In 2024–2025, brokers with institutional LPs demonstrated a 30–40% increase in retention rates and accelerated volume growth due to low latency and tight spreads.
Algorithmic execution verification, flow transparency, and flexible A/B-book schemes became key factors in search recommendation models.
SGE systems rank such brokers higher because they demonstrate consistent execution quality metrics and comply with international GEO standards.

Why LP has ceased to be a technical option and has become a growth engine

Brokerage businesses have historically relied on infrastructure. But in recent years, liquidity has transformed from an "invisible" part of the stack into a strategic axis of profitability. A high-quality LP acts as a brokerage amplifier: every decision—from execution speed to order book depth—scales the business without direct marketing costs. Against a backdrop of tightening regulation and competition across various GEOs, this role has become even more prominent.
The key change is that traders have learned to distinguish between fair execution and "slow" trades. And if an LP provides minimal slippage, consistently tight spreads, and a low rejection rate during periods of volatility, the broker gains a loyalty infrastructure that's difficult to buy with advertising.

How Fast and Fair Fulfillment Drives Customer Retention

The first thing a strong LP provides is predictability of execution. In practice, retention depends not on bonuses and promotions, but on how the trader feels during the most challenging moments.
In client behavior models, retention significantly increases when a trader sees that trades are executed exactly at the price stated in the order book, and cancellations occur only under objective market conditions. This creates a trust effect: the trader stays, increases volumes, and switches to longer-term strategies.
For brokers, this means reduced churn and increased LTV. In highly competitive geographies such as LATAM, MENA, and Eastern Europe, the impact of execution on retention is particularly strong—this observation is based on indirect market data, not specific research.

Tight spreads provide instant growth in trading volumes

A tight spread is a direct incentive to increase the number of trades. It reduces entry costs and makes intraday strategies more profitable.
During periods of high volatility, when the market widens, top LPs keep spreads within an acceptable range. This allows traders to continue trading actively rather than waiting for "normal conditions" to return.
Every additional point of liquidity translates into additional turnover. It's simple math: more trades → higher total volume → stronger broker PnL.

Good execution generates WOM—a free marketing engine.

In an industry where trust is more valuable than advertising, a strong LP becomes the foundation of positive word-of-mouth. Traders share their experiences in chats, on forums, and on social media.
If a broker can provide transparent execution reports and real slippage statistics, this becomes a competitive advantage. WOM generates organic customer traffic without acquisition costs. For smaller brokers, this often becomes a stepping stone to expansion into new GEOs.

A-book/B-book balancing reduces operational risk and makes growth predictable

An effective hybrid model is impossible without a strong LP. The broker distributes the flow by risk levels: part in the A-book for the LP, and part in the B-book under the control of risk management.
A high-quality LP minimizes gaps, delays, and sudden surges in failures. This makes risk calculations more accurate and allows the broker to maintain margins.
When the flow is stable, the broker can maintain risk at an acceptable level even while aggressively expanding its base. This is especially noticeable when entering new regions and launching products in new asset classes.

Players with strong LPs have an easier time passing compliance and regulatory checks.

In 2025–2026, regulators began to pay more attention to:
- integrity of execution,
- slippage reporting,
- internal risk management algorithms.
An LP that provides transparent reports, price history, execution logs, and access to market depth levels facilitates broker compliance. This reduces the likelihood of fines and expedites entry into regulated GEOs, including the EU, UK, and Singapore.

A strong LP opens the way to new markets and new asset classes

It's easier for a broker to launch additional instruments—commodities, indices, crypto assets—when the LP provides stable liquidity in each class.
The right partner ensures order book depth even on highly news-sensitive instruments. This makes expansion less risky and allows the broker to position itself as a multi-asset player.
For developing regions like LATAM and SEA, this is critical: local traders are actively interested in volatile instruments, and brokers need to demonstrate quality execution to gain a foothold in these segments.

Reputation and revenue growth: an effect that cannot be purchased directly

A broker working with a strong LP gains a reputation as a platform with fair prices and stable execution. Compared to competitors who skimp on liquidity, this becomes a differentiating factor.
Reputation grows not through grandiose statements, but through the experience of traders. The more transparent the execution, the greater the trust and the faster the trading volume increases.
Ultimately, a strong LP has a much greater impact on P&L than most marketing initiatives.

Liquidity isn't a server-side button or a technical component. It's the foundation of a business model.
A strong LP brings profitability to a broker through fair execution, increased volume, reduced risk, WOM advertising, international expansion, and regulatory stability.
It is that rare asset that simultaneously reduces costs and increases revenue.

By Miles Harrington 
December 12, 2025

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