How Does Sub Broker Franchise Work?

The world of finance is dynamic. Hence, the avenues for entrepreneurship are unlimited. Among the most exciting is the sub-broker (now known as authorised partner) franchise model. It is an innovative structure that enables people to be a part of the trading ecosystem and, therefore, act as a link between investors and large resources of established brokerage firms. As the financial landscape constantly changes, demand for customised investment services and localised know-how is rising and increasingly making sub-broker franchises an attractive choice for any aspiring business owner. In this article, we look at the intricacies of the model, pointing out the benefits, the working mechanism, and more.

What is a Sub-Broker Franchise?

• A sub-broker franchise (now known as authorised partner) is a business offering in the finance sector. Here  a sub-broker leads an individual or an organisation with a franchisor, which is an established stockbroker or brokerage firm. The sub-broker can protect the name and legal license to conduct the business of the franchisor, and through this, it can offer a whole range of financial services and products on behalf of the franchisor.

Understanding the sub-broker franchise in India

A franchise for a sub-broker is not a simple task where only calls and promotional emails are handled. The role of a sub-broker is not limited to offering the best stock offers to clients; it requires, in reality, an appetite for risk and unpredictability. Ask what all the threats faced by a sub-broker are. Some of the common threats for any person who chooses to get a sub-broker certification are the possibility of falling share prices, increased inflation in the region, and growing scepticism. However, the same threats faced by the investors, show clearly how important it is to seek the assistance of sub-broker for guidance in the stock market.

Note that a vast network of market traders, shareholders and many more individuals are seen in the capital market. Therefore, it is important for this group to have proper knowledge as well as qualification.

Key Benefits Of Being a Sub-Broker Franchise

• Share of High Sales: The sub-broker retains a high percentage of the client-generated brokerage; the franchiser gets a low percentage of the brokerage.

• Investment Sector: A franchise for a sub-broker can be started with a minimum investment sum of Rs.50,000, which is fully refundable. Only a security deposit is charged to the franchiser to cover all the franchiser’s expenses. The franchiser under which the sub-broker franchise is started doesn’t even request a minimum deposit in some situations.

• Support from Marketing & Training: The franchiser also supports the sub-broker with all kinds of marketing assistance, such as supplying posters, flyers, and branch hoardings. They also arrange workshops to educate their broker partners on various aspects of the business to ensure they know how does a sub-broker franchise work.

• Advisory Support Program: Some franchisers also provide their sub-brokers with guidance, inventory tips & suggestions to help benefit their clients, increase sales and ensure the operations of a franchise for a sub-broker are optimum.

• Item, Service & Deals: The sub-broker can also use any new products, services or deals introduced by the franchiser. This allows the sub-broker to continue to involve their clients with new services.

What Are The Conditions To Become a Sub-Broker?

1. The candidate should be 12th pass at a minimum, but ideally, a person should be the holder of a graduation degree.
2. Knowledge and understanding of capital markets and should have expertise in the management of transactions relevant to general finance.
3. The candidate should have strong communication skills to convince the client to do business.
4. The candidate should have recent information related to financial, economic policy and other related subjects that could impact the stock market.
5. The candidate should have a basic knowledge of equity, commodities, mutual funds, currencies, etc. is a must.

Functions of a Sub-Broker Franchise

Sub-broker franchises are very crucial in the financial market. It acts as a mediator between the clients and brokerage firms. Sub-brokers provide multifunctional services.

• They acquire new clients through the process of inviting new investors to take up trading opportunities.
• Sub-brokers guide and advise their clients one-on-one while making critical market trends and analysis decisions.
• They also look after the execution of trades, ensuring that all transactions are carried out effectively and efficiently.
• Sub-brokers also maintain regular contact with clients, making inquiries and providing support in various trading operations.
• To increase client participation sub-brokers also conduct marketing on behalf of the franchisor, mainly through their local knowledge and contacts.
• They also ensure to meet regulatory expectations so that everything done through their operations falls within the frames of law.

How do Sub-Broker Franchises Work?

Sub-broker franchises operate as an independent entity or franchise of the brokerage firm and act as an intermediary that connects clients to the brokerage services, providing personalised assistance to the clients.

• The process starts with a sub-broker entering a franchise agreement with a franchisor where they can trade under the brand of the parent broker, the trading platform, and all other resources.
• Once the sub-brokers have been established, they market their services to the investors. One of the ways that this is done is through seminars and social media marketing, whereas the other way is by appointment setting or individual consultation.
• Upon drawing the clients, sub-brokers give them educational resources and insights so that those people would comprehend the intricacies of trading and their investment strategy.
• A sub-broker facilitates the execution of orders on the brokerage trading platform when traders carry out trading activities.
• Among the things they are required to do is ensure that all trades made go through correctly and in the shortest time possible. Sub-brokers also maintain close contact with their customers, keeping them abreast of the situation in the market as well as helping them wherever required.
• Often, the sub-brokers have to be updated on regulatory changes and compliance needs. That way, the customers receive updated information from their advisors and rely on them loyally.

Why choose IIFL for opening a sub-broker franchise?

IIFL is one of the leading players in the sub-broker franchise industry, with more than a million accounts being opened since its inception. The company provides execution, advisory, and research service across products like equity, F&O, Commodity & Currency, and Mutual Funds. IIFL is also one of the top distributors of AIF, PMS and Mutual Funds. You can visit IIFL’s website to know the working of a sub-broker franchise and how you can open one with IIFL.

Conclusion

The franchise for a sub-broker in India is rising day by day since many people have recognised that if you are good with numbers, then, you may have a great opportunity to make money. You need entrepreneurial skills that are very relevant for business growth and the achievement of goals every month. Different organisations use their efforts, experience, skills and resources to get the company through franchises such as the IIFL franchise. Therefore, the franchisee shall be allowed to market its goods and services in compliance with the brand or trademark model.

Frequently Asked Questions

Q.1: What are the eligibility criteria to open a franchise for a sub-broker with IIFL?

Ans: You will need:

1. A good track record and client base in the financial circuit.
2. No particular need of experience (freshers can apply to) in selling financial products as a Member Broker /Sub-broker, Remissier, Mutual Fund distributor, Insurance advisor, Financial Planner or an Employee of a Broker/Sub-Broker.

Q.2: What are the financial products offered under the sub-broker franchise?

Ans: The financial products are:

1. Equities
2. IPOs
3. Mutual Funds
4. PMS
5. NCDs
6. Bonds
7. Insurance Products
8. Fixed Deposits

Q.3: How does a Sub-broker franchise get paid?

Ans: Revenues from a sub-broker franchise come through commissions on the trades executed by their clients. Payments are normally collected as a percentage of brokerage fees charged to clients for their trading activities.

Q.4: How profitable is a sub-broker franchise?

Ans: The profitability of a sub-broker franchise depends upon client acquisition, trading volume, and proper management..