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Screenshot of a breaking news alert e-mail from Q2 2017
LeapRate Exclusive Interview… LeapRate has learned that popular Australia based FX trader education website Traders4Traders has had its Australian financial services (AFS) license fully reinstated by Australian regulator ASIC.
We had reported back in February that ASIC had issued a temporary suspension order for Traders4Traders’ license, after it found that Traders4Traders failed to lodge financial statements, auditor reports and auditor opinions over consecutive years.
LeapRate is pleased to be joined today by Traders4Traders founder and Managing Partner Brad Gilbert to discuss what really happened, and the lessons learned here which we believe are important for anyone charged with managing a regulated financial company.
LR: Hi Brad, and thanks for joining us today. The past couple of months must have been somewhat difficult for you. Can you please let us know what exactly happened with ASIC, how the license suspension happened, and what followed.
Brad: Hi LeapRate, and thank you for the opportunity to tell my story and for giving me the time to answer the many questions we got about our ASIC license suspension. If anyone has similar issues please feel free to give me a call or send me an email, I’d be more than happy to help you out.
I think this will be a great learning experience for many regulated companies.
Back in early February we got a call from ASIC asking us to attend a meeting and explain why we hadn’t submitted our annual audits. Well this was the first we had even heard they hadn’t been completed.
At the meeting I explained we had no idea of the issue and the reasons behind why we didn’t even realize there was an issue. They suspended our license and gave us 3 months to complete the audits and if they were completed in time then the license would be reinstated.
The reasons behind why the annual audits fell behind:
- We had upgraded our office 3 times (to larger premises each time at different addresses) over the past 3 years. We had changed our address online on the ASIC site but it appears there are 3-4 different registers that need to be updated and we didn’t get them all. So all correspondence was going to the wrong location and we never even knew we were overdue.
- We had both an accountant and compliance contractor thinking that the other person was doing the audits when in fact neither was doing anything. It simply slipped through the cracks and ASIC mentioned that this was a common occurrence as most companies outsource these areas and they are often messed up or forgotten.
I’m happy to report the audits have been completed and the license immediately re-instated as we fully complied with all AFSL requirements.
LR: Please let our readers know some more about Traders4Traders and what you do. Is your type of activity regulated elsewhere in the world?
Brad: Traders4Traders was established to fill the void between the banks and retail traders. We identified a lack of ‘experienced’ training in the market and went about correcting a lot of the pitfalls many retail traders make.
So we provide an online Pro Trader Course that provides proper understanding of market structure, explains why prices move and how to trade those price movements. It’s the core foundation knowledge junior traders at banks are taught and it’s essential to a long term trading career. After all anyone can be successful over the course of a week but if you want to be a full time Pro you need the back bone knowledge to get you there.
We also have a range of Advanced Trading strategies to upskill traders knowledge and understanding to allow them to trade certain market set ups.
We spent the last year building a back end system to enable our clients to purchase individual components or the whole bundle, it’s their choice. This provides greater flexibility with the learning process and makes it more cost effective for everyone to get involved.
There are no regulatory requirements for training courses. They are deemed ‘factual’ and not general or personal advice. So no license is required in just about all countries. We chose to have a license because we thought it was important to differentiate ourselves from all other companies and it also allowed us to expand our training with a bit more depth. Not necessarily giving general advice but we do get to know our clients more and that’s important to have the license to cover any grey areas.
A lot of brokerage firms and other professional organizations like to see a license in order to do business so it has helped having the license even though we don’t need it.
LR: What have you learned through the whole process with ASIC? Do you have some advice for others running a regulated business?
Brad: We’ve learned a lot!
- Make sure you don’t take a back seat and ‘assume’ things are getting done especially with regards compliance. Make people accountable and make sure they know there duties very clearly!
- Don’t be afraid to approach the regulators (ASIC) if you do have an issue. They are actually extremely helpful and will guide you through the process. So basically they aren’t as bad as they are made out to be.
- If you do change address call the regulator yourself and check to make sure all registered addresses have been updated. In saying that we had done that but missed 1 out of 4. It just so happened to be the one they sent the mail to.
- If you change web/email hosts and update your email domains make sure you put forward redirects on any old domains. This was another issue we failed to update.
- Make sure your accounting and compliance team are talking to each other and that they know their roles and tasks.
- Last but not least. Double check regularly that things that need to be done are getting done. Don’t fall asleep at the wheel!
LR: Now that this episode is behind you, what’s next for Traders4Traders? How do you see the company progressing from here?
Brad: Well we spent the suspension time wisely. We revamped out website and Members area and have established some great broker relationships going forward. We have a great new initiative with a number of firms: Why pay extra for training when your broker can pay us to give it to you for FREE. (basically open a live trading account and trade your way to free training).
Plus there are also funding bonuses for new accounts. Check out the site: https://traders4traders.com/free-training/
This is going to be huge. We identified through a number of market surveys that most traders are sick to death of paying for things especially ‘training’. So taking this burden off them is going to change the way people learn. The response so far has been amazing.
We have a 2 Day Pro Trader Workshop scheduled in London on the 6-7th May and Sydney on 13-14th May. We’ll be back in New York in Mid-June.
So we’ve got a full schedule and it’s looking promising after a very subdued 3 months on the bench!
LR: You’ve been involved in the Forex industry a long time (25 years, correct?). What shape in the Forex sector in today in your view? How do you see it changing in the coming months and years?
Brad: The forex market like most markets has had a pretty wild and wacky few years. But I’m happy to say the markets have now fully stabilized and are easier to trade. The fact the FED have raised rates brings hope to all struggling economies and it builds foundations for future trending markets, which all traders love. It’s been a while but bring on the trends!
But one thing I’ve noticed from years ago to now is how dynamic the market is now. You really have to be on the ball to pick up sudden changes of sentiment and the moves are running further than normal. It’s this massive difference in market dynamics which is catching out many inexperienced traders.
Moving forward I don’t think many things will change. There’s always talk of a new ‘base’ currency to replace the USD but I just don’t see it happening. The USD is the backbone of all financial markets so to change it means changing everything and the logistics of that are just too hard to fathom.
I do see a bigger crackdown from regulators in the not too distant future. There has been rumblings for a few years that people will need to be qualified to trade the markets. That will slow things down but in a good way and it’s definitely required.
The markets I think we have already hit rock bottom and we’re on the way back up. It’ll take a few years yet but it’s going to happen…just slowly!
LR: What basic advice do you have for Forex traders in today’s environment?
Brad: If there’s three bits of advice I could give traders it would be:
- Make sure you trade with a plan and keep it consistent. Don’t go changing the whole structure of your trading on 2 or 3 trades. If you do that you’ll be chopping and changing every week until you run out of money or before you have time to develop a wining methodology
- The first thing you should learn is capital management. Once you have that under your belt then trading becomes fun.
- Make sure you understand market structure, know why prices move and how to trade them. If you get this you’re on your way to big rewards!!