Muhammad Rasoul
Muhammad Rasoul

Alpha - the boutique broker with a focus on partnerships

e-Forex talks with Muhammad Rasoul, CEO of Alpha which specializes in providing customized execution, risk management, and liquidity to financial institutions operating in the retail OTC market. The company also provides bespoke execution services to professional clients.

First Published: e-Forex Magazine 74 / e-Forex Interview / December, 2016

Muhammad you have had over 20 years’ experience in the industry holding senior positions in some of the biggest companies in retail FX. What has specifically drawn you to the B2B market?

Interesting question. When I started in the OTC space in the 90’s most of the business that we did was what many firms now call “indirect” business development. This B2B market has existed from the very beginning at all of the big shops that you see now. It’s been a staple of their means to prosper and survive for decades. The main issue though has always been how to manage the conflict of interest between selling a retail customer direct through your brand and also onboarding these indirect relationships with retail customers. How do you compete with a firm but still partner with them and assure them this conflict of interest doesn’t exist? It’s a big problem, always has been.

Alpha is merely focusing on this single indirect segment of revenue and putting those firms in contention with the big names that try to do both. We give them all the benefit of 20 years of retail FX and CFD market making at the highest level but instead of giving revenue to your competitors you keep more in house, and more importantly out of the marketing coffers of your competition. Alpha due to its size and focus will always be more competitive commercially with its partners than a large retail broker trying to do both. It’s a simple proposition.

My team is top notch. They are all proven at the highest level.
My team is top notch. They are all proven at the highest level.

When was ACM launched and what products and services has it been built to offer?

Alpha as we know it now started in February 2016 with a soft launch and really started to offer its business services around April/May. It’s vision is to fill the needs of any partner. FX, CFDs, spread bets, single stocks, DMA, all facets are covered in our offer. Cash Equities are available as well, with Alpha allowing its customers to use both Cash and Stocks as collateral for derivatives trading. The entity itself has been around since 2006, however before 2016 it was a traditional retail broker.

What types and varieties of clients are you catering for?

From a regulatory perspective we can onboard both retail and professional clients and we do. Alpha itself however does not open any direct customers from its business development teams that are not professionals. We have a broad professional customer base, small to mid-size brokers/ dealers, banks, clearing brokers, and a large geographically diverse introducing broker and advisor network.

Alpha

What do your day to day responsibilities usually involve and focus around?

As CEO I am involved in all facets of Alpha’s business. I spend a large chunk of my time working with the business development teams and then work with two operational and trading heads to manage the day to day business of Alpha. I look at the overall structure of deals and their return to Alpha, high level compliance strategy and regulatory changes, and making sure that operationally we are keeping our focus on the clients.

Please tell us a little about your senior executive team and the key roles they each play within the firm?

My team is top notch. They are all proven at the highest level. Kurt Hoeksema has run Risk and Trading for the likes of GAIN Capital and GFT Markets. There is not a market condition that he has not gone through and navigated. We are extremely qualified on the trading, risk, and execution side. Roger Hambury and Scott Sandat run our business development team. Both Scott and Roger have spent their career managing and building relationships as well as making sure our product offering and services are aligned with our customers’ requirements globally. Tony Afram our Chairmen and single largest shareholder is highly focused on our expansion into the Middle East and our Dubai office is close to a relaunch based on that effort.

Our network in the industry is by far the largest. I am biased for sure but if you look at our people and their connections across FX, CFD, and Spread betting it’s second to none.

Des Grech rounds out the team as COO. Des, having worked primarily in business development over his career, is really making a difference. Having such an understanding of how business development would like to work with operations is really an asset to Alpha. He has a very unique method of making sure we are managing the business in a compliant, process driven manner but at the same time allowing us to be flexible to what our client needs are. Far too often you miss out on this with operational heads.

Kurt Hoeksema has run Risk and Trading for the likes of GAIN Capital and GFT Markets.
Kurt Hoeksema has run Risk and Trading for the likes of GAIN Capital and GFT Markets.

What makes ACM different from many other brokers and what do you see as the key strengths of the company?

We are very transparent. I am not trying to say that other companies tell you what you want to hear, but we are very up front and practical about what can and cannot be done. If partners are looking for an aggressive deal, but one that is sustainable based on what any market can really deliver, we are the right provider.

It’s a very direct approach with our customers and it works and has for over two decades. Our services are designed from day one for partners, if you look at our turnaround times on White Labels for example. At most firms this is an afterthought. At Alpha, our process is quick, lean and efficient, because this is all we do.

Des Grech makes sure we are managing the business in a compliant process driven manner
Des Grech makes sure we are managing the business in a compliant process driven manner

In what ways does your partner only business model help ACM to eliminate the common conflict of interests that are seen with many other firms that provide both retail and Institutional FX solutions?

One thing that is very clear is that we are not spending to attract our partners to us. We don’t do any direct retail marketing. Other shops are spending millions and millions to take the customer direct. It’s pretty simple. When you do that, are you always going to put your partner first? Who gets new products first? What about pricing? When you sell direct, partner compensation is considered additional overhead and baggage to the firm.

Inherently those firms are not going to be as competitive. From a technology perspective our R&D is 100% focused and directed by partner demand or products that are for the benefit of our partners. You will be lucky if you get a 50/50 at other firms where the conflict of interest exists.

What range of trading platforms does ACM offer?

