The definition of an Introducing Broker is simple. An Introducing Broker (IB) is an individual or organization that refers new clients to a trading company (a broker) and receives compensation for those referrals.
An Introducing Broker (IB) is a person or company who acts as an intermediary between the broker and the client. The IB, drives business to the brokerage firm while also providing additional customer support to both the client and the dealer.
He or she has a direct relationship with the client but leaves the trade execution to the broker they partner with. In other words, an IB is an intermediary who advises the client on investing or trading within a specific market and whose primary goal is customer service.
According to Thompson-Reuters:
“An introducing broker-dealer uses the services of another broker-dealer, referred to as a clearing broker-dealer, to clear and settle customer transactions. Introducing firms may also use the services of a clearing broker-dealer to clear and settle proprietary transactions. Generally, the clearing broker-dealer will also custody customer funds and securities for the Introducing Broker”
Introducing Broker Programs
Under an IB Program, the IB will partner with a regulated Broker. The Broker will then provide a trading platform(s) for the IB’s clients to trade.
- Earn commission based on the volume traded by your clients.
- No need to have a specified background in order to become an IB. Basically anyone with an entrepreneurial spirit can do so. If they are willing to learn and work at it.
- You can expand your personal network, meet other people and share ideas.
- Being an IB gives you the freedom to work from anywhere in the world. Just make sure you partner with a broker that can provide you the ability to operate in other countries.
Disadvantages:
- How well you do depends solely on commissions, it’s a double-edged sword since your client’s volume and your income may vary from month to month.
- Your reputation depends on the reputation of the brokerage you partner with. You have to be very careful when choosing who you work with.
Introducing Broker Programs
Under an IB Program, the IB will partner with a regulated Broker. The Broker will then provide a trading platform(s) for the IB’s clients to trade.
Benefits
- You can earn commission based on the volume traded by your clients
- You don’t need to have a specified background in order to become an IB. Basically anyone with an entrepreneurial spirit can do so. If they are willing to learn and work at it.
- You can expand your personal network, meet other people and share ideas.
- Being an IB gives you the freedom to work from anywhere in the world. Just make sure you partner with a broker that can provide you the ability to operate in other countries.
Disadvantages:
- How well you do depends solely on commissions, it’s a double-edged sword since your client’s volume and yourincome may vary from month to month.
- Your reputation depends on the reputation of the brokerage you partner with. You have to be very careful when choosing who you work with.
How Do Introducing Broker Partnerships Work?
Tradeview Markets provides an E-Book: Introducing Broker Partnership Program, which outlines the IB Process:
Why Become an IB?
Becoming an IB is a step towards entrepreneurship. You work on building a strong personal brand that correlates to trust, you’re constantly looking to develop your services that provide your clients added value.
You work on setting yourself apart from competitors, and you build – preferably long-lasting – business relationships. If you have ever talked to someone who has given entrepreneurship a real shot, they’ll tell you how they grew as a person, regardless of the level of success they achieved.
By deciding to become an Introducing Broker, you are essentially taking on an entrepreneurial challenge that requires you to build your brand, and develop business relationships. Like most things in life, the amount of success is related to the amount of effort you put in.
As an Introducing Broker, you can make progress toward your goals within the business every day. You will get involved in a dynamic program, where the more clients you refer, the greater your income potential will be. It’s a flexible job where you can develop your skills and manage your own time while making money.
How Does an Introducing Broker Make Money?
In one of our earlier Surfs Up! articles, we listed some of the ways an IB can make money:
Introducing brokers earn rebates on their clients’ trades. IBs meet with their clients and discuss various aspects of Forex, stocks, futures, crypto or any market the client wants to dive into. That being said, it is advisable for you to pick one market and become an IB Rock star on that one, then once you are strong in that market you can jump to another one).
Some of the aspects you can talk with your client about are trading strategies, risk management or other tools that can help him or her become a much better trader.
They delegate the task of carrying out the order to their partner or clearing broker. Introducing brokers may come from financial services backgrounds, but many start out in other areas as long as they have the ability to meet people and provide information to generate leads and clients.
What makes an Introducing Broker appealing is the service they provide. The added value of offering instruction, tips, learning materials or in person training. So in practical terms, while your clients are trading with the brokerage, they are choosing you to do business with.
Now, there are many types of clients, but 2 main types are:
- High ticket clients that will invest large sums of money, these will allow you to make larger commissions from a few clients.
- Smaller traders that invest more modest sums of money, for these clients an IB will want to get as many as they can as it’s the sum of clients that they depend on to get a hefty commission. The types of clients you want to go after will determine the strategies that you use.
Also Read: How to be a Successful Introducing Broker
Social Media and IBs
There are many social media platforms in use around the world, so generating a social presence can seem overwhelming. However, if you focus on the top 5 platforms, you can begin staking your claim on the social sphere without feeling overwhelmed. The heaviest hitters in the social world are Facebook/Instagram, LinkedIn, TikTok, Snapchat, Youtube and Twitter.
Social Media is most effective when kept current and consistent. Try to post on all social media platforms on a regular basis. This gives followers consistent and relevant information that will continually keep your business in their minds, turning followers into clients.
There are other platforms that traders use to share information. Reddit for example, has multiple investing and trading communities to choose from.
r/investing: has over 1.9 million members. it has a serious audience which means that contrary to other groups almost no meme is shared within the forum. In it investors share ideas about news and relevant developments.
r/pennystocks: has over 1.6 million members. This group is for traders that invest in less known companies. Within it members discuss news, developments and stock analysis.
r/stocks: has over 2 million members. Users provide company analysis, ask questions, and discuss later developments.
r/wallstreetbets: has over 10 million members. It is a meme stock community that dominated news coverage in 2021.
Another Platform is Quora. It has a lot of trading related groups. Some of the most popular ones are Forex, Forex Trading, Forex Signals, Forex Trading Discussion, Trading Strategies, Trading Signals, Stock Trading Lessons, and Stock Trading Market.
Finally, TradeGATEHub is also a great choice when it comes to having first hand news and developments on Forex, Stocks, Commodities, Crypto, as well as global headlines. It also has an active discussion environment, multiple forums, trading rooms, and a watchlist market with Majors, Commodities, Crypto, and Indices information.
TradeGATEHub provides a charting session where traders can see market fluctuation by symbols. Members also have access to educational resources and webinars.
Being an Introducing Broker with Tradeview
- With Tradeview IB’s have their own website, spent money on advertising, and created social media channels and in return have built successful businesses for themselves and receive a healthy sum of money each month in commissions.
- Like other types of brokers, Introducing Brokers make money by a commission that’s charged to their clients for each of their trades. As an IB you can provide added value to your clients by offering additional services, support, or educational content.
This is why they may want to do business with you instead of directly with the broker. You will be providing the person support some clients need to feel comfortable. - By working with Tradeview you can rest assured that you are getting the highest quality trading service for your clients. That way you only have to worry about providing them with your knowledge, service and experience.
- Tradeview has one of the best sets of trading platforms, which means you can attract all types of clients.
- Some of the best introducing brokers do not even trade themselves but rather focus on bringing interested traders to their partner. Tradeview Markets offers great spreads, excellent customer service, and a wide array of products – it is a win-win for the Introducing Broker and their clients.
If you want to become a better Trader, make sure to enroll in Tradeview Academy for free! Find worldwide news, blogs, and all the info you need to build great trading strategies with Surfs Up!. If you want to check on those strategies and get advice from the pros make sure to join our trading community TradeGATEHub.
