Introduction
The year 2024 has been attractive for brokers and their partners. Due to market volatility, many new traders are becoming active in the stock market, creating favourable and profitable opportunities for broker partnerships. So, if you’ve been desiring to partner as a broker, this is an exciting time to become a partner and earn high commissions.
What is a brokerage partnership?
A brokerage partnership is an agreement between a brokerage platform that provides the infrastructure and technology to execute trades and an individual or business that brings in clients or uses the platform’s services.
The partnership is beneficial for both parties. The brokerage platform gains more clients and trades, whereas, as a partner, you can start providing trading services to your clients without building your system.
You have access to the brokerage platform’s resources, like market research, trading tools, and customer support, which you can offer to your clients. The platform pays you a commission or fee in exchange for the clients you bring to the brokerage platform. So, whenever your client trades, you earn a part of the revenue.
Before you become a broker partner, you must understand its different types and where your abilities match best. This blog takes you through the various broker partnerships and how to profit from them.
Types of brokerage partnerships
1. Franchisee Partner
A franchisee partner gets a dedicated desk to reactivate inactive clients, support account opening, and manage high net-worth individual (HNI) clients. The brokerage platform provides comprehensive business development support from channel experts and conducts regular training programs for you and your team members. You also have the opportunity of getting mentored by the senior management. ​​​​​​​
2. Affiliate Partner
As an affiliate partner, you get a brokerage share whenever your client executes a trade. There are three ways of affiliating with a brokerage platform: -
- Branch Business Partner - Becoming a branch business partner requires zero infrastructure because you operate from the brokerage platform’s offices. You have free access to research, advice, and dedicated support from the branch’s dealing and back office team.
- Digital Partner - A digital partner can work part-time and remotely. There are no registration or terminal requirements. However, you have free access to market research insights and advice, along with mentorship from the senior management.
- Independent Financial Advisor - As an independent financial advisor, you get a readymade back office infrastructure and risk management system. You can access various wealth management products and services and receive a personalised training program. The brokerage platform also provides migration support for your existing customers. ​​​​​​​
3. Remisier
A remisier works as an independent agent to source new clients for the brokerage platform. The role of a remisier is more basic than a sub-broker. You must register with a stock exchange to partner as a remisier with a brokerage house. Your earnings are based on a percentage of the sales conducted.
What can you sell as a brokerage partner?
After you partner with a brokerage platform, you can offer multiple products to your clients. You can help them trade in equity, mutual funds, commodities, insurance, Portfolio Management Services (PMS), Alternative Investment Funds (AIF), bonds, currencies, and Intelligent Advisory Portfolio (IAP).
How do you find the right broker partnership?
You must join the right partner program to earn money as a stock trading partner. The partner program you pick from the many online brokers should be reliable and pay high commissions consistently.
The first step in finding the right broker partnership is identifying a regulated broker. If you promote a regulated online broker, you can make long-term, high, and consistent profits. There is a potential of earning a six-figure income. On the other hand, if you partner with an unprofessional, unregulated broker, you can suffer losses.
Next, understand the types of broker partnerships it offers, the range of assets to promote, the tools and resources you can access, and the marketing materials available. You must pick a partner type based on your skills and ensure that the resources available are adequate to help you earn profits.
​​​​​​​Summing up
The different types of brokerage partnerships, when well-structured and managed, can significantly enhance the profitability and capabilities of the involved parties. You can expand your services and earn extra income by partnering with a brokerage platform and leveraging the platform’s trading resources and infrastructure.
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