How to become an Introducing Broker: 5-step guide

An Introducing Broker (IB), is an important and valuable part of the trading industry. It is an individual or a company that refers new clients to a trading brokerage and gets rewarded for that in commission.

Wanting to become an IB does not really hold any restrictions. Whether you are a company or an individual, you can easily become an IB. Being a professional trader is not a prerequisite.

It usually takes less than a minute to become an IB with most of the brokers available online. All you need to do in general is register an account with a broker. However, let’s dive into this detailed 5-step guide on how to become an Introducing Broker.

Step 1: Check required certifications

In some countries, like South Africa, Australia and the US, some certification for Introducing Brokers is required. In any event, it is up to the IB to check whether they require certification in the country they are operating in or from.

IBs should also keep in mind that brokerages want to hire trustworthy partners. You will need to be knowledgeable, reputable and be able to maintain your positive reputation.

Step 2: Find the right broker to partner with

The next step in becoming an IB is to find the right brokerage to partner with. Since there are hundreds available online to choose from, this step requires significant research. Before partnering with a brokerage, consider the following questions:

1. Is the broker regulated?

2. What trading platforms and software do they use?

3. What financial instruments do they offer?

4. Do they support mobile trading apps?

5. Is there a demo account or are trading tutorials available?

6. Is there any marketing assistance?

Partnering with a regulated, trusted broker should be a high priority as clients want safe trades and are concerned about scammers. Their safety will be good for your positive reputation in the long term.

Step 3: Make a deal

Check out what the broker offers. Look at the commission rate per trade and determine whether it matches your needs and your clients’ style. You could also ask your brokerage how flexible they are with these commission types as you may need a customised solution.

Check whether they provide access to special tools for IBs and clients including trading apps or access to a trading platform, and of course supportive marketing materials. Then you can go ahead and make a deal.

Step 4: Refer clients

It is now time to look for clients. You could do so by building a website and social media pages and start introducing them to the broker you partnered with. Take your time and get to know your clients and their trading style. Determine whether they are swing traders, day traders, or position traders as well as which financial assets they feel more comfortable trading.

Most importantly, stick with them throughout the whole journey. This is how you will turn them into long-term clients. Also, stay up to date with the latest news and trends of the market. This way, they will trust and respect you the same way the brokerage will.

Continue your success

According to Yogi Berra, the New York Yankees legend, “Nothing succeeds like success.” With all these online reviews on the Internet, reputation is everything, especially for IBs. If your clients are happy with the returns on their investments, then the brokerage you are partnering with will be happy, too.

You can even ask your most satisfied customers to refer their friends and families to you. The more clients you refer, the more the broker will appreciate you as an IB, which will result in a mutual profitable partnership.

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