Holding the ASIC license, among others, and celebrating 15 years of successful operation worldwide, OneRoyal provides services to retail and institutional traders.
Jacob Nel, the CEO of OnePrime by OneRoyal, the Sydney-based and ASIC-regulated institutional arm of OneRoyal, talks about the Companys product for new and established brokers, the vision of the Group, and how the industry is evolving these days.
What propelled OneRoyal to establish OnePrime, and what has been your role with the Company？
I've been in the Foreign Exchange industry since the mid-2000s, and I've held roles from the Sales department all the way through to CEO. I've been involved with OneRoyal since 2015, where I worked for the company for some time and then came back at the beginning of 2021, just in time for OnePrime to be established.
We started strategizing on how we leverage the experience and reputation that OneRoyal has, into the institutional side of the market. Having decades and decades of combined experience in the industry, the leadership saw the gap in services and support provided to startup brokers and a lot of institutional partners. That's how OnePrime was born – with the mission to provide service as a prime broker, and as a liquidity provider to give the existing and startup brokerages and also the bigger wholesale partners the proper footing and trading conditions to come into the market.
What‘s your vision regarding OnePrime？
OneRoyal has been around for quite a while, and that's where the prestige of the company comes from – it’s rather rare in the industry to be 15 years old and going strong. The vision for OnePrime is to be a brand on its own with the backing of OneRoyal, starting with the first step which is to consolidate all of our liquidity into one hub and use the prestige of the AFSL here in Australia to gain the confidence in the market.
That will accomplish a lot. If it comes through one entity, it gives us a much better scope into the market conditions and costs. The reality is that when you start out as a broker you might not get the best deals and the best pricing because you're very new, and that's where OnePrime will be able to help.
The aim is to be flexible enough to accommodate start-ups and give them the edge in the market they need to build their business, but also to evolve our existing clients that are ready to grow into their next business cycle, for example, institutional partners, existing brokers and funds that have grown large enough to offer their clients unique pricing through APIs or even White Labels.
So overall, the vision for OnePrime is to consolidate all our liquidity deals and be able to give our institutional client the existing brokers or startup brokers a much more solid product and a good package from the get-go so they can become profitable from early on.
There are several institutional providers of CFD services. What sets OnePrime apart？
The entry level into the institutional market can be a daunting task for a start-up and sometimes the entry levels are so high that start-ups and even smaller brokers are not always able to get the best liquidity conditions with adequate depth and risk management to gain an advantage to grow their business.
By consolidating our price feeds into one entity, which will be under ASIC in Australia, we enhance our product, especially for the existing brokers, institutional partners and the start-up brokers. This is what sets us apart from all the other providers out there since what many other providers are doing is selling off-the-shelf products. For example, many liquidity providers and prime brokers are focusing on established brokers and they're selling a product suitable for them but not for start-ups.
This is where we come in, with the products tailored specifically for existing and starter brokers, bringing those people closer into the real market conditions where they can accelerate their growth much quicker. So, this is where we wanted to gain the advantage – by giving start-ups or existing brokers, funds and institutional partners the opportunity to enjoy the same pricing and products that are offered by prime brokers, so that the smaller to medium size players in the market can be competitive.
Last but not least, we can provide more than infrastructure, liquidity, or white labels. Weve been in the industry long enough to have seen its ups and downs, and had made enough mistakes and learned from them. So, we are able to consult new brokerages, guide them and hold their hand so they avoid common mistakes.
What are the typical mistakes of new brokerages and/or institutional partners looking to set up their own company？
One of the biggest hurdles that I have encountered in the start-up stage of a brokerage is proper planning and forecasting. Running a brokerage is pricier than many expect. As a result, many run through their budget almost immediately. They either don't have a large enough budget, or they don't understand how actually expensive it is to get everything up and running without the proper guidance. I have seen so many start-ups fail due to a lack of budget or proper guidance on what it really takes to run a successful brokerage.
This is where I feel we, as OnePrime, have the experience and the knowledge to provide that white-glove treatment to existing brokers and start-ups, and give them the proper guidance so that we help them achieve their profitability and bottom line much quicker.
In a way this mistake is common to many new businesses who lack the industry understanding and, hence, long-term vision, dont you think？
Yes, and speaking of the vision on a more philosophical level, if you want to start your brokerage or run your existing brokerage into a bright and consistent future, you need to find your “why”. Why do you want to do it？ Is it just for the money？ Are you doing it for a legacy？ Are you ready to invest your time and resources？
We see many institutional partners thinking of becoming brokers themselves and providing liquidity to their clients. One common mistake that partners have is the perception that becoming a broker is easy because they already have clients. But to go and set up the infrastructure is very difficult and costly, so they end up running through their budget very quickly, and then, they either blow up or they try and depend on the bigger broker that they're feeding from anyway. Thats one mistake that we want to try and avoid with OnePrime. We take care of the basics so they can focus on what they do best – attracting and serving new clients.
What would you say are the top three elements of a successful brokerage？
I would first say infrastructure; you definitely need a healthy investment into a solid infrastructure. Marketing and promotions are also very important. There are so many great potential companies but they're not “out there yet” and we don't know about them, so a good promotion strategy is crucial. And thirdly, I would say good management and company culture that cares about their team and inspires, respects, motivates, and also helps people on the team grow, and gives them the right guidance and incentives.
How can one start their brokerage with OnePrime？
Every relationship is different, budgets and requirements are different, partner‘s ideas are different, and what each client wants to do and where they want to go are different. So, for any given client who wants to enhance their own brokerage or create their own new brokerage, there is flexibility to customize the deals according to what they want and what they can. The first step is reaching out and starting the conversation, and we’ll define the next moves.
Where do your clients come from？ Which countries/jurisdictions do you focus on？
With the current regulation changes around the world, I would say that Southeast Asia, South America, and Africa are probably among the hot topics now and where a lot of trading is happening. Africa, now, is not just trading but also started enhancing their global partnership programs, and they are moving into that realm where they want to be brokers or white labels. Although the interest is everywhere around the world, if we want to emphasize specific geographic areas, then its definitely Southeast Asia, South America and Africa for the next two years, in addition to our exposure and healthy institutional clientele base in the MENA region.
As an ASIC-regulated company, please share your take on the industry in Australia. How did the change in regulation impact the industry？
The change of regulation obviously impacted the industry with a lot of players leaving the country and moving their operations offshore. But on the flip side, this change boosted the professional standards of the industry in Australia, with only serious, professional, and compliant players staying. With the new regulation, clients are better protected, and higher standards have been set in the industry. Such changes in the regulatory environment have encouraged OneRoyal to use its Tier 1 license for its institutional products under a reputable regulatory body.
OneRoyal has been around for over 15 years, and you have been with the group for a long time. What, in your opinion, are the most valuable lessons you can share with newly established brokers？
First, identify your target audience and manage your risk properly, and for the first year manage your expectations and your budget very closely. Don't overspend, don't reach for the stars immediately, build your foundation strong, and have a solid infrastructure and marketing in place that will allow for your future growth.
In addition, form your relationships not only for monetary gain and do not just go for the cheapest deal out there; instead, really get to know your partners and aim to learn from them and grow with them. Thats where I believe OnePrime can really deliver an outstanding product to this niche.
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