Five metrics IBs should focus on to maximise trader success

Whilst the obvious metric of choice for IBs when it comes to judging a trader’s success would be profitability – and maybe in turn the longevity of the client – there’s a whole host of factors that can and should be monitored. By taking a proactive approach here, it’s easier for introducing brokers to keep across the performance of their client network, spot issues early and engage in a more effective way with the ultimate goal of driving client success.?

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Fraser Nelson , Global Head of Business Development at Scope Markets outlined five key points to consider in helping you – and your clients – meet your objectives.

Trade frequency??

How frequently is the client placing trades? Over-trading has the potential to be problematic as the spread means there’s a small cost on each trade and does the client need to be encouraged to slow down a little? Conversely, a reluctance to place trades can be a warning sign that the client isn’t finding the trading opportunities they want. Do they need to explore other asset classes or can you introduce them to additional trading strategies? ?

Responsiveness?

When you’re engaging with the client, how quick are they to either come back to you or take some definitive action on their account? Markets are constantly moving so long lags between the publication of insights or trade ideas and orders being placed have the potential to lead to missed opportunities. Stress to the client the importance of doing their own research and also how time-sensitive markets are.??

Hold times/exit strategy?

Just as important as knowing when to enter a trade is the skill of understanding how you should plan for an exit. Hold times that are either too long or too short can be problematic. Is the client backing a winning trade but failing to book profits before the price reverts, or are they habitually exiting positions too quickly, maybe in a panicked response to small losses???

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Engagement?

Does the client engage with you on a regular basis? Failure to do this could be reflective of the fact that they don’t believe you are adding value to the relationship, something that in turn could lead to the client moving their business elsewhere. Look across your client book periodically and see who is quiet. Take time to reach out to them, perhaps the client is lacking the confidence or belief to trade, so you reaching out may be all it takes to inspire their appetite for trading.?

Profitability?

Arguably the most obvious point, but are the clients making money? What can you learn from the most successful in the cohort and how can you assist those who aren’t performing quite as well. After all, the majority of the clients will only be focused on the dollar balance in their account at the end of the day, week or month, but by taking a more holistic view and understanding their trading behaviours, you’re better placed to help them succeed in the markets, which obviously comes with benefits for you, the IB, too.?

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Talk to the partners team at Scope Markets to understand more about the vast range of instruments and reporting tools we offer, helping support you as an IB [email protected].

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