February 2, 2022

6 Steps to Becoming an Introducing Broker

introducing broker

If the world of investing fascinates you, and if you want to make money without executing direct trades, you may find success as an introducing broker (IB). Like an affiliate marketer, an introducing broker partners with an actual brokerage, but its role is distinct from an affiliate. An IB is like an upgraded version of an affiliate. They offer more services and can also make higher commissions.

If you can attract clients/customers and provide services and consultation, you can make healthy commissions as an introducing broker with the following steps we have outlined in this blog post. Firstly let’s define what is an IB-Introducing Broker.

What is an Introducing Broker? 

An introducing broker has a direct working relationship with clients but does not directly execute trades. The actual trades are made by the brokerage with whom the introducing broker partners. The introducing broker brings clients in, provides consultation and services, and receives a commission for every trade the brokerage makes on behalf of these clients.

If bringing in clients and referrals to a brokerage sounds like what an affiliate does, that is understandable, but there are differences between an affiliate and an IB. An affiliate can set up an affiliate website or affiliate links and attract referrals for the brokerage. This is all the affiliate needs to do. In some cases, an affiliate can upgrade their status to an IB, but usually, their main task is marketing.

An IB may bring in clients through marketing, but they take it a step further and provide services and consultation. An introducing broker (IB) can create an in-depth, long-term relationship with clients. This is a win-win situation for both the IB and the brokerage because the client will trade through the brokerage and the IB will receive commissions for these trades.

Does working as an IB sound interesting? The following are the steps necessary to get started!

Find Out What Certification You Need

To work as an IB in the European Union, there is no requirement for special certification, so in other words, anyone can become an IB. Other countries like South Africa, Australia and the United States require some certification for Introducing Brokers.

This may sound like good news for EU residents who want to introducing brokers, but it is important to keep in mind that brokerages want to hire partners they can trust. They need to know that the introducing brokers they are signing on are knowledgeable, reputable, and will maintain their positive reputation.

Therefore, brokerages that are certified by organizations such as the Financial Conduct Authority in the U.K., for example, will most likely require some certification from prospective introducing brokers. The kind of certification that is appropriate depends on where you will be doing your work. Contact local financial regulatory authorities for details about certification.

Find the Right Brokerage to Partner with

Now that you have your paperwork and licenses in order, the next step is to find the right broker to partner with. There are hundreds to choose from, so this step requires significant research. You should ask the following questions before partnering with a brokerage:

  • Is the broker regulated?
  • How are their Trading Platforms and Software?
  • What about Financial Instruments-what do they offer? CFDs, options, Forex?
  • Do They Have Mobile Trading Apps? 
  • Do they offer a demo account or trading tutorials to help your clients succeed?
  • Is there marketing assistance?

Finding a regulated brokerage to partner with should be a high priority. Clients want safe trades and are concerned about scams. Partnering with a reputable broker with supervision from a regulatory agency is essential to keep clients happy and to protect your reputation, and most importantly ensures your success and will give you a great reputation in the long run.

Think about what your clients want in a brokerage and look for these qualities in a partner brokerage. An advanced trading platform and software will make trading more efficient and provide up-to-date information. Providing a wide variety of trading instruments appeals to every investment style, whether clients prefer ETFs or Forex or to trade cryptocurrencies through CFDs.

Any trading platform must have a mobile component with apps that facilitate trades on for example AvaTradeGO. The markets are moving faster than ever, and mobile trading will help clients stay ahead of the game. Also, the best brokerages have marketing assistance to affiliates and IBs with banners, landing pages, and embeddable materials for websites. 

Make a Deal

Once you have located a brokerage to potentially partner with, check out what they are offering. Look at the rate of commission per trade and determine whether it is in your range. Also, think about whether the rate suits your style and the kinds of clients you will attract.

Do you prefer working with just a few clients per day and zeroing in on the big, lucrative trades, or take the cumulative approach and build up a large number of commissions over numerous clients? This may affect how you view the commission rates being offered. You can choose from a variety of commissions to best suit your business goals, Choose from RevShare, CPA, or hybrid. Ask your brokerage how flexible they are with these commission types, perhaps you’ll need a customized solution.

Look at the perks the brokerage is offering. Will they provide access to special tools for IBs and clients such as trading apps and access to a trading platform? Do they offer demos you can invite potential clients to try? How much access will you have to their marketing materials? 

If the offer looks good and you have examined your options, you may want to partner up or look around a bit longer for the right fit.

Find Clients and Referrals and Sign Them Up!

You have signed the agreement with the brokerage, and it is time to look for clients. Setting up a website and social media pages and introducing them to the brokerage you are promoting is the next step.

Unlike an affiliate, you can take your time and get to know these potential clients and get a clear idea of their investing or trading style. Are they short-term traders-swing traders, day traders, or are they longer-term traders/investors such as position traders? In other words, are they the buy-and-hold type, or do they prefer quick trades? Which financial assets do they feel more comfortable trading? 

