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Key Points to start Business as a Sub Broker

27 Apr 2023

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Starting your own business and ensuring that all the operations are carried out smoothly can be a difficult job. It requires lot of hard work and effort from an entrepreneur to run the business proficiently. 

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.

One such type of entrepreneurship that requires too much effort and dedication is a sub-broker. As technology is advancing at a speedy pace, the demand for sub brokers are increasing rapidly. 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.

Sub-Broking is very rewarding business model and has immense potential for the Sub-Broker (now AP) to earn in from of Brokerage anywhere from few lacs to even crores in a month.  Low-capital investment requirements make sub-broker business an economical and profitable business for individuals.

Having a business as a sub broker (also known as an Authorised Person) is really one of the best business at any stage of your life if you have knowledge about the financial market and products, or a willingness to learn about it. To add this with the great potential and opportunity which this country has with poor financial literacy & abysmal participation levels in the capital markets (only 3 – 4% of the 140+ cr Indian population 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 / her prior work experience or by knowledge and he / she should be able to understand and manage the basic financial transactions.

3. Should be equipped with latest information related to the economy, social & political scenarios as this can influence stock prices. Should stay up to date with current domestic & world affairs.

4. Should have well-versed with operating Computers.

5. Should have good communication skills. It is important to learn to communicate with the client seamlessly.

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?

Sub-Broker business involved less capital requirement compare to other form of business. Some of the basic investments involve the initial security deposit with the main broker (50k – 3 Lac), office rent, utility bills, staff salary, internet connection charges & registration expenses.

*subject to addition or omission as per brokers

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

  • Collaborate with an experienced, trustworthy and reputable broker. 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 the sub-brokerage business should not be a part time job. Many sub-brokers make the mistake of doing this business as part-time without giving adequate focus & time & thus not only losing out on a great business opportunity but also actually winding up in a few months.
  • Sub-broker not just confined to equity transactions but client also expects a rationale & valuation advice on stock picking. Sub-broker business is has also graduated into providing complete services of many financial service businesses. The client expects much more advice for his money rather than only transactions in the equity market & thus the sub-broker has to advise the customer in multiple products like equities, commodities, currency, mutual funds, PMS, AIF, etc; Thus the sub-broker has to make himself adequately prepared to give advisory on all the products to the clients.

Key points every Sub-Broker must know to upsurge their business

  • Build your Clientele: To succeed in business, you need to build a good client base. There are a couple of ways you can adopt, like building a natural database of the people whom you already know, such as friends, family, colleagues, relatives, neighbours who had shown interest in investing in stocks. You can also target potential customers using social medium like LinkedIn, Facebook, Instagram, etc;
  • Start cold calling to acquire new clients: Cold calling is an important of the sub-broking business. You need to add new clients on time to time basis to keep your business running & flourishing.
  • Meeting with Potential Customers & existing clients: It is our current clients that bring money into our business. Regular meeting & engagement with your clients is must to increase business. In addition, finding new clients and enticing them to do business with you can be challenging without proper & regular meetings. Prospecting is an important aspect of agency business to build a pipeline of leads.
  • Keep your clients updated with news on upcoming stocks, changes in rules and regulations, or new investment options. Nurturing your clients will help you win their confidence and create a pipeline of business. You can send them periodic emails on offers, updates, and more.
  • Networking: Networking with fellow agents is a great way to stay updated about the industry and also to expand your business. 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. 
  • Updating Knowledge with Courses: To render the best service, you must stay updated with the latest development in the stock market. You can enrol yourself in the various short and long-term courses offered by the exchanges. Or, sign up for investor education programs conducted by SEBI. Along with, join the agent enhancement and training workshops arranged by the broking firm, reading research reports, and keeping a tab on the stock market news. Investors prefer a knowledgeable agent who will offer them good advice.

Conclusion - Establishing and running a business is never easy. As an entrepreneur, you are expected to wear many hats. Having an agency business is rewarding if you are determined to stay focused and work hard.


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

We hope the above tips are useful to you to transform your business.

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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