Q Thanks for the time Michael. How has the year finished at Scandinavian Capital Markets?
This year was fantastic. We took the opportunity to expand our market presence and introduce ourselves to the global Foreign Exchange marketplace.
I would say we're most proud of the Valhalla Initiative. That was a big hit with our clients and helped expose them to who we are and immerse them in our values. We hosted industry leaders from 8 countries in Stockholm, ranging from educators to traders. It offered us a chance to reshape the view of the industry.
We also had an opportunity to host a Thought Leadership Conference in London back in May. This brought together leaders in the industry in a constructive atmosphere to bring about real change. That was followed up on November with conference in Johannesburg: Bringing Scandanavian Values to your business. It's pretty amazing to see the company expand globally.
Q So what exactly is the Valhalla Initiative?
Let me start by explaining how we came up with the idea. The Foreign Exchange marketplace has been plagued for years by bad actors that obliterated trust in the industry. While many of them no longer exist, there still exists a healthy skepticism of the industry.
That's what we will change. Our Valhalla Initiative emerges from the Swedish culture – trust, transparency, and safety. It plays off the popular Nordic Mythology, where we open ourselves to poking and prodding. We're not afraid to lay it all out there. We're confident in who we are and what we stand for.
We invite clients on a partially or wholly subsidized trip to our headquarters in Stockholm. They get an opportunity to meet our team, some wining and dining, as well as the culture the city has to offer.
For us, it allows us to expand our relationships by having frank conversations in an open setting. Sometimes you just need the face-to-face interaction on top of online correspondence to really find out what bugs people so you can fix it.
Q You've mentioned the aspects of trust and transparency before. It seems like that's something personal for you.
Very much so. My journey to where I'm at today was a rocky one. Initially, I came out of my MBA from the University of Windsor. During that time, I was a financial advisor through a co-op. I stayed on afterward and followed one individual in particular who had a large book.
During the Great Recession, I watched this person single-handedly destroy wealth for his clients due to negligence and, frankly, arrogance. He was doing his work for the commissions, not the clients.
That was my first, but not my last exposure to the dark side of the business. My second major venture came with an international partner who I worked with for several years alongside a fraternity brother of mine. Within a short time, my friend forgot to hedge his traders, lost almost $200,000, and up and quit the business.
At the time, I was running the brokerage side. I slid into a technology role, putting together all the backend framework. I got to see how good trades worked during that job. Most of the money was made through transactional processing. However, my partner decided to basically take the money and run, which left me with squat.
So, after years of seeing the bad side and really wanting a change, I take my responsibility to our core values very seriously.
Q That's a pretty tough ordeal to go through over the years. So how did things develop into the Scandinavian Capital Markets we know today?
I actually was trading for myself over one summer when I met my partner Arif. We connected through Linkedln initially. At the same time, I went to work for a tech company selling an app for car insurance. Getting kicked out of car dealerships actually taught me a lot about sales. I also worked various other odd jobs.
Yet, I knew my passion was building a company with Arif. We would talk every morning for nearly seven months about how to create our own brokerage. Finally, we took the leap.
Our endeavor actually started with just one client. We owe a lot to them for enabling us to develop white-label technology and build our business. Between Arif's contacts within wealth management and mine with experienced traders... it was a synergy that worked perfectly.
It's amazing how by doing what you say and working for the client – that it's almost unheard of today, and something people place tremendous value in. It's like being a decent person is a unicorn. Even with our growth, we always adhere to our core principals.
Our entire business may be the last Straight Through Processor (STP) in existence at this point. And yet, we've found it so much more rewarding to build relationships and wealth for our clients as partners rather than treating them as adversaries. It's like everyone chose to ignore the basic business literature published over the last 5o years.
Q Why do you think a lot of brokers treat their clients as their adversaries rather than their partners?
I think a lot of it comes down to the nature of the business. Brokers fall into two types: A and B book. A book is what we do. We pass along the orders to the banks, where the financial institutions act as the counterparty. It removes any agent-principal hazards between the clients and us.
B books act as the counterparty to the clients themselves. In the short-term, this does tend to lead to more money. Most of these brokers assume the clients are uneducated or garbage traders. They find it better to make money off the clients themselves rather than the relationships.
The problem with that is one wrong move can end a firm. There's been numerous stories (and I've seen it happen) where brokers can't cover the trade. So, they come up with some excuse to get out of it with the client the worse for it. In some cases, they just disappear through bankruptcy or other ways in less regulated markets.
That's why we highlight our responsibility and focus on our customers as partners. We hold ourselves to the same standards as we would want to be treated. Neither Arif, myself, nor anyone that works for us wants to make a quick buck and skip town. We're in this for the long-haul – we want to leave a legacy behind.
Q As we start the new decade, what can we look forward to from Scandinavian Capital Markets?
I'm personally excited about rolling out our cTrader platform to our customers. It's a fantastic technology, delivering functionality for trading, reporting, and easy FIX API connectivity that is unparalleled at the moment. That was a key ask from our traders and a major deliverable. We cannot deliver value to our clients without staying on top of the latest advancements.
We're also looking forward to expanding our Valhalla Initiative to another 12 Forex leaders, educators, and businesses from March to May. Most people enjoy traveling in the spring, and it's really scenic in Stockholm during that time of year. It's also time for our annual checkup to refocus on our values.
I realize that I talk a lot about that, but it's incredibly important to myself and who we are. When you take these for granted, you make the same mistakes as the ones who ruined our industry. I'm not about to let that happen.
The interview was first published in Game Changers Journal.