How Prop Firms Are Transforming Brokers’ Client Acquisition, Growth, and Revenue
Understand how Prop Firms can be a strategic complement for brokers, offering new revenue streams and attracting qualified traders. Discover growth opportunities in the trading and cryptocurrency markets.
- 5-7 min
- Barbara Breda
Last Update: March 26th, 2025
Content
The Prop Market: A Strategic Opportunity for Brokers
The financial market has undergone significant transformations over recent years. Prop firms have emerged as one of the latest frontiers, representing a major advancement not only for traders but also for brokers. In this article, we will explore how prop firms can be a strategic complement to brokers for attracting interested audiences and driving new revenue streams.
The Trader's Path: Shifting Volume to Prop Firms
The rise in interest towards prop firms is impressive. Over the past decade, prop trading has experienced remarkable growth. From December 2015 to April 2024, the industry increased 1,264%, surpassing the 240% growth noticed on the traditional investing landscape.
The interest is even more pronounced in the cryptocurrency market. Searches for crypto trading in prop firms have skyrocketed from 83 in 2020 to 4,361 in 2024, a staggering increase of 5,156%.
Prop Firms Challenges
However, the prop market, like any industry exposed to economic volatility, faces challenges. It’s estimated that between 80 and 100 props closed their operations in 2024. Key factors include lack of effective financial organization, adaptability, and responsive technology.
Prop Firms' Results and Business Model
A proprietary trading firm is a company that offers its own capital for traders to operate in the financial markets, enabling a professional approach and a career in this market. Unlike traditional brokers, which require traders to use their own resources and assume the risk of trades, prop firms share the risks and split the profits with their traders.
Prop firms democratize access to the financial markets, allowing traders to operate with institutional capital, eliminating the entry barriers. At the same time, one of the main advantages of proprietary trading firms is the potential for significant profits. By trading in evaluation and simulated live environments, replicating real market conditions, traders are able to follow an educational path and break free from the limitations of their own capital.
On the other hand, in trading, a broker is a company that acts as an intermediary between the trader and the financial markets. Basically, they provide the platform and tools you need to buy and sell assets like stocks, forex, crypto, futures, etc.
What Does the Modern Trader Expect?
Today’s traders are seeking opportunities to build sustainable careers while aiming for short-term results in the financial market. The appreciation for clear rules, fast payouts, and access to advanced technology are central factors. Additionally, the growing number of props on the market allows traders to access more sources of information to ensure the safety of their operations (and expected withdrawals).
The prop trading environment is highly competitive. Many aspiring traders fail to pass challenges or evaluations, and even those who succeed must study extensively to maintain profitability in the long run.
- Challenge Success Rates: approximately 5% to 10% of traders are able to pass the initial prop firm challenges.
- Profit Achievement: of the ones who succeed, only 7% of 300,000 prop trading accounts achieved payouts.
- Financial Investment: On average, traders invest around $4,270 in challenge fees before attaining profitability, highlighting the financial commitment required.
These figures emphasize the necessity for thorough preparation and the cultivation of realistic expectations. Developing a robust trading strategy, maintaining disciplined risk management, and continuous learning are crucial for those aiming to navigate the complexities of prop trading successfully.
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How Do Prop Firms Fit Into the Brokerage World? More Revenue and More Leads
Prop firms brings brokers an unique opportunity, not only to meet the demands of modern traders by establishing their very own prop firm, but mostly to develop a comprehensive portfolio – this is what we call Brokers 2.0.
Key Advantages
- Leveraging Existing Infrastructure: Brokers can utilize their existing operational infrastructure – people and financial constitution -, which already has market knowledge, contributing to the successful launch of an efficient prop firm.
- Reputation and Trust: Research indicates that 60% of clients consider prop firms linked to brokers to be more trustworthy, which significantly impacts the attraction and retention of traders – and, of course, leads.
- Revenue Diversification: By offering prop trading, brokers can diversify their revenue streams, reducing their reliance on traditional A and B book models and some of the barriers associated with the standard brokerage market.
What Should Brokers Focus On?
To implement this strategy successfully, brokers must focus on the following:
- Development of Transparent Evaluation Programs: Establishing clear, well-structured criteria supports the approval of qualified traders. To know more about evaluation programs and how to structure a good one access our blog .
- Offering Continuous Support and Education: Providing educational resources and continuous support helps traders develop their skills and achieve long-term profitability.
- Implementing Advanced Technologies: Nowadays, the tech environment dedicated to prop firms brings a whole different level of complexity and infrastructure. Real-time data analytics; instant alerts; advanced analytics tools with market insights as historical data, market events and behavior; AI for trend forecasting; fraud detection and risk management; third-party integrations; and user-centric solutions are a few examples of technological innovations that can optimize operations and enhance trader experience.
Real-Life Examples and Noteworthy Results
Several brokers have already integrated prop firms into their portfolios, transforming what was once a niche into a strategic opportunity. A notable example is Hantec Markets, which launched Hantec Trader in December 2023. This initiative helped attract traders looking to trade with leveraged capital and institutional support, strengthening their client base and diversifying their revenue streams.
Another key example is ATFX, which offers a simulated trading environment to prepare traders before committing real capital. This innovative approach not only improves the trader’s experience but also reduces operational risks, creating a more sustainable ecosystem.
Additionally, other well-known brokers, such as Axi and IC Markets, have launched their own prop firms. These initiatives highlight an increasing trend within the sector, where traditional brokers recognize the value of prop firms as a strategic extension of their services, attracting a broader and more engaged client base and solidifying their competitive position in the evolving financial market.
A Milestone in the Sector: The Acquisition of OANDA by FTMO
One of the most headline-grabbing events in 2025 was the acquisition of OANDA by FTMO. FTMO, a prestigious prop firm, announced in February that it had purchased OANDA Global Corporation, a renowned retail broker. This strategic acquisition aims to operate OANDA as an independent entity, leveraging its established infrastructure to expand FTMO’s prop trading operations.
The multimillion-dollar deal highlighted the financial power that well-structured prop firms possess and indicates that even successful, independent prop firms recognize the importance of a broker – with its enduring presence and market representation. This strategy is a departure from the norm, allowing prop firms to diversify their offerings and strengthen their competitive position in the market.
Conclusion
Integrating proprietary trading operations offers brokers a strategic advantage in enhancing client acquisition, diversifying revenue streams, and solidifying market presence. Establishing their own prop firms enables brokers to:
- Leverage Existing Client Bases: Brokers can introduce prop trading services to current clients, reducing client acquisition costs.
- Enhance Reputation and Trust: nearly 60% of prop traders believe broker-backed firms offer better risk management and infrastructure, contributing to increased trust and client retention.
- Diversify Revenue Streams: offering prop trading allows brokers to move beyond traditional brokerage models, tapping into new sources of income and reducing reliance on conventional trading commissions.
- Profit Achievement: only 7% of 300,000 prop trading accounts achieved payouts, with the average payout being 4% of the account size.
- Financial Investment: on average, traders invest around $4,270 in challenge fees before attaining profitability, highlighting the financial commitment required.
These statistics underscore the potential of prop firms to attract traders, while also highlighting the competitive and challenging nature of the prop trading landscape.