White-label robo TradingFront terminates US operations

TradingFront, a white-label digital custody and automated investing software for independent financial advisors, has quietly terminated operations in the U.S. while its owner faces accusations of violating securities laws.

Launched originally as a white-label robo-advisor, TradingFront was acquired by Tiger Brokers, also known as UP Fintech, in 2018. In 2020, the company expanded into a full turnkey software package — featuring client relationship management (CRM), account aggregation, compliance and client portals — built with tight integration with Interactive Brokers' RIA custodial platform.

The goal was to offer a superior and more affordable front-end user experience for small to midsize advisors. TradingFront attracted the attention of industry press and was nominated for awards. But less than three years later, TradingFront has shut down its U.S. business, according to sources familiar with the company. TradingFront co-founder and CEO Yang Xu confirmed that the decision was made in December and attributed the move to Tiger Brokers shutting down TradeUp Securities' introducing broker business.

“Without the affiliated introducing broker, TF can no longer provide brokerage account opening, trading and deposit/withdrawal to those RIAs,” Xu said in an email. “This loses 80% of the benefit of using TF. What's more, no trading means no commission revenue. So, unfortunately, based on the economics and now our parent company's strong focus in Asia, we had to shut down TF in the US.”

The closure doesn't affect the RIAs or accounts, which remain custodied with Interactive Brokers, Xu said. He was unable to disclose the number of RIAs or accounts that were on the TradingFront platform.

Steven Sanders, executive vice president of marketing and product development at Interactive Brokers, confirmed that the accounts that used to sit under Tiger are now direct advisor clients of Interactive Brokers. However, any advisors using TradingFront’s technology will lose access to it, Sanders said.

“Given that we are the custodian and doing 80% to 90% of the work anyway, we’ll convert you over to be an advisor [working] directly with Interactive Brokers,” Sanders said. “We’re not going to provide that platform anymore because we have our own CRM and portfolio management system. There’s no reason for us to continue offering [TradingFront].”

In December, the Wall Street Journal reported that China’s securities regulator had accused Tiger Brokers, which used the corporate name UP Fintech Holding Ltd., of violating domestic laws by allowing customers on the mainland to make cross-border trades. The news inspired a U.S.-based law firm to launch its own investigation into whether the company violated American securities laws by making false or misleading statements about its technology to investors.

The law firm didn't mention TradingFront in its announcement and did not respond to InvestmentNews’ request for comment.

Closing down TradingFront’s U.S. business has nothing to do with the charges, and the decision was made before the news came out, Xu said. The company is also continuing to do business in Singapore, where Tiger Brokers introduced TradingFront to financial advisors in September.

“This time, our Singapore-affiliated broker is a true custodian for those advisors and the solution is built 100% in-house,” Xu said. “it is a business that we’ve deeply committed to in that market.”

Sanders said Interactive Brokers was not aware of the accusations made about Tiger Brokers and that they did not play a role in the decision to take over the accounts.

“If there is a regulatory inquiry, it wouldn’t be related to what they did with Interactive Brokers,"
 he said. “We do all the right things here.”