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Until recently, it seemed that the big FX players in FX were happy to leave the retail sector to aggregators, perhaps taking comfort from the prospect that once these had built up a decent size position they would see the business anyway.
However, Deutsche Banks DBFX platform, formally announced on May 15, appears to herald a new phase.
Deutsches move has got tongues wagging about which bank will be next. Gossip suggests it will be UBS, which has been working with Cognotec, if rumours are to be believed, to build a front end for the retail sector.
However, according to Fabian Shey, global head of FX distribution at UBS, the rumours are off the mark. UBS is the largest private bank in the world and the private client segment has always been an important part of our business, he says. UBS is expanding further in this area and is hiring more private client advisers, who also look after them in FX. Private clients look at FX in three ways. As a product to invest in, as a means to hedge their overseas exposure and some are actively trading to generate real returns.
Shey says that the wealth of UBSs private client base ranges from relatively small to extremely large amounts. But even at the lower end of the range, a more apt description would be high net-worth individual than retail client. Direct access to the market for these clients has generally been over the phone. But recently an increasing proportion of private clients have been adopting FX Trader. Take-up has been good, says Shey.
He adds that the service is channel-agnostic: clients can enter positions electronically and exit them on the phone. He also confirms that UBS is upgrading its technology and that Cognotec is working with it. We are extending our electronic offering for private clients and the platform will be configured for them and include information on margins, risk and limit orders, he says. It has the same quote engine as UBS Trader and we have no plans to start a separate platform. We are extending our electronic business to include our private clients, upgrading our existing network and providing a multi-asset class platform.