Business

What is Sub Broker Business? Requirements and Benefits

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A sub-broker is an individual or an organization that operates under a brokerage firm and provides all the services to its clients. The sub-brokers can also operate as authorized persons.

With every successful trading activity, the sub-broker receives a 50%-70% revenue sharing in the brokerage fees.

How to Become a Sub-Broker: A Step-by-Step Guide

Here is the step-by-step process to becoming a sub-broker –

Qualification

  • Minimum of 18 years with 10+2 or HSC degree.
  • Candidate with a graduate degree is given preference.
  • Comprehensive understanding of financial markets and instruments.
  • Few other additional certificates/programs 
  • Among others, certification programs like BCSM (BSE certification on securities markets), NISM courses, and NCFM (NSE Certification in Financial Markets) will also provide leverage to receive approval for the applicant.

The qualification requirement is very less if you want to start Motilal Oswal Sub Broker.

Paperwork

Like any other application form, a certain set of identification and residency proof is required. For ID proof, you can submit an Aadhaar card, a PAN card, or a 10+2 diploma. 

For address proof, go ahead with utility bills. And finally, a letter of recommendation from a CA with a few passport-sized photos will complete the paperwork requirement.

Choose the right brokerage company

They are choosing the right brokerage firm to partner with makes much difference. Please do a thorough groundwork in understanding their business model and the revenue sharing terms. Also, check the pricing structure and brokerage fees they charge their clients, as all these factors will also determine your income level.

Verify the necessary resources (financial and physical)

Verify in advance all conditions set by the brokerage business. Check to see whether you require a certain office space. 

Talk about the first investment as well. Last but not least, look into your broker’s commission schedule.

Share every document and pay the charge

Check-in for a follow-up call after submitting the papers to advance the conversation. Verify that the conditions are negotiated.

Finally, you’ll need to pay the registration fee once your payment has been made.

Account Activation

The only thing to do is wait 5-7 days for account activation. Your broker may provide you and your staff training and instruction on trading platforms, customer service, and marketing strategies.

Benefits of the sub-broker business model

The sub-broker industry has gained attention recently since this franchising model offers a particular set of advantages:

  • The main benefit of starting a sub-own broker’s trading company under brands like Angel One, Sharekhan, and many others is the ability to capitalize on brand recognition.
  • The broker house gives infrastructure. Thus, sub-brokers don’t need to invest in it to operate.
  • Business tracking and management systems with cutting-edge technology are available.
  • The most recent stock research reports are sent to sub-brokers, which aids them in advising customers on investments.
  • With little investment, they achieve high returns.

IIFL Franchise provides all the benefits provided here.

List of brokers with the best partnership models

Check out various parameters to find a good sub-broker provider –

THE BEST SUB BROKER COMMISSION

The top-ranked company on our list is Angel Broking, whose minimum revenue is 50% of gross sales and whose maximum revenue share is 70%. 

Based on the client’s work, it also provides various revenue-sharing options, with a potential payout of up to 90%.

HIGH SUB-BROKER REVENUE SHARE

With SHAREKHAN FRANCHISE, you may earn 50% of the income for the smallest investment, while sub-brokers who spend up to Rs. 100,000 can get up to 75% of the revenue.

BROADEST SELECTION OF PRODUCTS

ICICI Direct, Angel Broking, Kotak Securities, and Motilal Oswal are the four stock brokers that control this parameter. To their clients and sub-brokers, these brokers provide a wide variety of goods.

MINIMAL REQUIREMENT OF A SECURITY DEPOSIT

Angel Broking and Nirmal Bang are taking the top spot in this category once more. The next-placed trio is Sharekhan, SMC, and Karvy. 

Then IIFL on the third and Kotak Securities on the fourth. Fifth, the sixth, and seventh place are Edelweiss, ICICI Direct, and Motilal Oswal.

SUPERIOR TRADING PLATFORMS

A significant impact has been made in this field by Kotak Securities. The nation’s top trading platform, Keat pro X, is well-known. 

Closely following in second place is Sharekhan’s Trade Tiger. Both of these trading platforms are favored by all sub-brokers and their clients.

Conclusion

Regardless of how you approach the sub-broker industry, you can be sure that it is quite lucrative. This is due to the franchisor’s excellent organization and assistance.

When everything is used properly, you will generate much income and be the boss of your own company.

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