⭐Forex Brokers Marketing and Legal Documents Mismatch

Aggressive competition among Forex Brokers (which, let's acknowledge, is present at all times), gave birth to an aggressive marketing phenomenon, where at some point, marketing claims are clearly contradicting Broker's own legal documents, such as Client Agreement, Execution Policies and other.

Marketing Success Phenomenon

One of the hidden reasons why these marketing strategies succeed is that Forex Traders seldom (almost never) read Client Agreements.

A well-designed website combined with strong keywords - "ECN", "Institutional Liquidity", "Interbank Dealing", "Direct Market Access", "Straight-Though Processing", "No Dealer Intervention", "No Requotes", "Razor Sharp Raw Spreads from 0.0 Pips" - is sufficient for 90% of retail Forex traders (especially novice traders) to make a decision when choosing a Forex Broker.

Another hidden reason is that many Forex Brokers nowadays have their businesses registered offshore. It is very easy for an offshore Company (twice as easy for an unregulated offshore company) to market itself any way they want. Having no strict supervision allows for any marketing claims and tactics.

Marketing vs Reality

It is, unfortunately, quite common these days to see instances of marketing claims contradicting legal documents.

EXAMPLE:

A website could market a Forex Broker as as "True ECN/STP" and "100% ECN/STP Execution (A-book)", and say that they connect clients to liquidity providers with no conflict of interests.
While at the same time, the Client Agreement will state that the Company may act as a Market maker and a Principal Counterparty, and is a sole Execution Venue for all Client's trades.

Truth is, when there is a conflict of statements, the Agreement is the stronger evidence of the Broker dealing model.

After all, any documents you sign remain available and on hands to serve as proof of conditions that both parties agreed to, while the website may be redesigned with all claims and statements changed at any time.

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