Introducing Broker: How IBs Make Money
Introducing broker programs are growing in popularity at an astounding rate. Every day more and more people are realizing that they can make a substantial income merely by networking and understanding the workings of Forex. At the same time customers are increasingly opting to trade via an introducing broker as opposed to large brokerages.
Why do professionals become introducing brokers?
Most introducing brokers have some interest in Forex but they may not have the resources or experience necessary to succeed as traders. For this reason they concentrate on their strengths, such as valuable contacts in the financial sector, good networking skills, and the time and inclination to recruit new traders.
How does an introducing broker make money?
Introducing brokers make rebates on their clients’ trades. IBs meet with their clients and discuss various aspects of Forex as well as determining orders. They delegate the task of carrying out the order to a Future Commissions Merchant. Introducing brokers typically come from financial services backgrounds as such jobs provide them with many likely candidates.
A white label IB makes money by referring his clients exclusively to a parent brokerage. The advantage for the introducing broker is that they can operate under the parent brokerage’s name and thus enjoy improved credibility as well as a range of quality contacts. White labels are a good idea for new introducing brokers as fewer traders are willing to work with complete unknowns who haven’t received any training.
Why do some traders prefer to operate via introducing brokers?
An introducing broker is not occupied with the task of carrying out orders. Instead they can concentrate all their time on the needs of their clients; advising and training them as they make their trades. An IB will take the time with their clients to introduce them to other traders and valuable contacts.
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