A new player to the spread betting industry, FCA regulated Zenfinex has some ambitious plans for the future. The Armchair Trader’s Michael Morton, talks to CEO Nick Cooke about the business and his thoughts on the the industry in the midst of the global pandemic.
AT: Can you tell us a little about your background in the industry and why you decided to set up Zenfinex?
Nick Cooke: I entered the industry in 2008 when I joined FXCM in their New York office. It was during the subprime financial crisis when the markets were collapsing and extremely volatile. At the time there were mass bankruptcies, not the best time to be looking around for a job! I went for an interview with FXCM who seemed to be one of the only firms hiring on Wall Street and got the job. After three years managing a sales team in New York, I was moved to Australia to oversee the Sydney office for two years. Originally from the U.K. I finally came full circle and moved back to London in 2013!
After a year working with LCG, I decided to set up my own brokerage Global Markets Group (GMG) in 2015. GMG became FCA regulated in 2016 and started onboarding clients right away. We found a niche of working with higher volume traders who were looking for customised liquidity solutions. The business was quite bespoke managing expectations between client flow and liquidity providers. In 2017 I was approached by an Asian investor who ended up buying the company.
At the end of 2018 I decided to enter the industry again. Zenfinex was born and became FCA regulated in 2019. In the initial stages I was approached by private equity investors who expressed an interest to move the company forward together. Fast forward to today and we have a clear global growth plan with ambitions to become a mid-tier broker in the near future. Within the last few months, we have hired 15 staff, we have exciting product launches and plan to become regulated in multiple other jurisdictions. I’m really excited to be heading up the project and truly believe that Zenfinex can compete alongside the major players.
AT: It’s been an extraordinary year for us all – how has Zenfinex fared in 2020?
Nick Cooke: Its been a crazy year for the world hasn’t it? We’ve all had to do adapt to this new world amongst the pandemic and we all hope the situation gets better soon! Whether it will get better in the short to medium term, time will tell.
For Zenfinex it hasn’t affected our operations too much. We completed an investment deal in April 2020 and since then we’ve ramped up our operations significantly. We’ve opened multiple offices globally although a large portion of our staff are still working from home.
We are very much in the process of launching the operation and fine tuning the infrastructure. There’s a clear vision in place of how we will succeed and grow the business. We have staff in London, Cyprus and also Asia and the Middle East. Our focus is to grow out our product suite including platforms and to become a multi asset broker in the not too distant future.
There is high volatility in the market and this is what brokers want. We aim to grow the firm at a significant speed in this environment and to push on with the recent investment that was injected into the firm.
AT: Have you had to do things a little differently to adapt?
Nick Cooke: Yes definitely. While the volatility has increased there have been significant challenges for all businesses, not just ours. It is not easy to scale up operations amidst a global pandemic. The pandemic has wiped out all international travel options. This means we’ve had to hire staff based on interviews over Zoom. It makes it more difficult to meet up with clients and partners. The world is not the same right now.
We are fortunate to be involved in an online industry so much of our operations can be handled from home. Expanding globally has been challenging but we are trying not to let it slow down our growth plans.
AT: We’ve seen interest in the financial markets rise this year, particularly during lockdown. What would you be saying to anyone considering trading right now for the first time?
Nick Cooke: There are many opportunities trading the markets as they are moving. Stock markets have gone lower. Gold broke 2000. The volatility index climbed above 80. Opportunities are plenty, however like we always say, education is key.
We’ve found an increasing number of newer traders showing an interest in trading. Many have more capital as they aren’t spending as much and are learning new skills working from home. Its important that these newer traders see the opportunities however also come into the markets with some understanding so they can capitalise on any movements. In the retail trading space, education is so important.
Part of our growth plan is to partner with some of the top educators in the space. We want to associate with educators that fit well with our brand and what we are all about. As an STP broker we survive on volume. Therefore we want traders to get better at trading so they are likely to trade more and have greater confidence in the markets.
AT: With a number of established brokers in the space, what differentiates Zenfinex from some of the larger providers?
Nick Cooke: This is a great question and one I’m asked quite a lot! It is true that the space is very crowded with some really large players to compete with. This is always a challenge. Saying that I believe there are numerous ways we can compete. We have a lot of experience within the team who have good relationships and knowledge within the industry. A strong team is always the foundation of any successful business.
Secondly, I feel our niche is that we will work closely with our clients to offer value add that other brokers are too big to care about. With our smaller retail traders, we are passionate about giving them the tools they need to succeed. This is why we are creating partnerships with some of the top educators in the space for these traders to work with. For higher volume traders, their key consideration is the product, namely pricing and execution. We have relationships with multiple liquidity providers so can be a vehicle to provide tailored liquidity to match the pricing and liquidity to the clients’ needs. This improves their trading experience and higher volume traders appreciate the attention they get from our team.
Having a strong balance sheet is also key to success. The investment in the company from our backers has allowed Zenfinex to accelerate our growth plans. We have opened offices in four countries already. Our plan is to get regulated in various parts of the world in addition to our FCA regulation. We are building the business using our FCA regulated status to promote security and trust. Within the industry the FCA is probably the most respected regulator so we are sure that will help to provide the necessary platform to assist us to grow the business and therefore earn our client’s trust.
AT: Are there any new developments on the horizon for your clients to look forward to?
Nick Cooke: There are plenty. We recently added ZenConnect to our product suite. ZenConnect is a social trading platform that connects institutional fund managers with retail investors all under an FCA regulated structure. This is really appealing from both sides. The bridge between institutional and retail is wide and our goal is to reduce that. Fund managers can still trade from MT4 and retail investors connect or follow through the ZenConnect App. It’s a good option.
Next year our clients can expect to see more international offices and more asset classes being introduced. We plan on launching MT5 alongside the current MT4 offering which will assist us with this goal. This will also be available for UK clients on spread betting to maximise the tax advantages of this account type.
We are also weighing up more platforms and tools that can only assist the trading experience with Zenfinex. We are excited for 2021. We hope the worst of the pandemic will be over and that we can continue to build our offering globally.
AT: Do you see market volatility and economic uncertainty coming to an end any time soon?
Nick Cooke: I believe market volatility is here to stay. The pandemic has certainly unsettled the markets, however there are many political events to keep an eye on. The US election is one that will certainly create some price moves as will the continuing Brexit scenario. It’s quite possible there will be mass bankruptcies and layoffs as a result of the pandemic. This will also unsettle markets which presents trading opportunities.
Its interesting times for sure. The main thing is that people stay healthy and that we continue to fight this pandemic. Like everyone else, I hope that next year we can get back some normality and recover globally from the craziness of a year that was 2020! Here’s to a positive 2021. Cheers.
Zenfinex is an FCA regulated broker providing Spread betting, CFD and FX services.