Forex brokers actively looking to poach FXCM clients, IBs and Affiliates – LeapRate Exclusive

LeapRate Exclusive… It isn’t often that a large block of active retail forex traders (or IBs) come up for grabs. So when it happens, it shouldn’t really come as a surprise that rival retail forex brokers do all they can to get a piece of that action.

This is, after all, an industry more dependent than most on constant new client flow.

LeapRate has learned that a number of leading forex brokers have been actively taking steps to entice clients of embattled FXCM Inc (NASDAQ:FXCM) to switch. The moves come after last week’s drama which saw FXCM and its CEO Drew Niv banned from the US forex market, and the subsequent sale of FXCM’s US clients to rival Gain Capital Holdings Inc (NYSE:GCAP).

The moves we are referring to aren’t really aimed at FXCM’s US clients. With FXCM out of the picture in its US home market, the only other viable alternatives are Gain Capital (which ‘bought’ the clients already), and Oanda (more on what they’ve done below).

The feeling in the Retail FX sector is that FXCM is now vulnerable in Europe, Australia and Asia, with its US troubles creating serious reputational problems for FXCM. Whether or not regulators outside the US take similar action against FXCM, its reputation as a broker which deals fairly and transparently with clients have clearly been sullied.

There are a number of retail forex brokers who have responded quickly by upping marketing budgets and sending email blasts, specifically targeted at FXCM customers.

In one such ad (see at right), a broker used the special font which FXCM uses in its logo to write the word ‘FROM’, asking traders to switch ‘FROM’ your broker to them. (Compare the FROM in the ad to FXCM’s logo above).

The ad is very clearly aimed at FXCM clients.

In another email blast late last week, a broker is touting itself as a Reliable, Safe, 8 Year Old Brand. Again, targeting those who suddenly feel that their broker might not be as reliable nor safe as they thought.

As for that ‘other’ US licensed broker left out of the FXCM-Gain Capital deal, Oanda. Oanda’s new CEO Vatsa Narasimha was clearly miffed at being left out of the FXCM-Gain Capital deal, leaving Oanda as a distant second to Gain in the US market. Oanda put out a statement by Mr. Narasimha which, in our view, was not exactly a ‘classy’ move. In the statement (full text below), Oanda took a very cheap shot at FXCM, stating that the it ‘applauds the CFTC’s recent action‘ and that the CFTC’s banning of FXCM was an ‘extremely positive move… the retail trading industry as a whole will benefit from a more transparent approach where brokers are held accountable…’.

The ads and email blasts targeting FXCM clients, IBs and Affiliates we understand. There is blood in the water, so the sharks are circling. However those brokers were promoting themselves and why they are strong and worthy of your business, in a positive way.

But what Oanda and its still-green CEO did was, to put it mildly, not exactly a class move, kicking your competitor when they are down.

The full text of Oanda CEO Vatsa Narasimha’s statement follows:

OANDA supports CFTC’s move to protect the interests of traders

A statement by Vatsa Narasimha, Chief Executive Officer at OANDA:

“At our very core, OANDA has always been an extremely client-focused organisation, dedicated to creating a fair and transparent arena in which retail clients can trade, safe in the knowledge that we have their best interests at heart. That’s why we believe the affirmative stance taken by the US Commodity Futures Trading Commission (CFTC) against the misrepresentation of interests to retail clients trading the global currency markets is an extremely positive move. Given our long-standing commitment to integrity, we believe the retail trading industry as a whole will benefit from a more transparent approach where brokers are held accountable for making questionable statements or falsely disclosing their interests.

Customers should trade with a broker they trust. Throughout our 21-year history, OANDA has earned a reputation for always putting our clients’ interests first. Closely regulated by six authorities around the world, we work hard to ensure our clients succeed by offering transparent spread-only pricing with no hidden commission, no requotes and no rejections. We’ve also remained true to our legacy of integrity even during unprecedented market events such as the SNB crisis. As an organisation, we are committed to helping our clients succeed, protecting their interests wherever possible.”

OANDA’s Commitment

Widely respected in the trading industry, OANDA combines cutting-edge trading technology and institutional-grade execution across a wide range of asset classes, enabling clients to trade global stock indices, currencies, commodities, precious metals and treasuries on the world’s best retail FX platform[1]. The firm boasts a state-of-the-art V20 trading engine that execute trades in less than two milliseconds[2], significantly reducing the chance of slippage in one of the world’s fastest-paced markets.

OANDA is also firmly committed to partnering with clients on their journey towards becoming a successful self-directed trader, constantly striving to help them harness the power of the markets as they trade. From their award-winning education program to providing up-to-the-minute market commentary and a host of charting applications that help reveal potential trends, the firm arms their clients with the necessary tools required to make educated decisions and trade the markets with knowledge and confidence.

OANDA applauds the CFTC’s recent action and looks forward to working together towards the overarching goal of achieving a secure experience for traders.

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  • Drew

    I Guess what goes around comes around.

    In 2013, after the haircut imposed on Cypriot depositors, FXCM genius CEO, was attempting to poach clients from Cyprus based brokers sending emails with subject Worried About Cyprus and Your Forex Broker ?

    Now is pay time for the Fat Pig

  • Bart Burggraaf

    Not sure why so negative about the OANDA statement. They have shown time and again to be on the side of traders, and saying they welcome the regulator to take action when there are issues is not a very controversial position to have?

