London Capital Group (LCG) experienced a sharp loss in revenues and a substantial loss in 2023 following a strategic shift to an Introducer-Only model under new management.

As reported exclusively by FNG in mid-2023, LCG transitioned to becoming an introducing broker, partnering with former rival IG Group and Swiss-based parent company FlowBank. The new management team, led by CEO Dave Worsfold and Managing Director Matt Basi, opted to focus on referrals rather than direct client trading, aiming for long-term stability. However, the company’s 2023 performance highlights the challenges of this new approach.

London Capital Group Faces £6 Million Loss in 2023

LCG’s revenues fell 16% to £1.68 million in 2023, down from £2.0 million in the previous year. The company posted a net loss of £6.0 million, a significant increase from its £2.4 million loss in 2022. This marks a stark contrast to LCG’s peak performance in 2018 when it posted revenues exceeding £31 million as a leading UK online broker.

The revenue generated in 2023 came primarily from a back-to-back arrangement with FlowBank, where client trading activity was hedged by FlowBank, and fees were paid to LCG for the volume generated. LCG also earned revenue from introducing clients to third-party spread betting and CFD providers, receiving a share of the clients’ trading costs.

Under its new business model, LCG is focusing on partnering with the largest firms in the industry, providing clients with access to top-tier technology and pricing while offering high-touch services. Outsourcing operations has significantly reduced costs, allowing the company to focus on client service.

The board reports that the Introducing Broker model has gained traction in 2024, with expectations for profitability in the second half of the year. However, LCG’s future remains uncertain, as it is currently in the bankruptcy proceedings of its parent company, FlowBank. Walder Wyss, FlowBank’s liquidator, is actively seeking a buyer for LCG.

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