Private Label vs. White Label

December 18, 2016

Setting up a brokerage business starts from the way the business is organized and this can be done in various ways. A new broker can be an Introducing Broker for a bigger one, or it can be a White or Private Label one.

There is a thin line between White Label and Private Label brokers, but nevertheless, there is a difference. When compared with the IB, a White Label is considered to be a step forward.


What Makes a White Label Broker?

Such a program addresses to companies or individuals, entities in general, that want to start a brokerage business on their own. A White Label broker agreement works in the following way:

  • – The prime broker handles everything regarding the overall infrastructure needed, like the trading platform, the back-office support, and even facilitates trading orders for clients.
  • – The White Label broker, on the other hand, has the freedom to set up its own dealing conditions and even to have a branded trading platform.
  • – The White Label broker is handling everything related to client support and the overall trading environment.

On top of the things mentioned above, a White Label brokerage house can be organized as a full or partial one. Under the first option, the brokerage house is setting its own commissions and handles client’s accounts, deposits, withdrawals, etc. The second option leaves the account management functions to the prime broker.


What is a Private Label Broker?

A full white label broker is considered to be a Private Label broker. Coming to the start of the article, the thin line consists of the fact that under this structure, accounts are managed by the newly created entity.

In general, such a broker can monitor client’s activity, etc., and all the reports that result from it. Between the Private Label and the Partial White Label, the first one is preferred most of the times.

In plain English, the ability to take deposits directly from the customers is what the main difference between the two. A partial White Label is easier to set up, while a Private Label takes more time.

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