Alpari: pushing the boundaries
With a passion for first class service and innovation, Alpari is one of the world’s fastest-growing providers of online foreign exchange trading services. Across both retail and institutional segments, Alpari is committed to providing its customers with highly competitive pricing and fast execution through a range of trading instruments and platforms. Building on the group’s impressive growth, Daniel Skowronski, Global Chief Commercial Officer and CEO of Alpari (US) LLC, has ambitious plans for global expansion in 2011. FX-MM Editor, Eleanor Hill, investigates.
New York, London, Frankfurt, Mumbai, Dubai, Moscow, Shanghai, the Alpari branch network serves clients in over 150 countries and is testament to the company’s goal of becoming the leading worldwide forex broker within the next two years. Founded in 1998, Alpari currently has offices in key financial headquarters across the world. With over 400 employees worldwide, more than 330,000 customer accounts and monthly forex trading volumes in excess of $147 billion (May 2010 figures), the Alpari Group is one of the market leaders in forex.
Numbers aside, the first half of 2010 also saw several strategic technology and product launches, notably: MetaTrader 4 Pro accounts featuring Straight Through Processing via Non-Dealing Desk Execution; over 100 Contracts For Difference instruments (CFDs) trading on shares, commodity and energy products as well as forex and precious metals trading from a single account on MT4. With a forward-looking philosophy, Alpari also introduced MetaTrader 5 and a proprietary MT4 technology in the US which addresses trading under the NFA imposed rule for placing orders on a ‘First In First Out (FIFO)’ basis. All this begs the question, ‘what’s next for Alpari?’
Recently appointed, Daniel Skowronski is just the man to answer that. With an FX pedigree spanning over 18 years, the former Managing Director of Currenex® has already begun to make his mark at Alpari. Historically operating as three separate entities, Skowronski’s vision is to unite the group companies under one global umbrella, sooner rather than later. “Prior to my arrival, Alpari had been very fragmented, spread between the UK, US and Russia. Under new plans, Alpari will be operating under a global strategy, with our main operations headquartered out of the UK.”
Although existing management had a similar long-term strategy, Skowronski was keen to get started, in particular in view of plans to launch an IPO within a three to four year timeframe. Moreover, Alpari was looking to move away from a model which fostered competition between branches and instead to look at tackling external competitors. “It’s much more effective to bring all the companies under one roof and to operate with a common strategy and set of goals. We do expect that it will take a little longer to integrate our entire operations across the globe,” says Skowronski, emphasising that the global strategy has a one to two year timeframe. Explaining other challenges he encountered when joining Alpari in June 2010, he says: “It was immediately apparent to me that the US branch wasn’t as well known as perhaps it should be. Since the US is one of the most opportunistic markets, it was imperative for us to get started quickly. So the idea was to re-create the strategy, make a much more attractive proposition and bring the US office in line with the UK model.”
At that time though, regulatory changes, such as the CFTC proposals surrounding retail FX leverage, were still afoot in the US. I am curious as to Skowronski’s strategy and how he managed to build in contingencies for the possible outcomes. “We really took a gamble on predicting the final outcome of the proposed regulatory changes based on our new US strategy,” admits Skowronski. But he is keen to stress that this was an educated approach, “Using market knowledge combined with that of the contacts I have in the industry, we based our strategy around a conclusion which actually was very close to the final rules, such as the 50:1 leverage.”
Before the rules were finalised, some market participants were suggesting that they could mean the end of retail FX in the US. Of course every country has its scaremongers, but was there any upside to the new regulations? “We do see this as an opportunity. For US customers it is now illegal to trade retail Forex with a foreign or offshore broker. Many of those brokers were caught off guard when the changes were announced, but in fact it turned out to be one of the more pleasant surprises, enabling Alpari (US) LLC to be competitive in the US market”.
Plans for global expansion are also in the pipeline, with an office in Australia due to open the beginning in the first quarter of next year. Singapore and South America are also locations that Alpari is currently considering as a strategic play for 2011. “We want our customers to be able to open up an account in whichever jurisdiction they feel most comfortable with. Obviously, the new rules in the US mean that domestic customers are limited, but elsewhere, we want to allow our retail and institutional customers, as well as any introducing brokers or other potential partners, to have freedom of choice and flexibility to trade with Alpari.”
Choice is something that Alpari sees as a key differentiator from the growing competition. Having an FSA licence is also something that Skowronski views as an important asset, “It is like a seal of approval for foreign customers, making them feel much more comfortable in dealing with us, especially due to the segregation of customer funds” says Skowronski, referring to the popularity of the company’s Japan desk which operates out of the UK. “Foreign customers are beginning to look outside their own borders for FX offerings and Alpari is determined to be the company to meet the needs of those international customers.”
