How Forex Affiliate Programs Work?
Forex or foreign exchange became popular among retail traders once the Internet conquered the world. Online trading changed the brokerage industry forever, and it brought advantages to both sides involved in trading – the brokerage house and the trader.
On the one hand, technological advances allowed brokers to offer more competitive trading conditions. From execution to support, technology means better services to the trading community. On the other hand, traders in search of an FX broker should look for more than that. Nowadays, a true brokerage house is a trader’s partner – it represents its interests in the market.
Moreover, the broker is the intermediate, or the middleman, to the market. As a trader, you want to have the best execution possible and a partner to trust.
Stiff competition among brokers led to innovative solutions to find and attract customers. A true brokerage house aims not only at finding new customers but also at retaining the ones it has. Both are crucially important – as is a Forex affiliate program that rewards its scouters.
What is a Forex Affiliate Program?
This is nothing but third-party affiliate marketing where a trader or just a regular person refers to other traders to use the services of a specific brokerage house. In doing so, the person that does the introduction receives a reward from the broker.
The reward may take various forms. It may be a cash reward per new signed-up trader. Or a percentage of the volume made by the new trader, or even combinations of the two as well as many other options. The aim is to convert as many traders as possible to the broker.
What is in for the broker? Well, the Forex broker running a good Forex affiliate program benefits from finding new clients. At the same time, it can focus on retaining the current ones. Thus, rewarding the introducer is in the best interest of both the broker and the introducer.
How Does It Work?
No two Forex programs are alike, but most of them share some common traits. While many types of affiliate programs exist, some of them are more common than others.
Types of Forex Affiliate Programs
Before anything, a Forex affiliation should be viewed a partnering with a broker. Therefore, the persons interesting in such programs should think twice before picking it. Reputation, regulation, and trust among traders are things to consider.
Basically, three types of Forex affiliate programs predominate:
On top of those, Forex regional representative programs come to complement the offer of many brokerage houses nowadays.
Forex Affiliate
The most common way to participate in a Forex affiliate program is to become a Forex affiliate. This typically suits traders with a big following on social media.
For instance, if you run a successful Twitter account related to trading and have a large following base, this is one way to monetize it. By registering with the broker, you will receive a unique link, and every trader that registers via your link is counted.
Naturally, the broker rewards every successful registration and active trader that comes from such a program. Also, Twitter is just an example. Social media nowadays means much more – Facebook, Instagram, Telegram, and so on.
Moreover, people running successful websites or blogs related to trading may find such a program useful. By using banners and directed email marketing campaigns, they can monetize the website’s traffic and customer’s database.
Forex Introducing Broker
Another form of Forex affiliation is to become a Forex introducing broker or IB. In large parts, this type of Forex affiliate program resembles the previous one. However, conditions are better because the broker accepts only certain introducers under such a program.
For instance, a Forex-related website or even a Forex forum with increased traffic would qualify for this category. Also important, the broker offers better deals depending on the number of potential clients directed. Account types also have a saying in the way the introducing broker is remunerated.
All in all, an IB program is a step further in the Forex affiliate programs. If the first category usually refers to one person, here we may even have institutions.
White Label Partnership
White label partnerships go even further. Instead of introducing traders to the broker, why not building your own business under your own brand and partner with a trusted brokerage house for licensing the technology?
White label partnership increased in popularity in the last years, and many traders using the services of such a broker do not know the difference. After all, the services are the same, the execution is the same, and the brokerage house behind the white label partnership always stands ready to provide support.
A white label partnership essentially means licensing the trading platform, but also everything that comes with running a successful trading business. For instance, such solutions come with the original liquidity pool from the broker – the more liquidity providers, the better.
Naturally, this is not a solution for everyone. It needs substantial investment and credibility. As such, it addressed banks and other financial institutions, legal persons, but also other Forex brokers that want to change the way they are doing business (e.g., switching from market-making to ECN trading).
Forex Regional Representative
This level of Forex affiliation also goes beyond a simple Forex introducing program. Like the name suggests, a Forex regional representative is an entity responsible for a certain region. In other words, a person or, more likely, a company, with some experience in the Forex industry.
A potential Forex regional representative already has plenty of active traders under the umbrella. In many cases, the representation comes with exclusive rights, as well as deals. As such, for the representative, it is more profitable to become a unique partner with the brokerage house.
On its side, the broker typically offers years of experience, transparent customer service or individual support, among other things.
How to Choose a Forex Affiliate Program
This is the most important part for the potential affiliate. In some cases, the nature of the business dictates the type of the affiliation suitable. For instance, running a huge, successful trading educational website means you are suitable for at least an IB.
However, what matters the most, like in any business, is the bottom line. More precisely, the commissioning – how competitive is it?
Moreover, the broker’s prestige, reputation, and experience. If you want to associate yourself with a brokerage house, you might want to make sure you pick the right one to recommend your traders.
Furthermore, consider the broker’s offering. If the brokerage house offers the latest technology or not, the right type of the trading accounts (e.g. ECN), if it has a worldwide presence or not, and so on.
Every little detail matters. The more reliable the broker, the easier to make the affiliate decision.
Conclusion
To sum up, Forex affiliate programs are serious businesses. In the hands of the right influencers, introducers, trading-related website owner, etc., they can easily become a reliable income source.
Image source: https://unsplash.com