Give them advice every step of the way and introduce them to the trading platforms with demos. This is the rewarding task of winning them over and making them long-term clients.

It is important to stay informed about the market. Read and stay up to date on the financial news daily and where stocks, commodities, currencies, and other vehicles are heading. If clients feel that you are well-informed, they will respect your judgment and have faith in your advice. This will benefit you as an introducing broker and the brokerage you are promoting.

Develop an Online Presence

If you want to earn high commissions as a successful introducing broker, you need to develop an online presence. Not only do you need to reach new clients, but your name needs to be ‘Google Gold’. Put simply, if a potential client Googles your name, they need to see a list of positive and powerful returns that immediately portray you as a credible financial commentator. What you’re basically doing is creating a personal brand and marketing yourself. If you can think strategically and work systematically, you can develop a high-value online presence.

If you have a common name like John Smith (that millions of other people share), consider using a more distinctive name that Google will immediately hone in on. If you’re operating an honest business, there is absolutely nothing wrong with using a professional name. If you don’t want to change your name, try always using it in conjunction with a distinctive brand name or a corporate name that advertises your IB service. Once you have a unique, Google-friendly identity that compliments your role as a Forex introducing broker, it’s time to get your name and links published across the internet.

Your goal is to portray yourself as a reliable and trustworthy voice with valuable insights into the world of online forex trading. Think in terms of podcasts and YouTube videos, trader eBooks, a regular financial column, blog posts, and guest posts. Consider creating an online question-and-answer forum. Get people to like, comment, and quote you on social media. If you can build a genuine following on Facebook, Instagram, and Twitter, you’re already one step ahead. A popular YouTube channel is an even more powerful marketing tool for Forex to introduce brokers. Whatever online resources you develop as an IB, your emphasis should always be on quality over quantity.

Build on Your Success

New York Yankees legend Yogi Berra once said, “Nothing succeeds like success.” This is certainly true as an introducing broker, particularly in the environment of internet reviews where reputation is everything. If your clients are pleased and see significant returns on their investments, the brokerage you are partnering with will be pleased with you.

Rather than rest on your laurels, ask your most satisfied customers to refer their friends and families to you. They may do this gladly but also provide some incentives. The more clients you bring in, the more the brokerage will value your role as an IB, which will build on your mutually profitable partnership.

A Few Things to Keep in Mind

Now that you have five steps for success as an introducing broker, there are a few parting points to keep in mind.

  • You Can’t Succeed Without Clients
    It is too easy to be satisfied when just starting out. You may feel that just having a few clients short of your target is fine for the time being. However, when you are cutting your teeth as an IB, it is essential to build your reputation. It may be tempting to start by focusing on just a few premium clients, but that may be more appropriate for an IB who has already built a reputation. This means getting the word out there and promoting your IB business aggressively early on.
  • Go for the High Commissions
    If you land a client early on who makes high-value trades only occasionally, that is good. If you have a client who is a rookie trader and wants to keep making trades every few days with moderate amounts, that is also good. The key is to keep earning commissions, and you will earn commissions by trades. The trade is the thing.
  • Don’t Cut Corners
    Partnering with a flashy brokerage that will ultimately overpromise and underdeliver is a waste of time. Digging in and doing the research before signing a partnership agreement is not only wise but a requirement. Similarly, don’t skimp on licensing. Make sure you have all the paperwork and the right credentials before you begin. Building a reputation requires trust and accountability on both sides is key.

Now Is the Best Time to Succeed as an Introducing Broker!

With more people spending time online and looking for ways to stretch their savings, now is the best time to build a client base for a partner brokerage. Many eager candidates want to make the most out of their money, but they need a helping hand to understand trading platforms and how brokerages work. Reaching out to them will enhance their financial opportunities and create strong returns for you, your clients, and your brokerage partner.


Do I need a license to be an introducing broker?

Regulations governing introducing brokers or IBs vary widely. Different jurisdictions have different regulations. If you’re in the EU or UK you don’t need a licence. However, reputable registered brokers are choosy about who they accept as introducing brokers. If you want to build a business relationship with brokers – and traders – you will need some kind of professional credentials or an established reputation to be an IB.

What commission plan is best for introducing brokers?

There is no single best commission plan for Introducing Brokers. Your choice of plan will depend entirely on the number and quality of your referrals (high volume long term against small time and short term). Ideally, you should find a leading broker with a reliable affiliate program and check them out. They should give you the option to negotiate a personalized commission plan for introducing brokers. This could be CPA, RevShare, Hybrid, or a specialist plan.

How do affiliate programs help introduce brokers?

If you are working with a reliable affiliate program – and you’re delivering clients – you should expect to receive help as an introducing broker. This can include trading apps and access to platforms for your clients. You should also be able to give potential clients demos and tours. It may be worth trying to negotiate fixed spreads or cashback deals for high-volume clients. The bottom line is that if you’re making money for a program as an introducing broker, you can be assertive and request better resources.

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