Forex Grey Label Solution is one of the low-cost solutions for people who want to start own forex brokerage business.
Most of them are either not too sure of the success of their start-up forex brokerage business or running short of funds or maybe both! So they want to test their business plan at a low investment which we must say is a sound strategy
Grey Label Forex Solutions are also called co-branded fx brokerage solutions and are usually offered by Forex White Label license holders.
Technically the Forex Grey Label Solution is an Introducing Brokers accounts that use the brand of a Forex White Label only. Grey Label Forex Brokers operate under the umbrella of a White Label Broker and use their brand.
A grey label forex broker may use their own brand as well on their brokerage website, broker CRM, and traders room but the trading terminal will have the logo and brand of the original MT4 or MT5 White Label broker.
MT4 & MT5 Grey Label Solutions
MT4 being the oldest forex trading platform and due to its vast reach, MT4 Grey Label is the most popular grey label forex solution in the forex market.
In fact, MT4 & MT5 Grey Label Solutions are the most popular Forex Grey Label Solutions out there. Actually, they are the only Grey Label solution because MT4 & MT5 White Label charges are a little too expensive for many small Introducing Brokers who want to start their own forex brokerage business.
MetaTrader 4 grey label manager is given by an MT4 White Label broker and similarly, MT5 Grey Label Manager is given by an MT4 White Label broker.
They may ask for your business plan to check whether you are really capable of making it. After all, you get to use their brand and get the benefits of the marketing efforts made by them. Your success is their success too!
Other White Label solutions like cTrader, Match Traders, etc. are priced at the levels of MT4 or MT5 Grey Labels only. So you will hardly find anyone selling grey label solutions from these platforms.
Forex GREY Label Solution Cost
Hope you know that an MT4 or MT5 White Label can cost USD 3000-5000 in setup fee and USD 3000 as monthly charges.
MT4 or MT5 Grey Label Solutions that comes with just the MT4/MT5 Manager can cost you as low as USD 800 per month that too without any setup fee!
A turnkey MT4 / MT5 Grey Solution can cost you Set up fee of USD 500 & monthly charges of USD 1500.
A turnkey Grey Label Forex Solution usually comes with similar brokerage software and tools that come with a Forex White Label Brokerage solution like Broker CRM, Traders Room, Affiliate Module, PAMM, MAMM Software, Payment Gateway, Liquidity Providers, Forex Website, etc.
Now you see the difference in cost between a forex white label solution and a grey label forex solution!
The lower cost makes it very lucrative for a successful Introducing Broker aka IB to take the leap and start small with MT4 or MT5 Grey Label solution. this helps them to check the waters and see if they can really get the scale needed for a fully branded Forex White Label Brokerage.
Legality of Grey Label Brokerage
A very important disclaimer here is that we are not legal experts and cannot advise you on the legality of a Grey Label Forex Brokerage Business.
What we do know is MetaQuotes has developed MT4 & MT5 Trading Platforms and doesn’t like its White Label Brokers giving MT4 or MT5 Grey Label Solutions.
They have very valid concerns which are listed below:
When you buy MT4 or MT5 White Label Solution, a KYC is done with MetaQuotes. They know who is taking the license and legal standing of the key person along with the business.
In the case of the Grey Label Forex License which is given by a White Label Broker as IB, no KYC is done with MetaQuotes. And at times White Label Brokers too don’t do extensive KYC of people taking Grey Label Forex Solution from them.
This puts the reputation of both white label brokerage and MetaQuotes at stake. Since brands of MetaQuotes and White Label Broker are exposed, any wrongdoing or scam done by Grey Label Forex Broker can severely affect their brand equity.
Trust us, we have seen it happening more often than you can imagine and the reason is simple; the cost of Forex Grey Label Solution is too low that anyone can try it and they use someone else’s brand so nothing much is at their stake.
2. Revenue Loss
When someone takes MT4 or MT5 Grey Label solution from a White Label Broker, MetaQuotes get nothing and that’s a significant revenue loss for them. It’s as simple as that.
They get fixed monthly charges of USD 3000 from every MT4/MT5 White Label brokers. Why would they like to lose a prospective client that they could have earned money?
If a Forex Grey Label Brokerage business fails, it will take a couple of thousands of US dollars and you know it didn’t work. You can go back to marketing the big Forex Brokerage business or move on with something different.
After all start-up businesses have a similar probability of success and failure as any other business venture.
If you succeed with a Forex Grey Label Brokerage, you are now set for the big leap. You know your market, your clients, the dynamics of brokerage operations, and a tried and tested revenue model.
Do check with your grey label forex solution provider what kind of manager and admin accesses you will get. You may want to get the turnkey forex grey label solution that includes the manager access, broker CRM, traders room, website, IB & Affiliate module, A Book, B Book C Book, payment solution etc
Run the brokerage at a small scale for a couple of months, save the money, and when you feel confident about the sustained business from existing clients and new clients acquisition, take the big leap and go with a fully branded Forex White Label Solution like MT4/MT5 White Label, cTrader White Label, etc.
DISCLAIMER: Before going with a Forex Grey Label Solution like MT4 or MT5 Grey Label, you must consult your legal advisor to understand the legal implications so that you understand the legality of such a business venture especially in the region you operate your business in.
MetaQuotes do not allow Grey Label Licenses and if found will be canceled straight away with no further hearing from the White Label serving Grey Label licenses.
Wish you all the best.