New Year’s Eve in Sydney is a once-in-a-lifetime, bucket-list experience.
The benefits of geography have not only smiled on the city in the form of pristine beaches and a beautiful natural harbour from which to ring in the new year, but Sydney’s location with respect to time-zones have blessed the city with the advantage that it is the first major global city to see the clock tick over to the new day. Sydney leads the vanguard into the new year; the first to taste the freedom of a new start, the first to test the possibilities of new opportunities. The fireworks over the harbour are spectacular, blasting the cobwebs of the previous year and propelling the mood of millions of Sydneysiders (and just as many tourists). It is an invigorating place to be.
A place for optimistic, energetic, irreverent entrepreneurs. A place that breeds Game Changers.
It is in this environment, the clean, fresh, bright and stirringly optimistic environment of Sydney in the first week of January, that I had the pleasure of visiting one of the most inspiring firms in the industry. Invast Global, led by CEO Gavin White, has quietly but confidently forged a place as one of the most innovative and sophisticated institutional brokerages in the world. I visited their offices, set high above the glorious Sydney Harbour, to look behind the scenes – partly to see if I can deduce the secret of their success, but also partly to get a sneak peak of the plans they have for 2018.
I left feeling more invigorated about the future of the industry than ever before.
The atmosphere in the office reveals the success the firm is experiencing. Staff, who are all shareholders according to White, buzz around with determined, professional forcefulness. There’s a happy, collegial vibe – emphasised by the open “Wintergarden” staff area with the best views of the harbour.
The area i is filled with overstuffed leather Chesterfields, a huge staff dining table and a suspiciously well-used AC/DC pinball machine. White explains how the machine has become a favourite of visiting clients. It must certainly be one of the best views in the world to enjoy when playing pinball.
It is a very different vibe to that within the Tier 1 investment Banks where White says most of the Invast Global team has spent their early careers. From this office, teams of ex-Citi, ex-UBS, ex-DB staff criss-cross the globe servicing a myriad of small/medium hedge funds, asset managers, retail brokerages and HFT firms.
Invast Global surely seems to be tapping into a sea-change in the industry. The company has experienced extraordinary growth in client numbers and revenues in the past four years. In contrast, traditional institutional brokers are reporting a much different story. In their first Investor Day presentation in almost a decade, Citi surprised the audience with a graphic showing the extent of the cuts in the Investment Bank’s institutional client base. A 57% culling of Institutional clients between 2012 and 2016 certainly paints the picture.
Of course, Citi isn’t the only one.
Goldman Sachs has reported a massive reduction in their Equities trading teams, Deutsche Bank announced in February this year that close to 20% of Equities staff globally would be let go. Barclays, Credit Suisse and RBS have all been downsizing in recent months.
In such an environment, it is no wonder small to medium brokerages and fund managers are looking for alternatives.
“We have put ourselves in the right place, at the right time, with the right products. But we are not finished yet and in fact, it is our view that 2018 is presenting the biggest opportunity so far”
Speaking with Nick Briscoe and Wendy Tao, members of the Invast Global Prime Services team reveals a consistent mood of exuberance about the future. These guys think they are onto something big. “We believe the online trading industry is about to be forced through a period of maturation” explains Head of Prime Services, Nicholas Briscoe. “the confluence of a couple of different factors will force online brokers to evolve their offering, to broaden their asset class coverage and to step further toward the “investment” spectrum and away from the speculative end of the industry”.
“That’s the real game” agrees Tao. It’s an interesting take. Most of the industry seems to be mesmerised by the buzz around cryptocurrencies, but Invast Global is on a different trajectory. Having seen the way they operate, it would be a brave person to claim they have it wrong.
“We’re certainly happy to facilitate Crypto trading” clarifies Tao “but we do think the industry is being distracted from a much bigger story – and an opportunity to build a more secure, legitimate and regulator-friendly brokerage model”.
Retail FX brokers have certainly been feeling the pinch in recent times. Regulators across the globe have been making moves (or at least discussing plans to) severely restrict leverage available to retail traders.
“In some ways, in such an environment, it is understandable that retail brokers have jumped on the Crypto craze bandwagon. But in the end, we feel it is best to be taking the long view and preparing your brokerage to be in a position to win in a tight regulatory environment” says Briscoe.
“We believe a winning position for retail brokerages is to move further along the spectrum toward legitimacy, providing clients with access and tools with which they can be more sophisticated about the way they invest, as opposed to speculate – across geographies, across asset classes, utilising specialised automated tools and technology to achieve the best outcomes for their clients.
“Providing that capability to our retail brokerage clients, so that they can offer a multi-asset, sophisticated service to their clients is what we are focusing on at Invast Global” concludes Briscoe.
In following this plan, Tao explains that the take-up of MT5 has been crucial. The latest-generation MetaQuotes platform allows for a virtually unlimited number of instruments, but more importantly, it is capable of supporting exchange connectivity and pricing – and is sensitive to the myriad exchange rules in each of the various jurisdictions. “It is a real breakthrough. It opens up a huge range of opportunities for retail brokers to evolve their service into a more sophisticated and regulator-friendly business. We believe this is what the industry should be focusing on in 2018 and beyond. It’s a sea-change and one existing brokerages would be well advised to be alert to”.
The beauty for Invast Global is that so many of their staff have spent their careers providing exchange access for their clients. “The core team here pioneered Direct-Market-Access single stock CFDs over a decade ago.” says Briscoe. “We have been offering a DMA single-stock and futures offering to our clients at Invast Global for almost 4 years. The product is very well developed and provides pricing and execution to 30 equities and futures exchanges globally. We have the Prime Broker in place already and the agreements to allow us to redistribute live pricing. We are now about to launch this product suite into MT5 for our retail broker clients around the world – backed by the execution and connectivity resources of Deutsche Bank”.
As gamechangers go, this is hard to beat.
Interview with Nick Briscoe and Wendy Tao of Invast Global | https://www.invast.au