Are you looking for a lucrative business opportunity? Are you passionate about the stock market? Do you want to work in the market apart from being a trader or an investor? If the answer to these questions is yes, then becoming a sub broker can be something you are looking for.
This article will help you understand the meaning of subbroker, the responsibilities of a sub-broker, and the benefits of becoming a sub-broker.
Who is a Sub-broker?
A sub-broker is a person or agency who promotes and generates revenue by selling trading and investment products and services of a brokerage house to the clients they acquire. While the basic idea of a sub-broker is like an agent, sub-brokers have a lot more responsibilities and are thus also entitled to receive a higher share of revenue than any agent.
Sub-brokers do everything from acquiring clients to helping them with their trades. Sub-brokers need to deposit an amount, known as a security deposit, with the brokerage house for getting the sub-broker franchise. However, brokerage houses like Choice India don’t ask for any security deposit from the sub-brokers.
What are the Responsibilities of the Sub-broker?
While becoming a sub-broker can be lucrative, there are a lot of responsibilities that a sub-broker needs to take care of. Here are some of the most crucial responsibilities of any sub-broker.
- Finding the right client is the first and foremost responsibility of any sub-broker. They need to find prospective clients who want to genuinely invest or trade and are looking for a good brokerage house to start their journey.
- Secondly, sub-brokers need to offer assistance to the clients regarding any trading process. They need to have an in-depth understanding of the market to assist their clients in case, they want the sub-broker to trade on their behalf or if the client wants any research and advisory services.
- The sub-brokers also have the responsibility of promoting new trading and investment products of the brokerage house.
- If the client comes up with any issue, the sub-broker needs to deal with it in the first place.
- They need to communicate with existing clients to retain them and understand their concerns if any.
How Much Revenue do Sub-brokers Make?
The revenue that a sub-broker can make depends on the amount of revenue they generate for the brokerage house. The brokerage house pays between 40% to 60% on average to the sub-brokers. So, if you as a sub-broker, generate Rs. 10 lakh of revenue for the month, you can get between Rs. 4 lakhs to Rs. 6 lakhs.
However, if your revenue generation is around Rs. 2 lakhs for the month, the revenue shares will be within Rs. 80000 to Rs. 120000. The revenue sharing ratio varies from one brokerage house to another.
What is the Eligibility for Becoming a Sub-broker?
The eligibility criteria for becoming a sub-broker, which you need to fulfil are as follows:
- You have an educational qualification of at least up to 10+2
- The age of the sub-broker aspirant needs to be 21 years or above
- You cannot be a trading member or registered as a sub-broker with other trading members.
- You cannot be a defaulter of any stock trading activities
- You cannot be a shareholder under any sub-brokerage house
Benefits of a Sub-broker
- As a sub-broker, you need to build a network that helps you interact with different people. This helps in building a network as well as developing your personality.
- Secondly, the income prospect of a sub-broker is too high. You can earn lakhs if you generate good revenue for the brokerage house every month.
- You can become a brokerage house itself later with more experience.
So, if the stock market fascinates you, marketing and sales excite you, and you are looking to do something of your own, sub-brokership is the way you can achieve it all.