How to start a brokerage firm?

Nov 11, 2017
7
0
11
#1
Hi,

This might sound a bit dumb but how does one start a brokerage firm? Remember I have no experience at all and would appreciate all your inputs. Here are my assumptions.

- I will need to register a limited company
- I will need to run my accounts and tax etc.
- I will need certain exams or certificates
- Looking at advisory, execution only and discretionary services
- Probably stock broker maybe CFDs
- I will need some sales force to call on potential clients
- Client opens an account and credits his account with money
- I will need access to a trading platform like IG or CMC to make trade on behalf of the client
- I will need some web based client area to keep track on clients' account and keep them informed

Have a missed anything? Remember I'm now looking into general info and not exactly what certification do I need.

Any feedback would be highly appreciated.

Cheers
 

Nowler

Active member
Sep 13, 2017
757
51
38
#2
Hi,

This might sound a bit dumb but how does one start a brokerage firm? Remember I have no experience at all and would appreciate all your inputs. Here are my assumptions.

- I will need to register a limited company
- I will need to run my accounts and tax etc.
- I will need certain exams or certificates
- Looking at advisory, execution only and discretionary services
- Probably stock broker maybe CFDs
- I will need some sales force to call on potential clients
- Client opens an account and credits his account with money
- I will need access to a trading platform like IG or CMC to make trade on behalf of the client
- I will need some web based client area to keep track on clients' account and keep them informed

Have a missed anything? Remember I'm now looking into general info and not exactly what certification do I need.

Any feedback would be highly appreciated.

Cheers
What about money?
Surely you'll need quite a substantial amount of money yourself...
 
Nov 11, 2017
7
0
11
#3
What about money?
Surely you'll need quite a substantial amount of money yourself...
Right I will need money. Read somewhere around 100k?

Also a proper website.

One thing I am trying to get my head around. In terms advisory, execution only and discretionary services, the client always deals with the broker, they never have access to the trading platform to execute the trades by themselves...correct? In other words, the brokerage acts on their behalf.

Also what CRM is recommended, or is it good enough to keep the records in a spreadsheet?
 

Nowler

Active member
Sep 13, 2017
757
51
38
#4
Right I will need money. Read somewhere around 100k?

Also a proper website.

One thing I am trying to get my head around. In terms advisory, execution only and discretionary services, the client always deals with the broker, they never have access to the trading platform to execute the trades by themselves...correct? In other words, the brokerage acts on their behalf.

Also what CRM is recommended, or is it good enough to keep the records in a spreadsheet?
I wouldn't know any of this. I just noticed you never mentioned capital needed, which obviously would be a deal breaker if you didn't have it. You could look up the rules as per the regulator in your country..?
 

FXX

Well-known member
Oct 12, 2017
1,102
175
73
#5
You'll need millions. The fca license alone can cost up to 250k and you will need to have a lot of infrastructure in place and processes before you can even apply. Building a website and platform will cost up to a million if not more. The IT equipment and staff are also going to cost you. It's a pipe dream unless you have millions under your bed.
 
Nov 11, 2017
7
0
11
#6
You'll need millions. The fca license alone can cost up to 250k and you will need to have a lot of infrastructure in place and processes before you can even apply. Building a website and platform will cost up to a million if not more. The IT equipment and staff are also going to cost you. It's a pipe dream unless you have millions under your bed.
Well thanks that's good to know.

In terms of the IT equipment, what do you need? I assumed, you can start off say with advisory CFDs, therefor you would buy a trading platform access with IG for instance and use spreadsheets and email to keep clients updated. Or is there any software like CRM recommended to manage clients?

Thanks
 

tomorton

Well-known member
Feb 28, 2002
6,995
897
173
62
Exeter
#7
If you're completely new to brokerage approach the firms who offer this as a franchise opportunity. Even if you don't go with one of them, you will pick up a whole lot of valuable business information for free.

See The Franchise Show, ExCel, in February.

Also, ask a bank to lend you the start-up money, even if you don't need it. If they wouldn't lend you the money, you're not ready. But their business advisors might be able to point you in the right direction