Since the goalposts moved in Jan 2018 restricting leverage and new account incentives for retail traders, brokers have been trying harder to compete with the majors and stand out from the crowd.
It’s difficult for brokers to compete on price, because spreads are about as tight as they can get. Brokers can’t even provide analysis that is remotely helpful these days. Because it could be considered “implied advice” and therefore against the rules of being an execution only provider.
Customer service is a tricky one too. As it’s generally only relevant when things go wrong. For the majority of the time, 90% of traders don’t want to talk to a broker, they are quite happy tapping away at the markets online. When there is a problem, it’s how client services handle the issue that defines a broker’s customer service. Of course, all brokers want to provide excellent customer service, because if they didn’t they’d lose a customer, and nobody wants that…
So what’s left to compete on?
Transparency, is one of the few key features of a trading account that’s open for improvement. Especially in Forex trading, where in some regions, it’s still a bit Wild Westy…
That’s why TigerWit is using blockchain for account audits to make trading more transparent.
Here we hear from Tim Hughes, the UK CEO of TigerWit about what makes them standout and why you should trade with them…
First off, what is TigerWit and how is it different from the existing CFD platforms?
TigerWit is about bringing fresh technological solutions to the trading space. We’re looking to evolve the trading experience, keeping what works well and improving what doesn’t. Like any established industry, a lot of common practices happen because that’s how things have always been done, not because it’s the best way of doing things now.
There’s always been a lot of concern, a lot of inherent mistrust in this industry between clients and their brokers. We recognise this concern and are harnessing the power of blockchain technology to address it.
Specifically, right now we record all trades done with us on blockchain, which we give clients access to through our app, so that they can interrogate their trades and see the unique hash value attached to those trades.
On the UX end, we’ve focused on making our mobile interfaces a pleasure to use – intuitive and straight-forward. You can see this with our “mode” feature which allows users to choose if they want a light, dark or coloured interface.
TigerWit focuses on what really matters to clients. Access to the right markets at the right time, on a trustworthy platform designed to make their experience simple and enjoyable. Most clients don’t trade thousands of markets and tend to focus on the majors, and that’s what we provide – fewer markets, more simply described. For example, we’ve given give XAUUSD a more accessible name: GOLD.
How important is utilising Blockchain for your clients? As in what significant difference does it make compared to traditional accounts?
Blockchain is important to TigerWit for two reasons. Firstly, its application. Creating an immutable record of all transactions removes once and for all any concern that the broker is doing anything they shouldn’t. We think this will become the norm.
Secondly, it provides the perfect opportunity for us to harness new technology and bring a meaningful benefit to the industry. This is exactly what we’re setting out to do.
There are many different CFD platforms operating globally at the moment. Do you think the industry is going to be consolidate at some point and do you think that will be good or bad for traders?
This has been discussed for the last 15 years without any meaningful consolidation actually taking place.
The major reason for this is that most clients have multiple accounts, and this overlapping client base means the economics of any merger don’t work. The data shows that every CFD account holder has something like 2.3 accounts on average. Therefore every broker’s client base is shared and overlapping, to some extent, with everyone else’s.
You can’t value your own company as if it’s unique, because another firm, who might have half your clients anyway, will never put the same value on it; which is why firms rarely take other ones over: the economics of it don’t work.
But whilst this fragmentation makes major consolidation less likely, it also makes for competition which is generally in traders’ interests.
How important is being based in the UK to your global brand? Or doesn’t it matter?
For us, being headquartered in the UK and holding full scope permissions from the FCA is very important. The UK has always been a major market and leader in CFD trading, and the message that a UK HQ with FCA authorisation sends to prospective clients globally is one of confidence. It is our view that this cornerstone is the right base from which to build the global business.
Even considering where we are right now with Brexit and where we may be in six months’ time, we are committed to our London operation.
And finally, for people in general, and your customers that want to make the most of their money, what would be your top resources, be it a book, a website or a service, that you think can help people make smarter decisions when it comes to saving and investing their money?
Dabbl is a great app which I quite like because it allows you to quickly find the shares of the brands you use and might want to invest in. It has a “look up” function where, if you point your phone at a bottle of Heineken for example, it will quickly find you the Heineken shares so you can buy them. It’s the social aspect of trading which I like. It’s a good product.
Outside of all the obvious financial news outlets, a resource I’ve grown quite impressed with is Udemy.com. It’s an online learning platform that allows you to select and complete courses at your own pace, depending on your interest, ranging from investment strategy, risk management, forex trading, and even basic financial literacy courses.
Third of all…shameless plugging, I know, but our TimeToTrade platform, which is an easy to use trading and investment platform that enables clients with no programming skills to create bespoke trading algo strategies, back-test, and set to automate. This is possible on other platforms but requires considerable programming skill and is a real pain to do.
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Richard founded the Good Broker Guide (now Good Money Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.