We will plug into anything we see adding value to our partner network and that can pass our technology and security tests.

Currently we offer Meta, our Alpha Pro Multi-Asset system, Alpha DMA via Currenex GUI, and DMA equity and exchange traded futures via our AlphaPro DMA package.

All of our front ends fully support FX, CFD, and Spread betting. Even when you trade via our DMA platforms you need to specify which derivative you want to use. CFD or Spread Betting. It’s a fully automated solution that works perfectly for Prop shops, High-net-worth professionals, and funds.

With Alpha it’s all about relationships so each person has their own contact
With Alpha it’s all about relationships so each person has their own contact

Let’s talk a little more about some of your partnership services. How does ACM help Introducing Brokers to achieve more effective control of their relationships and better tailor products according to their own clients’ needs?

We don’t compete with them for a start. I know that may sound overly simplified, but this is a huge concern for introduction brokers globally. One that they have just had to accept for so many years. Flexibility is a foundational building block at Alpha, we are really trying to work with partners from the first call or meeting to find the right bespoke solution and it’s different for almost all partners.

Those needs also change over time. From the 1st year to year number 5 of our partner’s business. We are trying to look at that in the process and not just hurry up and sell them now to meet our next quarterly EPS target, but to create something that will keep us together long term and that is scalable.

Flexibility, this is a base that we try to keep in mind at all times. Each broker needs to have a conversation with us and describe what they want. We can make custom solutions to match what they need, and what they need in different markets.

We don’t have issues with bespoke solutions; that is what we do. Previously in my career and commonly at most firms you hear something to the effect of “sell what’s on the truck”. We don’t think like this, and our partners see that throughout the relationship.

Alpha

In this edition of e-Forex we are reporting on the powerful benefits of API’s in FX. How important have they become in helping ACM to connect and deliver its own suite of services?

At our core we are two things. Market Makers and Technologists. The way we approach technology, though, is by architecting solutions as opposed to coding innovation. This has to include API’s as a building block. We are constantly working to add features, speed, and redundancy to our API solutions.

What do professional traders especially like about the bespoke execution services that you provide?

We know what we are doing. That is the crux of it. They have the peace of mind that our expertise and technology will help them achieve the level and speed of execution they require across all asset classes, regardless of the size of the transaction. Derivatives and Equities are our speciality. We offer what we feel is the best equity/derivative liquidity available, including a number of enhancing features that we use as market makers around our OTC offering.

The industry is still talking about last years SNB event. What important lessons did it teach us and how have these helped to shape your own service offering?

I worked for GAIN Capital during the SNB. We were one of the only firms to prosper on that day. I happen to have been called in to the desk during the chaos and our desk in London made significant revenues. We were ahead of that black swan and that is what I learned. Don’t sit on your heels, think about the unexpected and make sure that process-wise your teams are ready for the unexpected. It was the team at GAIN that protected the Company and its partners. The desk that day, and the team that looked ahead into the future, didn’t get comfortable with the status quo beforehand. This is the way we run our business and that day illustrated why this is the right way to do business. We are experts at analyzing risk and changing the definition of what could be a risk to the firm.

Sophie Squillacioti is Managing Director for APAC region
Sophie Squillacioti is Managing Director for APAC region

You recently appointed Sophie Squillacioti as Managing Director for the Asia-Pacific (APAC) region. Why does ACM have a particular interest in the PRC market and what makes it such a good potential business growth region for you?

China is a massive IB market. Because of the size of China and the fact that it is a relationship-driven system still to this day makes it perfect for IB’s and as a result, Alpha. China is not a market you can just turn up to, open an office, and start generating business. Not a sustainable business for sure.

You need experienced staff present at all times. Sophie has been in the industry and has specialized in China since really the inception of the market in PRC. She has a top notch team around her and we are very proud of our organization being built there as a result.

Where will you be looking to further expand the operational footprint and product mix of the company to capture new business opportunities over the next few years?

Still too early to say in many ways as we are in the middle of the execution phase for existing projects, but I would think that there is some fun stuff coming for our partners in data analytics, cash equities, and speed and quality of execution regardless of asset class.

What’s the best way for firms who have an interest in partnering with ACM or learning more about the company to contact your teams?

With Alpha it’s all about relationships, so each partner has their own contact which is as simple as filling out a ead form on our site. We go through a process with our partners from the very beginning to figure out what they really need. Because of the conflict of interest with most firms it’s fun to try to break down the normal barriers between both firms. We operate best when we know the issues the firm is facing and what their ideal outcome is. At Alpha, we don’t care what the end solution is as long as it is a win win. I love this about our company and process.

Alpha

Finally, looking ahead, what’s your long term vision for ACM?

ACM Group will look to strengthen its product and technology offering based on the feedback and needs of its partner network whilst also looking to grow our revenues and stay lean in the process. Finally, we will look at potential M&A opportunities that make sense for our shareholders, and fit within our B2B strategy as we have spoken about through this interview. It’s very exciting as we are getting great traction now, and everyone is very excited about the future.

We are looking forward perhaps over the next 3 to 5 years. If there is anything I have learned being in this industry it is that you need to look forward, but you also cannot fool yourself into planning much past the next 3-5 years. Things change too fast. It is a waste of time and executive bandwidth. We keep it simple and try to be as nimble as possible to react to market demand, changing regulatory structures, etc.

Flexibility is a foundational building block at Alpha
Flexibility is a foundational building block at Alpha