How to become a successful IB?

What or Who is an
"Introducing Broker"?

Introducing Brokers are an important and valuable part of the trading industry.
Introducing brokers appeared over 35 years ago and originally worked in the commodities market. That's why you can often come across the term "Сommodity broker" when searching the web for a definition of an introducing broker.
As the markets developed and trading became available to millions of people, not only professionals, introducing brokers started to provide their services in various markets and work with different financial products such as stocks, currency pairs, indexes, options, etc., and the most hyped product in the past 10 years – cryptocurrencies.
To put it simple, an Introducing Broker, or shortly IB, is a company or an individual that attracts new clients to a trading company (broker) and gets a reward (commission) for that.
Basically, an IB acts as an intermediary between a broker and a trader connecting them to each other. In this type of cooperation, a broker is responsible for executing trades, while an IB takes care of clients by consulting them and providing support. An IB doesn't have to worry about how trades are executed, how trading software is maintained, how accounting and billing processes are organized, etc.
In 2007 the European Union introduced the Markets in Financial Instruments Directive, shortly known as MiFID, an official document that regulates financial markets in the EU. In January 2018, the new version of this legislative framework was introduced, MiFID II. According to MiFID II, Investment Firms (brokers) are not able to cooperate with IBs any more.
It means that currently there are no legitimate companies that accept traders from IBs in Europe.
The good news is that IBs are welcome if they operate outside of the EU.

The rest is simple: you need to choose a broker, register an IB account, get your IB link, refer clients to the chosen broker, and start earning.
There are practically no restrictions for those who want to become an IB. Today you don't have to be a professional trader, neither do you need to obtain any specific licence.
Anyone can apply, but not everyone can succeed in this business
You should consider being Introducing Broker as a real business, not a hobby. Your success will depend on how much time and effort you are ready to put into this activity and how dedicated you will be to this work. Keep in mind that it is easy to get an introducing broker account, but it is much more difficult to start making real money, turn into a successful IB.

Introducing Broker refers (introduces) customers to a broker. Trader should open an account via IB link in order to be identified as IB's customer. Once the referred clients funds the account and start trading, IB starts earning commission based on trader performance.
An Introducing Broker finds new clients through advertising and offering trading related services like:
Wealth management
Fund and portfolio management
Trading Advice
Signals, Investment ideas and Consulting
Trading Education
Seminars & Webinars, Trading Schools & Academies.
Local community
Local representation & community management
Important Tip:
Before you start referring customers to a trading platform check how the platform works.
You must be sure that after registering an account the trader will be attached to you.
If you have any doubts - consult broker support!
Introducing Brokers is not involved in client's orders execution – this responsibility lies with a broker.
An IB is interested in keeping the clients trading for as long as possible, because the more they trade, the higher the IB's income is.
Profit or Commission directly correlates with clients' trading performance (trading turnover) — i.e. the more the referred clients trade, the higher the IB's income is.

Initially, IBs mainly serviced local customers, but today, when the internet allows you to be available 24/7, many IBs have foreign clients all over the world. Their accounts sometimes constitute up to 50% of an IB's total portfolio. This means that IBs now have more possibilities to earn as they can easily build, maintain and increase an international client base.
We hope that we gave you answers to the basics questions about IB business.
Best Introducing
Made on