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Screenshot of a breaking news alert e-mail from Q2 2017
Recent news that LMAX CEO Robin Osmond is leaving the company, less than half a year after LMAX launched service, is further indication that it is not easy to break into the online retail Forex industry. Despite being backed by the money and web-centric knowledge of online gaming leader Betfair (as well as investor Goldman Sachs), LMAX took a lot more time and more money – an estimated £25 million – to get to market than expected, and apparently the results in terms of volume buildup have not been stellar. Interestingly, its CEO leaving did not make LMAX’s own Press Centre page. (Apparently other news about LMAX winning some award for its trading platform, launching a smartphone trading app, and appointing a new legal and compliance officer were more newsworthy! So much for transparency.)
The LMAX news follows on the heels of online gaming firm Paddy Power ending its White Label agreement with London Capital Group, and pulling out of the financial spread betting business.
We believe the message here is that it is simply not easy to break into the online Forex business. It requires very specialized talent and experience, and not necessary a throw-all-our-resources-at-it approach. Most if not all of the current leaders in the online Forex trading world – including all of the firms on our Approved List of Forex Firms – have built their businesses steadily over time, while managing to keep costs down at reasonable and sustainable levels.
For more on the online Forex sector see LeapRate’s Online Forex Industry Report, now updated for 2011.