Retail brokers face a critical retention challenge in the first 90 days after a client's initial deposit, according to industry executives Brian Myers, CEO of VCG Markets, and Milica Nikolic, Trading Product Operations Team Leader at Exness. New traders experience an early collision between expectations and results, discovering that trading is difficult and that leverage accelerates both gains and losses. Data published by the Australian Securities and Investments Commission showed that 68% of Australian retail CFD investors lost money during the 2024 financial year, with combined losses exceeding A$458 million including A$73 million in fees. Myers identifies the core problem as traders failing to understand why they lost or seeing evidence that their decision-making is improving, while Nikolic emphasizes that execution, pricing, platform stability and payment experience form the foundation required to maintain trust. The retention problem centers on building a trading experience that gives suitable clients a credible reason to continue, rather than simply persuading them to trade for longer.
Early Losses End Client Relationships Before Development
Research from economists at the US Commodity Futures Trading Commission studied retail activity in futures markets and found that participants typically appeared for only a limited number of trades. The median participant completed four trading events, each lasting approximately four days. A larger loss on the first trade was significantly associated with leaving the market permanently.
Brian Myers said the principal problem is not simply that traders lose, but that many do not understand why they lost or see evidence that their decision-making is improving. "They don't improve. Traders come in with energy and curiosity and within 90 days they've had enough losing experiences that they don't understand, and they walk away. Not because the market beat them, markets are always moving, but because nobody helped them understand what they did wrong," Myers stated.
A conventional trading platform records the position, executes it and displays the financial result. It does not necessarily explain that the trader increased position size after a loss, repeatedly entered late into price movements, removed a stop loss or abandoned an established strategy during a volatile session. Myers argues that this is a product problem rather than a conventional retention problem. "The platform took their trade, processed it, and moved on. No feedback, no context, no coaching. That's not retention failure, that's a product failure," he said.
Execution and Pricing Form Retention Foundation
Milica Nikolic said retail clients rarely stop because financial markets themselves have become uninteresting. "In my experience, traders rarely become inactive because the markets stop being interesting. It's because of their trading experience with the markets, as well as the platform. From the platform side, if execution, pricing, stability, and withdrawals create friction early in the relationship, confidence weakens quickly," Nikolic stated.
The first withdrawal is particularly important because it tests a different side of the broker-client relationship. Deposits and trading activity create revenue opportunities for the broker, while a withdrawal requires the company to demonstrate that funds remain accessible when the client chooses to leave or reduce exposure. A slow or poorly explained process can undermine confidence even when the payment is ultimately completed.
Nikolic said retention should be understood as an outcome of operational trust rather than a target that one department can pursue independently. "Retention is a byproduct of trust, not a metric to chase on its own. For us, trust is operational. It's built through consistent execution, high quality trading conditions, reliable access to funds, and a platform that behaves as expected, even when markets are volatile," she stated.
ASIC Review Led to A$40 Million in Refunds
ASIC's review of 52 licensed CFD issuers led to nearly A$40 million in refunds for more than 38,000 investors. The regulator said 42 issuers introduced or improved systems used to monitor trading behaviour and investor outcomes, while 44 strengthened their onboarding questionnaires. Thirty-nine issuers amended their target market determinations.
These interventions show why brokers cannot define successful retention solely as keeping an account trading. A client should remain active because the service continues to meet an identifiable need and the trader understands the risks, not because product design or account management encourages increasingly unsuitable exposure.
AI Connects Education to Individual Trading History
Behavioural technology allows the educational intervention to be connected to an individual trading history. Instead of publishing another article about revenge trading, the platform can identify that a client tends to increase size following a loss. Instead of explaining overtrading in general terms, it can show that the client's results deteriorate after a certain number of trades in one session.
Myers said AI can provide feedback that previously depended on years of experience or access to a professional coach. "If you have an AI trading copilot like VCG ONE sitting inside your platform, every trader has access to the kind of feedback that used to take years of experience to develop," he stated.
VCG ONE analyses trading behaviour across areas including discipline, risk control, consistency and execution quality. VCG Markets states that users demonstrate a 40% improvement in stop-loss discipline within 30 days of receiving their first report and 30% fewer impulsive entries. The company also reports an 8% higher win rate among active VCG ONE users.
Myers said recognition is the point at which the intervention becomes valuable. "When you give a trader a genuine insight into their own behaviour, why they keep removing stop losses, why they overtrade after a loss, and they recognise themselves in it, something changes," he stated.
Personalization Creates Ethical Divide in Broker Practices
Brokers already segment clients by jurisdiction, deposit value, instrument preference, activity and acquisition source. AI can take personalisation much further by analysing how individual clients react to losses, volatility, margin pressure and different trading sessions.
Myers said the future competitive advantage will be understanding clients in a coaching context rather than a surveillance context. "The brokers that win this decade will be the ones whose platform can look at a trader's history and say something genuinely useful about how they operate. Not generic market commentary. Something specific to that trader, that session, that pattern," he stated.
Making that distinction credible will require governance. Brokers need to determine what data the model can use, how long behavioural profiles are retained, whether marketing teams can access vulnerability indicators and when automated prompts should be suspended.
Customer Support and Payments Outweigh Platform Novelty
Myers identified continuous support, payments and the removal of friction across the client journey as areas that have produced a measurable effect. "Understanding the entire client journey and relentlessly making it our mission to simplify any pain points. Making sure we are always there, round the clock customer service and payments are examples of this," he stated.
A broker may have advanced analytics while still losing clients because verification is repeatedly requested, payment statuses are unclear or support agents cannot explain an execution outcome. The client does not separate these functions into internal departments. Every interaction contributes to one judgement about the broker.
Nikolic said the next competitive advantage will be making reliability visible through ordinary use rather than relying on marketing claims. "Looking ahead, the brokers that will retain active traders are the ones that will make reliability visible in the everyday trading experience, not just in marketing claims," she stated.
Brokers Require Metrics Beyond Active Accounts
Active accounts and trading volume remain commercially important, but they do not reveal whether a client relationship is becoming more sustainable. Relevant indicators include withdrawal completion times, unresolved support cases, platform failure rates, concentration of losses, changes in position size following losses, stop-loss usage and the proportion of clients returning after their first losing period.
Cohort analysis is particularly important. Clients acquired through an affiliate campaign may behave differently from those arriving through education, organic search or referrals. A campaign that produces large initial deposits can look successful until its clients are found to trade briefly, withdraw less and generate a higher complaint rate.
Brokers should also separate healthy inactivity from churn. A client who chooses not to trade during unsuitable market conditions may be demonstrating greater discipline. Treating every inactive day as a failure can lead to excessive communication and incentives that encourage poor decisions.
FAQ
What percentage of Australian retail CFD investors lost money during the 2024 financial year?
Data published by the Australian Securities and Investments Commission showed that 68% of Australian retail CFD investors lost money during the 2024 financial year, with combined losses exceeding A$458 million including A$73 million in fees.
What did ASIC's review of CFD issuers result in?
ASIC's review of 52 licensed CFD issuers led to nearly A$40 million in refunds for more than 38,000 investors. The regulator said 42 issuers introduced or improved systems used to monitor trading behaviour and investor outcomes, while 44 strengthened their onboarding questionnaires and 39 amended their target market determinations.
What improvement do VCG ONE users demonstrate in stop-loss discipline?
VCG Markets states that VCG ONE users demonstrate a 40% improvement in stop-loss discipline within 30 days of receiving their first report and 30% fewer impulsive entries, with the company also reporting an 8% higher win rate among active VCG ONE users.