  • Haroun Kola

    Bye bye FXCM

  • bob

    Leaprate still are you still in denial? FXCM broke the law. Abused client trust, committed fraud by misrepresentation against there clients, B booking is accepted but not when your told your trading an A book. This is why DN will never head a financial organisation in the US. I strongly suspect the FCA and CYSEC are looking at FXCM under “treating customers fairly” regulation. As well as checking that the CF functions still pass a “fit and proper persons test” ie some management in other FXCM locations may have worked in US at this time and had opportunity gain insight into illegal practices FXCM are being punished for but did not report it…..

  • Barry Bahrami

    I am disappointed in Leaprate for this article that seems to be bashing Oanda. FXCM has been proven to be crooks. I called this a few years ago and nobody seemed to care. Oanda merely pointed out they have NO regulatory actions against them. My experience with them is that they are a fine and upstanding company. Why are you so against them getting that information out there? It seems reasonable to me that if your broker is a ousted by regulators for being a crook, it’s only prudent to review your options and not automatically go to where they *sell* you to. I mean come on…get real

    • LeapRate Staff

      Sorry have disappointed you, @barrybahrami:disqus . But we stand by our comments. Our comments were not a defense of FXCM, we have been fairly straightforward regarding our coverage of what happened there. Our comments were an indictment of what we believe is very bad judgement by Oanda. This was a classless move by Oanda, to kick their competitor when they are down and to ‘applaud’ the banning of their competitor.

      As we wrote, we believe that one of the reasons Oanda made the (in our view poor) decision to put out this PR is that they were left out of the deal to buy FXCM’s US clients. As we have pointed out in much of our coverage, it is very expensive to run a US regulated operation. So getting a large chunk of clients and volumes for nothing up front and little additional fixed cost is going to give Gain Capital and its unit a major advantage over Oanda in the US.

      • Barry Bahrami

        As I understand the terms of the deal, Gain is not paying
        anything upfront either. And FXCM is no longer what I would consider to be a competitor of Oanda, at least not so far as the clients in question are concerned.

        Oanda has no history of regulatory actions against them. To me, that is something I as a trader would want to know. If you want
        to talk about classless moves, I would refer you back to the original shenanigans that got FXCM into this position to begin with.
        In my opinion, anything to give those traders a fully informed decision who they move their accounts to is good. You should be reporting more on those options available to them rather than knocking a broker for doing that job for you.

        • LeapRate Staff

          There’s a way to market yourself though. And this isn’t it. Ask any educated PR executive. What Oanda did paints them as low-class, vindictive…

          • Barry Bahrami

            While I understand where you are coming from, your logic just does not add up. To me, it paints LeapRate in the way you just expressed how Oanda is painted.

            On one hand we have Oanda, with no history of regulatory issues whatsoever and an unimpeachable reputation for serving their traders interests exceptionally well. On the other hand we have Gain, who a now “convicted” broker quickly sold all US
            accounts to, and if memory serves me right also had a fine for “slippage malpractice” or something to that effect just a few years ago. Is that something traders should know before blindly moving their accounts?

            Should Oanda not have commended the CFTC for tossing out a crook broker? What FXCM did victimizes
            all market participants, most especially brokers because it further erodes the underlying trust that is essential between broker and trader. Without that trust, traders leave the market and everyone suffers. If a criminal is thrown the book by a judge, is it vindictive for one of their victims to applaud the judge for handing down the heavy sentence?

            But you feel the need to call foul when Oanda calls a spade a spade? What are your motivations? Are FXCM or Gain big advertisers on your site? You are so off base you’re not even in the stadium!

            I do believe you owe Oanda an apology. I won’t hold my breath waiting for it.

            I should add that although Gain was fined some years ago, I have no information suggesting Gain is currently engaged in any unethical behavior. You seem to be in that club all by yourself.

          • LeapRate Staff

            You’re missing the point @barrybahrami:disqus . Oanda might be as clean as a baby fawn. That’s irrelevant. What IS relevant is that they made a major PR goof and made themselves look very bad in the process. You don’t commend a regulator for punishing a competitor. Its a classless move. We’ve received a lot of feedback from industry people, PR people, traders et al on this. And almost unanimously, everyone thought that Oanda comes off looking very bad.

          • Barry Bahrami

            Right…how dare a broker with an unimpeachable reputation publicly pats the people on the back who are tasked with the difficult job of protecting all market participants by ensuring trust and integrity, and tells them they did a fine job. How dare they reassure traders there are brokers who can be trusted out there!
            Thanks I think I understand where you are coming from.

  • Scrapfx

    Looks like those damn Cyprus based Israeli brokers are at it again. Scumbags to say the least !!

  • Stelios

    FXCM is just getting back what it used to give out. After the Cyprus bank crisis they were all over the place with ads aimed at stealing clients from Cyprus brokers. What goes around comes around.

  • Matt

    Oh come on, you guys see a need to dedicate an entire block to hammering OANDA? From your readers feedback, now that is bad PR.

    You can’t commend a regulator for punishing a competitor… who has lied to its clients to the point it has been banned from entire countries? These kind of acts sully the whole industry.

    In fact, I’ll put my money where my mouth is and bet they don’t survive past this year.

  • Scott

    I have to agree, it may be classless but it is no different to what FXCM would have done to a competitor.

  • Silent Janitor

    It’s just a bad PR for OANDA.


Forex brokers actively looking to poach FXCM clients, IBs and Affiliates - LeapRate Exclusive


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