The events and volatility of the Blockbuster stock market have aroused the interest of millions around the world and significantly increased the appetite for trading and investing. For online brokers, the explosion of interest is an opportunity to attract a growing number of investors, but it also presents a challenge to differentiate themselves from other brokers in a rapidly evolving market.
There is a growing group of investors who are now more likely to buy and hold in order to reap long-term gains. This growing demand from people who have previously used traditional brokers or funds
Managers are forcing online brokerages to adapt and scale their offerings by joining new asset classes.
The stock market boom has increased the demand for cash products such as cash stocks, ETFs, and bonds. There is now a race among many brokers who have traditionally offered forex and CFDs, to diversify by increasing the range of assets available to clients looking to either tap into the stock market or invest in bonds as interest rates seem to be increasing.
Simplify market access for cash products
Historically, it has been difficult for these players to benefit from rapid market access for cash products. Trading cash products such as stocks is more complex than trading forex or CFDs, which creates new management challenges in having to deal with issues such as client ownership of assets, rights and profits issues – issues that many brokers did not have to deal with before.
Now, advanced infrastructure and technology have made easy access to markets possible – allowing brokers to quickly and easily introduce new functionality and asset classes. Third Party Mediation Experts
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Fingertips and able to handle the intricacies of adding cash products to their offerings, making sure they are equipped to handle everything from corporate actions or taxes since these issues are so critical. As one of the few premium brokers offering a connection to cash products, we’ve seen this trend firsthand with a huge increase in brokers wanting technology, liquidity and knowledge to deliver access to new markets as a result of new customer demand.
Adding new market access is not a blunt tool – rather than having to create an entirely new asset class themselves, connectivity can be quickly added, focusing on market events and liquidity tailored to specific client demand. This is made possible by APIs that allow greater flexibility and for companies to take advantage of promoted market events such as hot new IPOs. Take, for example, Wise’s latest and highly anticipated IPO, which has become the largest ever London tech listing – prior to the offering, many brokers’ clients wanted access to this potentially lucrative opportunity. Brokerages can now deliver customized functionality overnight to quickly meet client demand and give clients access to a float through highly specific market access demand and delivery. This helps them stay ahead of the curve by quickly taking advantage of market events that will capture the market’s imagination to plan their connection, stay agile, and attract demand.
long-term construction
For e-brokers, adding cash products is more than just adding short-term market access to the flavor of the month. Diversification has long-term benefits, such as building brokerage assets under management, allowing them to sell other services and asset classes to new investors and ultimately building long-term relationships with clients.
Peter Plister, Head of FX Prime Brokerage, Saxo Bank