technical headaches by renting part of a server room from a company that offers such services. In other words, you can start a White Label (WL) brokerage quickly and easily. Now, let's get to the main focus of this article.
What is a White Label?
Before diving deeper into launching a White Label (WL), let’s define what it actually means.
A White Label is a company providing their brokerage services via a third party, offering rented technologies, in this case, a rented platform. White Label providers are those who have technology, connections, and platforms – and they can provide these technical bases to other companies who are willing to become a broker.
From the trader’s perspective, there will be no difference and no impact whether they trade with a company that owns the server or is using a White Label provider.
With a White Label, one can avoid the high initial costs associated with purchasing a platform and start a brokerage instantly, paying a monthly fee and a setup fee for installing and configuring their server end. These fees are just a fraction of the cost of an entire platform.
Moreover, if you choose the TFB White Label, you can select one of our multiple trading platforms:
- cTrader
- Match-Trader
- DXTrade
An MT4/MT5 White Label is currently not available, so for MetaTrader 4 and MetaTrader 5, we offer a different kind of package called the TFB Main Label service package. With the new Main Label, clients get much more than with a traditional WL. Not only do we provide an entire infrastructure to kickstart operations, but we also offer guidance and assistance with MQ KYC, a dedicated liquidity bridge with built-in risk management solutions, 24/7 technical consultancy and support, and server hosting and monitoring.
The selection of platforms offers additional flexibility and strengthens risk management. Brokers aren’t dependent on a single platform; they can offer custom services to different client groups.
What are the pros and cons of a White Label?
Several advantages come with becoming a White Label broker.
Key among these advantages are:
- The launch process is expeditious. With a traditional brokerage model, the technical side of launching a brokerage is complex and expensive. With the WL route, however, once your company is registered, and all licenses are in place, the rest is taken care of within a week or two. With TFB, for example, setting up the technical environment is very fast because we already have hosting, data protection, backups, platform setup, LP connecting, quotes, and everything else figured out. We have our own professional technical team that manages the servers 24/7 and ensures their availability and the best performance.
- The entry-barrier cost is low. With a WL model, there is no substantial initial capital investment required. All technology is provided to the WL broker at a fraction of the cost, allowing the broker to invest the capital in promotion and faster growth.
- Flexibility with TFB. As a technology provider, we have in-house tools and instruments that can attract clients immediately and apply a risk management strategy. We also do not provide brokerage services ourselves, so there is no conflict of interest. Moreover, we are not bound by any LP agreements, meaning you can go with any partner you choose.
This is made possible because the company providing you with the WL takes care of renting the servers, trade dealing specifics, and configuration of the trading platform. While this might sound like a dream, it has downsides too:
- The more clients WL companies get, the higher the monthly fees will become. Sooner or later, every business reaches a breaking point where they pay just as much, if not more, for the rented infrastructure.
- Servers typically host data from multiple companies. While they might be perfectly fine in terms of security and privacy, there are underlying potential issues with such a situation. For example, if someone runs an update for their software on the shared server, and it affects everyone else's performance.
At some point, your company outgrows the standard setup and demands an individual solution. This might include plugins, add-ons, or simply a custom server configuration. With several businesses on a single server, there will be an increased difficulty in running individual upgrades. There is also a risk that your processes will be affected by a poorly executed upgrade of your neighbours.
So, when you reach a certain growth level, it might make sense to invest in a Main Label license. You will have to pay more upfront, but in return, you will receive full support along the way. More importantly, you’ll have your own secure environment that the TFB team will take care of.
Would you like to start a White Label brokerage?
TFB offers a White Label package containing a complete set of solutions required to kick-start your brokerage. All our products are developed internally and are fully compatible with one another. The TFB ecosystem includes powerful bridging solution, built-in risk management tools, and TFB plugins that target specific needs.
For more information, please visit our company’s blog or email us at sales@t4b.com.
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