High cost of acquiring customers is where the system fails both broker and trader. Brokers are pressured and in turn traders are being pushed with a hard sell and often misleading perceptions of riches to be made trading via advertising campaigns.
The high cost of acquisition is due to the competition out there. The cycle is never ending whereby brokers keep pushing for more customers through mass marketing, aggressive sales and then simply repeat as the life cycle of new traders is short. This leaves a trail of unhappy traders who feel done in and the industry’s reputation takes another hit.