Ideas of financial business in the UK

Article by: http://topbrokers.com

The financial sector in the world comprises a major sector of the entire globe’s economy. According to the Organization for Economic Co-operation and Development (OECD), the financial sector provides about 20% of the GDP in developed countries. When you think of this sector, you probably imagine big banks and the stock market, but it is quite a large industry.

Start your own Forex brokerage

Despite seeming like an ambitious idea, it is, in fact, not that difficult to start your own Forex brokerage. There are just a few hoops you will have to jump before you’re ready to sign up clients and start operating as a Forex broker.

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Acquire a license from the FCA

The Financial Conduct Authority (FCA) is responsible for regulating Forex brokers based in the UK. For you to start your own Forex brokerage, you will need to attain a license from this institution before you can start operating in the region. For the license, you will have to achieve the requirements in terms of:

  • Capital requirements – you will need to have a certain amount of capital that will grant you access to the interbank market
  • Infrastructure – the FCA will also require that you have the necessary infrastructure in terms of computing power to ensure you can handle trade volume while maintaining security
  • Workforce – it is not possible to run a Forex brokerage on your own, and you will have to show that you have the necessary workforce to sustain all of your operations

Find a liquidity provider

In order to facilitate trades, you will need to find a partner who will be willing to take the opposite side of trades. For example, when one of your clients places a buy order on the EUR/USD, there has to be someone to sell it. In short, your clients can’t buy an asset that someone else isn’t willing to sell.

Such a partner is referred to as the liquidity provider, and they are usually a bank, which is also where your client funds will be saved – you can’t keep these deposits in your own bank account. The terms you set with your liquidity provider should be up to you, but they will determine how you structure the fees charged to your clients and, subsequently, your own profits.

Market yourself

Once you’re ready to start, you just have to advertise your services so that you can start accepting clients. The internet is the easiest way to do so since advertisements are much cheaper compared to television. Plus, being an online business, you get to reach your target customers more effectively.

You can get more information about Forex brokerage companies from the forex brokers information site http://topbrokers.com

Work for an investment company or an exchange

Obviously, starting your own Forex brokerage requires that you have a substantial amount of capital, and the only way to get it is through saving. Working at an investment company is usually the easiest way, especially if you have the necessary qualifications.

According to the Bureau of Labour Statistics, the job outlook for a financial analyst is at 12% for the years between 2014 and 2024, which is higher than the average. As such, you can easily get a job at a hedge fund, mutual fund or even at an investment bank. As for the pay, you only have to look at the lifestyle some of these traders live to know that the pay is great.

Besides the earnings, working as an analyst for an investment company has the benefit of giving you important lessons. As part of the company, you will become a better trader yourself by learning from the best, while also learning how such institutions are run.

If you don’t have a Bachelor’s degree in a finance-related course, you can always join an exchange as a floor broker. These are the people you see on TV shouting at each other on TV in major exchanges like the NYSE. To become a floor broker, you don’t need education qualifications, just the trading skills. If you can convince people that you are good at it, you become a broker for banks and other investment firms.

You can work on the London Stock Exchange (LSE) if you prefer stocks and also the Intercontinental Exchange (ICE) and London Metals Exchange (LME) if you prefer commodities. There are also other exchanges you can join, and they only require an annual fee for signing up.

Retail trader

Fortunately, the financial sector is also moving online, allowing more people to participate in the stock and Forex market. There are tens of Forex brokers around the world that accept clients from the UK, and you can sign up with any of them. Some of these will also offer stocks and futures through CFDs, and you can get access to various markets.

If you want to participate in the stock market, Fintech companies like Robinhood have developed apps that let you trade stocks for free. There are other such companies, even some that do the trading for you like Betterment using computer algorithms.

In short, there are plenty of options for you if you want to engage in the financial business in the UK, and you might actually find yourself spoilt for choice the more you keep looking.