Drew Niv Warns Of Prop Firms’ Growing Influence Over FX Brokers

During the Finance Magnates London Summit (FMLS:24), Drew Niv, the Chief Executive Officer of TraderTools and Chief Strategy Officer at ATFX, gave his opinion regarding the changing world of crypto, prop trading, and the brokerage industry.

While talking to Yam Yehoshua, Finance Magnates’ Editor-in-Chief, Niv spoke about the problems and chances brokers face as new players and technologies join the scene.

Niv said when compared to top financial firms, the largest company in the industry is very small. He pointed out that the crypto market has seen many ups and downs, but now it seems steadier because investors are investing more money.

Brokers Must Innovate To Stay Ahead In The Growing And Competitive Market

However, he warned that bigger investors and new rules might bring tougher challenges to the FX and CFD space. Niv also talked about how major crypto companies might start offering FX and CFD trading. This will grow the market but also make it harder for brokers, who will need to come up with new ideas to stay ahead.

Niv wasn’t the only one sharing concerns about the CFD sector. Another speaker at FMLS:24, Tamas Szabo, the Chief Executive Officer of Pepperstone, said crypto exchanges are moving into the industry.

Niv warned that these crypto firms will reach clients brokers don’t currently serve. And it’s not just crypto companies. Firms like Robinhood, discount stock brokers, and online banks like Revolut are entering with a much bigger reach.

He also discussed how prop trading firms are changing the game. A few years ago, he didn’t take them seriously, but now he sees how much of an impact they have.

These prop firms get 20 times more website visits than the FX industry does, showing they have a much bigger group of clients, according to Niv. To keep up, ATFX launched a new prop trading program two months ago. This program focuses on honesty and offers a long-term way for traders to succeed.

Niv Warned Brokers To Keep Up With Changes Or Risk Becoming Irrelevant

Niv shared that the prop trading system doesn’t promise impossible rewards but gives real chances. Traders can earn payouts, try copy trading, or even become money managers. He believes this straightforward method will help brokers stay strong and trusted.

Looking ahead, Niv thinks the industry will see big changes and companies teaming up. If brokers do their job well, standalone prop firms won’t be able to keep up and brokers need to balance risks and rewards carefully to stay attractive to clients.

Talking about the past year, Niv said 2024 has been better than 2023 for brokers. It wasn’t a perfect year, but it went more smoothly as brokers learned from the challenges of 2023 and improved. This learning also pushed the teamwork between TraderTools and ATFX.

As the industry faces more changes, Niv noted that brokers need to adapt quickly. If managers don’t keep up with changes, companies will fail fast. Even the top brokers in the industry are tiny compared to big financial companies and could be wiped out if they don’t improve, he warned.