Offering customers a wide variety of jurisdictions is one thing, offering a choice of products and platforms builds on that. “There are a number of different FX tools out in the market today starting with the actual trading platform itself and ranging from manual to automated trading functionalities. Alpari has a variable spread model and offers some of the best and tightest pricing in the market. We also offer several different platforms – MT4, MT4 Pro, and Currenex® platforms. In addition to these we offer a fully documented FIX API for more sophisticated clients. All our platforms come in different configurations, for instance, we offer both Micro and Classic/retail accounts on MetaTrader. Pro customers can trade on NDD STP basis via API, MT4 or Currenex®. For our institutional partners, we have launched a full suite of white label products based on MT4 or Currenex® platforms.”
I know from Skowronski’s biography that he was responsible for creating a retail platform out of the Currenex® institutional platform and while there he helped to launch Alpari’s institutional services – powered by Currenex Technology ®. “Alpari’s institutional offering, Quantum FX, is credit-driven and the client base consists of hedge funds and trading desks within large institutions looking to leverage Alpari’s technology and liquidity. Further strategic hires are being made to support Quantum FX, which goes live this November.
Meanwhile, on the retail side, customers are able to trade via a variable pricing scheme, or ECN model; they are also able to trade on MT4 through Alpari’s Currenex® bridge technology developed in-house. According to Skowronski, “The suite of products that Alpari has built allows customers the flexibility to trade in the way that suits them whilst also ensuring best execution.” Surely this means a lot of work behind the scenes though – wouldn’t it be simpler to have a core offering? “Alpari is one of the largest MetaTrader brokers in the market and that will always be a part of our core offering. Fortunately, the technical side of operations is a real strength for Alpari and we always aim to be efficient in terms of bringing innovative products into the market. Whether that means developing internal solutions to facilitate our customer needs such as our Currenex® bridge and MT4 money manager module or licensing popular platforms such as MT5 or FX Options – it’s the way we like to do business and stay ahead of the competition.”
Alpari has a reputation for innovation and I want to understand where the ideas come from and how Skowronski plans to implement structural changes and expansion whilst keeping up with the market. “When I arrived at Alpari, there was a need to bridge the gap between the business side and development. In my previous roles, I was fortunate enough to work with some great individuals and seeing the potential for growth at Alpari, I recruited certain people from that talent pool to come and join us here.”
One of the new hires at Alpari is Patrick McTurk, who came across from Currenex® as a Product Specialist. His role, as Skowronski explains, is really to bridge the gap between the sales and business initiatives and to bring the technological development to fruition efficiently. “Patrick is the guy that can really close that gap. While we want to be able to predict what the future holds and what products will be in high demand, the challenge is not necessarily the conception of those predictions but rather how they become a reality.” Put simply, it is Patrick’s team that allows Alpari to innovate and compete.
Another recent appointment is Mushegh Tovmasyan as the Global Head of Retail Sales. His primary role is to oversee and develop the sales teams and operations in all of Alpari’s global offices. Additionally, Mr. Tovmasyan has assumed responsibility for driving new business developments which contribute to Alpari’s global expansion plans. He has been instrumental in introducing new platforms and trading products for the company’s retail and institutional business solutions such as the recently launched Alpari FX options, an area which is experiencing increased client demand. “The attractiveness in this offering is that you can trade spot FX or FX options under one platform, which is also extremely multifunctional and user-friendly,” observes Skowronski enthusiastically.
A host of industry awards is illustrative of the appreciation that Alpari’s customers have for the company’s dedication and service. “Every broker has a trading platform out there, but Alpari differentiates itself on the technical expertise of its execution. This is one of the biggest factors for anyone trading FX – offering great spreads is one thing but at the end of the day, if the client can’t execute their trade, none of the promises made by brokers mean anything.”
“At Alpari we want to help our customers make money,” says Skowronski when mentioning Alpari Academy, a service that provides customers with tools and education on Alpari’s website. “Today, it’s all about sharing our expertise with our customers and educating them to learn more about the market”. Training seminars, webinars, Alpari Squawk (live market commentary) and the online learning centre, featuring technical analysis, chart pattern recognition tools and fundamental studies, are all part of this customer education piece. “Alpari believes in educating and supporting our customers so that they have the necessary tools to make informed and responsible trading decisions which will make them successful in the long run.”