Populated by millions of investors, traders and participants, online financial markets witness overwhelmingly high volumes of CFD, forex, equities and commodities transactions in even a single day. Attracting new customers in such well-developed and competitive markets can be an arduous task!
This process, however, is facilitated through external specialists such as Introducing Brokers (IBs). Introducing brokers play a crucial role: by bringing customers to the online brokerage.
Even though both Affiliates and IBs are partners with a broker firm, they have different roles. An Affiliate Marketer simply puts up an advertisement for a CFD broker and can earn on each trader that is referred. An Affiliate’s income can either be based on a Cost Per Action (CPA) model or Revenue Share model. This type of partnership has ease of making the recruitment process automated. Affiliates simply refer and are done!
IBs, on the other hand, have to provide a variety of customised services to their referred clients and therefore face difficulty automating the process.
The IB (Introducing Broker) Partnership
An IB can comprise of one single person, a group of individuals, or a registered entity. They work on creating a client base of regular traders. Ultimately IBs make an income through the commission he/she are getting depending on the number of trading processes completed with the online broker.
Partnerships established between the online broker and the introducing broker are a win-win for both sides. The online broker acquires customers who open accounts and trade on their platform. On the other hand, the introducing broker receives a commission on all trades executed by their customers.
How can an Introducing Broker profit?
One of the key variables of IB’s profitability and success is to partner with the right online broker.
Introducing brokers make rebates on their clients’ trades. Thus, the more customers and the higher the number of trades executed with the online broker, the higher one’s profits will be. The sales process includes discussing trading terms and conditions and customers’ expectations before finalising the customer onboarding.
Failure of partnering with a reputable online broker can risk the IB losing its profitability, customer base and most importantly, its reputation. In the world of reviews, social connectedness and the pace of the online financial market, reputation is everything!
As an IB, evaluate the tools the online broker is offering to achieve higher commission, customisable solutions and sustainable growth.
However, it’s not as simple as it sounds so read further!
We have created a checklist for IB’s to use as a filter when choosing the right online broker to partner with. Make sure that your online broker meets the criteria stated below and very soon you should be able to see your profits soar.
So, what should you look for in an online broker?
1. Is the broker regulated?
First and foremost, check to see if the Broker is Regulated!
The most important thing while selecting a CFD broker is ensuring that an efficient regulatory agency supervises that broker. Having an administered broker assures that they meet and operate according to the supervisory body’s guidelines.
Remember this when choosing the right online broker to partner with; you should be able to enhance your customer’s satisfaction. And more importantly, to remember is if the broker is unregulated, they are likely to be untrustworthy, and you will be putting your own reputation at risk. This will result in losing loyal customers and future commissions due to a poor reputation.
Therefore, only partner with an online broker that is highly regulated.
AvaTrade is unique in this aspect: a trustworthy, regulated Broker with six regulations across five continents. More detail about AvaTrade’s licenses and regulations can be found here.
2. Customer service
The second factor to consider while choosing a broker is the quality of customer service provided. A lot of beginner traders do not understand the importance of this and miss out.
It’s the IB’s responsibility to its clients to partner with an online broker that offers excellent customer service to its customers. In the era of globalisation, it is also important that services be offered in multiple languages to cater to your customer’s mother tongue.
AvaTrade, for example, provides outstanding, multi-lingual customer service.
3. The trading platform & software
Trading platforms are considered the doorway to the market, and so, it is important to choose a reliable one accordingly. Most brokers offer a variety of trading platforms to choose from. A good broker is likely to provide options that cater to different kinds of traders – traders that use smartphones for trading, traders that prefer desktop computers, etc.
With AvaTrade you can choose among MetaTrader 4, MetaTrader 5, AvaOptions, ZuluTrade and DupliTrade according to what suits you the best.
4. Do they offer a unique mobile trading application?
AvaTradeGO is a great example of a unique trading application.
Having all transaction options, reports, and results on the go is critical in the fast-paced financial markets of today. The ease of a mobile trading app such as the AvaTradeGO ensures that the customer’s trading experience is uninterrupted, smooth, and productive. This, in return, will directly impact the IB’s customer satisfaction and impact the IB’s profits in the long run.
AvaTradeGO is available for GooglePlay and AppStore download.
5. Does the broker offer a wide range of financial instruments and assets to trade?
CFD brokers such as AvaTrade offer customers the chance to trade a wide range of financial instruments and assets: stocks, options, indices, forex pairs, commodities, cryptocurrencies, ADR’s, bonds, and ETFs.
As an IB, your customers will appreciate you for all the trading options available to them.
6. Is a demo account being offered?
Whether you are a beginner or an advanced trader working on a new platform, a demo account is highly advisable to practice on before trading the actual markets. It allows you to take a test drive which can boost one’s confidence in trading the markets while getting accustomed to using the new platform.
Hence, choosing a broker who offers a demo account is necessary. You can open a demo account with Avatrade.
Go on, and try it!
7. Help with marketing
IBs need to grow their own businesses. A good partnership is built on an understanding of mutual interest and benefits, which includes offering the IB top of the line marketing tools. These tools include promotional marketing material such as banners, landing pages, embeddable material for their websites, trading tutorials and other educational information. All of these can draw considerable online traffic towards the IB and increase their profits.
Make sure to partner with an online broker who is also willing to offer their marketing expertise as this is proof of their commitment towards you as a partner.
8. Reliable, fast payments and transparent reporting
This is a must!
AvaPartner provides one of the fastest accurate pay-outs in the industry that utilises cutting-edge technology to track partners performance and commissions. Partners are provided with a complete dashboard to track their performance and commissions.
Find out how we can help your business grow now!