LeapRate Exclusive… LeapRate has learned that FCA regulated FX broker solutions provider Finotec Trading UK Limited has posted a loss in its latest financial year of 2017, amidst what seems to be a second major shift in strategy at Finotec in as many years.
The previous year (2016), Finotec indicated that it was busy building a full brokerage suite of products and services to be able to offer a one-stop-shop solution to new Retail and Prime-of-Prime brokers.
However this time around Finotec stated that its aim is now to turn the focus of the company from a mostly brokerage services operation into an investment services firm, focusing on Managed Accounts. Finotec stated that over the next 18 months its target is to increase Assets Under Management to $50 million. To get there, Finotec stated that it signed a distribution agreement with an Israeli research, risk management and technology company called Yedidya Capital Markets Limited – Yedidya has developed what Finotec called an exclusive trading algorithm. (What Finotec didn’t directly disclose is that Yedidya is a company owned by Finotec’s CEO and controlling shareholder Didier Essemini).
Interestingly, Finotec’s website (at finotec.com) still makes no mention of managed accounts. As per the 2016 strategy change noted, it still shows “Professional Brokerage Services” namely liquidity, trading name, and risk management.
Back to the numbers….
In 2017 Finotec Revenue came in at £1.57 million (USD $2.0 million), up 24% from £1.26 million in 2016. However Finotec also reported a net loss of £16,879, as compared to a £211,284 net profit in 2016.
Finotec cleared $27 billion of client transactions in 2017 ($2.25 billion monthly volumes).
Regarding its shift to asset management, Finotec stated that since going live in May 2018 it has raised over $2.2 million, and is expecting AUM to hit $5 million by year-end 2018, ahead of its goal (as noted above) to hit AUM of $50 million by the end of 2019.
The minimum entry into Finotec’s managed accounts business has been set at $100,000, with clients paying Finotec an execution fee of $15 per million.
Finotec’s 2017 income statement follows:
