Key Points to start Business as a Sub Broker | Motilal Oswal

Key Points to start Business as a Sub Broker

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Succeeding as an entrepreneur takes hard work and persistence because, unfortunately, there is no business-startup fairy who magically bestows success on small businesses and their owners. It is only hard work and knowledge that pays you high dividends in the end. 

Most successful entrepreneurs follow comparable patterns and share similar basic characteristics. Hundreds of online articles and published books claim to know the secret of success in business, but for the most part, they boil down to the same major points.

Passion, perseverance and a positive attitude tend to set successful entrepreneurs apart. Cultivating these attributes requires an innate skill set and some tips to get started. There is no room for negative thinking and “giving up” in the mind of any sub broker (also known as Authorised Person) who wishes to be a success, just as this is true for clients and investors who wish to see fruitful gains in the stock market. In order to imbibe a positive view in your clients, you must have that attitude yourself as a sub broker. 

A 'Sub-Broker' is any person who is not a Trading Member of a Stock Exchange but who acts on behalf of a Trading Member as an agent or otherwise for assisting investors in dealing in securities through such Trading Members.

Having a business as a sub broker (also known as Authorised Person) is really one of the best businesses at any stage of your life if you have knowledge about the financial market and products, or a willingness to learn about it. I personally think this is a great business as I don’t think any business is such which has so less capital requirements as this. To add this with the great opportunity which this country has with extremely poor financial literacy & abysmal participation levels in the capital markets (only 2 – 3% of the 125 CRS Indians investing in capital markets directly or indirectly).

Who is the target audience to start the business?

1. Should have passed at least 10+2. (as per the regulations). We think ideally the person should at-least have a graduation degree.

2. Should have the knowledge of Financial Markets, either by virtue of his prior work experience or by knowledge and he should be able to understand and manage the basic Finance transactions

3. Should be equipped with latest information related to the Economic, Politic and Environment scenario. Every information may not be interesting news, but every information affects the Stock Market,

4. Should have the basic knowledge of Computers

5. Should have good communication Skill, and remember Customer Is God Value your customers, Stock broking is highly competitive business,

6. Should have good management skills, after all every business after a point is all about good management of Money, Man, Market and all other resources.

7. Should clear basic NISM modules on equities, mutual funds, commodities, F&O. The regulations require that the sub-broking activities cannot be conducted unless requisite modules are not cleared

What are the capital requirements & working expenses to begin Sub brokership?

This is the point that matters most for all Entrepreneurs, after all money is the most critical constraint of every business. We will try to summaries the basic practical requirement and rough estimation of Investment required for that requirement in below table:

*subject to addition or omission as per brokers

Some Important things to be kept in mind while in the sub broker business:

Choose a good stock broker to partner with. Many entrepreneurs only decide to partner with the broker who gives them higher revenue share of the business without understanding what is the value addition the sub-broker requires during the course of running the business. Choosing a broker is almost like marrying & one does not marry a girl just because she is only beautiful. The sub-broker should make a clear list of the value which he wishes to derive from the broker as also the value which the broker is giving. Understanding in detail & consulting with wise people in family / friends / social circle will help the entrepreneur take a wise decision

Please remember that sub-broker is not a part time business. Many sub-brokers make a mistake of doing this business as part time without giving adequate focus & time & thus not only losing out on a great business but also actually winding up in a few months

Sub-broker business is now not only a sub-broking of secondary market equity business but also graduated into almost like complete services of many financial services business. The client expects much more advice for his money rather than only transactions in equity market & thus the sub-broker has to advise the customer in multiple products like equities, commodities, currency, mutual funds, PMS Etc. Thus the sub-broker has to make himself adequately prepared to give advisory on all the products to the clients.

Key for Sub brokers to get more business

The first & most important thing is to make a “NATURAL DATABASE” of the people whom you would like to make your clients. The NATURAL DATABASE means the list of the people whom you already know & most likely help you in your entrepreneurial journey. It can consist of your family members, relatives, friends, social contacts, your colleagues etc. The conversion of your NATURAL DATABASE as your clients will immediately give you traction in the business. Furthermore, as information about your business spreads through the NATURAL DATABASE, you garner more contacts and increase this database to a wider pool of potential clients. 

Continue with Cold Calls from your prospect databases. You may not see immediate success, but as your calls may linger in people’s minds, you can never tell when you get a response that is positive. 

Please ensure that you do minimum 3- 4 meetings with the clients / prospects. Unless you do meetings it is almost impossible to source clients or bring new money from the clients. Just calling seems like a very impersonal way to communicate. When you have to communicate any information to clients or potential clients, putting a face to a name counts. Clients can “see” how professional and appealing you are, and will likely judge your positive demeanor as something they want to continue a professional relationship with. 

Prospecting will always be critical. As a sub broker (also known as Authorised Person), your income highly depends on your clients so make sure that you have enough active clients. Just because you have established a good relationship with your current clients does not mean you have to stop making cold calls. What will happen to you in the event that one of your clients suddenly moves out? It is important that you make follow-up calls with your existing clients, just to be in-the-know of how satisfied they are with your business. Once you attain a client, or a client base, you have to maintain it if you want to keep it. If you continue with cold calling, you will not worry as much seeing that you have a fall back. Since you already have clients, why not ask for their referrals? Not everybody likes the idea of cold calling and you may be one of the brokers who are not too fond of prospecting. 

You may want to view this another way - at the beginning of your pecuniary relationship with any client, you set weekly meetings to build an investment portfolio and to catch up on financial issues. Keeping in touch with the client can go a long way in keeping them. At least twice a month is enough to reassure them that you are not taking them and their business for granted.  Make yourself available in case they have questions. Build a financial journey for him and give them financial products that suit their needs.

There is a reason why many sub brokers (also known as Authorised Person) attend networking meetings. It may be a cliché but it's true, networking opens the door to a lot of possibilities. The more people you know in the industry, the higher are your chances to get more clients. One referral can lead to another and before you know it you already have clients to last a lifetime or at least while you are in the business. You must remember that there is no other promotion like the “word of mouth” kind in an industry that majorly relies on recommendations to promote business and the skills of brokers. 


In any field that you choose to work in, having knowledge is the key to how you will succeed. Your success depends on the know-how you have and knowledge is wealth. Ensure that you upgrade yourself every day. Not just yours, also your employee’s knowledge building. Get trained and get your staff trained too so that you can add more value to the business. There is a plethora of information out there, and with technology at your feet, you can update yourself on a daily basis. 

Here is a quote that inspires all those individuals who want to see success:

“I’ve missed more than 9,000 shots in my career. I’ve lost almost 300 games. 26 times I’ve been trusted to take the game's winning shot and missed. I’ve failed over and over and over again in my life and that's why I succeed.“ -- Michael Jordan

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Related Articles: How To Choose The Right Sub Broker Franchise In India | 10 Qualities A Sub Broker Must Have To Become Successful | Difference Between Sub Broker Franchise And An Authorised Person | How to Start & Grow Your Sub Broker Franchise in India

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