Forex Broker Reviews sites operated by Affiliates enjoy high standing, but have flaws.
There is absolutely nothing wrong with being an affiliate for a Forex Broker. It is still a lucrative business when done properly, but the purpose Forex Broker Reviews and Cash Back sites (also known as Rebates sites) serve has not helped traders. They have ginned up business for Forex Brokers, but they have not addressed the churn-and-burn that is common in the industry. The value that these sorts of businesses provide is diminishing in a marketplace that is starting to demand more. It is important to understand where these Forex Broker Affiliates come up short.
The Forex Broker Reviews Sites have Conflicts of Interest
It's important to understand that Forex Broker Reviews and Cash Back sites earn money. There are three ways that these sites earn revenue to stay afloat and for their own sake, profitable.
- Cost per Lead: The Forex Brokers would pay their Affiliates for providing them with the contact information of a potential client. It is typically qualified by the lead's action of signing up for a Demo Account. It is a flat one-time payment.
- Cost per Acquisition: Each country has a different flat payment for the Affiliate. More developed countries result in greater payments for the Affiliate. The payment for the client sign-up is a one-time occurrence, which means that a client who deposits $50,000 and a client who deposits $5,000 gets treated the same in this scheme. It results in a substantially larger amount paid than the Cost per Lead
- Revenue Share: This is how Introducing Brokers are compensated. The Affiliates/Introducers are paid based on trading volume. The greater the trading volume, the greater the revenues generated.
It is easy to see how the payment structure will impact the business models of the particular sites. Cost per Acquisition and Cost per Lead sites have zero interest in anything other than getting a prospect to fill out a form. Introducing Brokers also take this approach, but will offer cash back in roundabout ways. Some Introducing Brokers offer education, but it is no different from anything else that is out there.
Each Forex Broker offers a different amount to their Affiliates and Introducing Brokers. Many of the Forex Broker Reviews and Rebates sites will include as many brokers that they can, but they will feature some brokers over others. Why? The payouts. The greater the payout, the more of an incentive to sell the particular broker's services.
This creates an obvious Conflict of Interest. The right broker for the reader may not necessarily align with the goals of the Forex Broker Review site. The site really does not care about the prospective client, they just want their money. Reviews may be inflated to promote particular brokers.
Forex Brokers Cash Back Sites are in a race to the bottom.
Forex Broker Reviews sites that offer Cash Back use their reviews for three key purposes:
- Search Engine Optimization (SEO): Generating organic traffic to the site so that they can lower their own Cost per Acquisition. More content for a profitable set of keywords brings potential clients in the door. Using Rich Snippets like Review ratings improves Google Search rank.
- Promote the Forex Brokers that will pay the most.
- Create the illusion that the difference between a profitable trader and an unprofitable trader is the broker.
There is competition in this space and since the Forex Affiliates want to passively earn revenue, the involvement and attention toward clients is not there. How do these sites differentiate themselves?
Offering the most Cash Back in the rebates.
There is nothing wrong with issuing cash distributions, but this is the only benefit that the Forex Broker Rebate sites provide. The marketplace devolves into a race to the bottom as far as how much each site provider wishes to share with the clients. There is nothing unique that they can provide to the table, they are counting on the potential client trusting that the Forex Rebate provider gives them their rebates and that the potential client believes that this is the best deal they can get.
It is short-sighted from the perspective of the potential client to choose solely based on a rebate and it contributes to the failings of Retail Forex industry when it comes to Forex Trader profitability.
The methods of receiving the cash back are not as direct as one would think. For some brokers, the Introducing Broker is able to send the money directly into a client's primary trading account. For other brokers, the Introducing Broker is going to have to find a creative way to send the money without incurring fees. This important note is not explained well by these Forex Rebate sites.
Forex Trading Educational Articles as the Value
Educational materials are a passive way to show any sort of interest in the well-being of the client and prospective client. It is a hands-off approach that shows basics of trading, but nothing more. On some sites, there are "spun" articles that plagiarize other sites (including this one!) in an incoherent fashion. The educational materials are thankfully free of charge, but there are people who would pay a course provider for this same information. The problem is that so many traders learn the same material and yet 76.63% of traders still are unprofitable.
These educational materials serve the purpose of providing a perceived value and help with bringing traffic to these sites. An important point is missed in these efforts.
Forex Trading is about Pride
Pride is definitely on the line when trading in the Forex Market. Being "right" is what matters most and many want to enter the market without needing any help. They want to enter their own trades and feel like they are in control, but they ultimately treat the World's Largest Market by Trading Volume like it is a casino. Forex Trading is not for people with big egos and it is not for people who are greedy. However, it attracts the desperate and prideful.
The passive approach from Forex Broker Reviews and Rebates sites prevents them from:
- Being exposed for being too involved.
- Having resources tied up.
- Dealing with egos.
These businesses operate in volume and provide a mass-market solution. Your profitability is not their concern. Communications are non-existent, just fill out a form. 3 out of 4 will lose money, actually that figure may be worse considering the brokers that you are pushed towards.