Like the wider financial markets, the forex trading market is growing, and coming of age. And with that growth, a lot of new roles are evolving in the ecosystem. One of the most prominent of these new roles in recent times is that of the introducing broker. Not only are more people signing up every day to become introducing brokers, but it is also becoming quite popular with traders looking for a personal touch in their relationships with their brokerage houses.
However, for many, it’s still a quite vague concept that they struggle to understand. In this article, we explore what an introducing broker is, how one can become an introducing broker MTrading.com, and answers to a few other of the most frequently asked questions on the topic of IB forex trading.
What is an introducing broker?
In simple terms, an introducing broker is a person who works to facilitate relationships between forex brokers and the traders in the market. Usually, they provide marketing services to their broker partners, helping them find clients; after which they build long-term relationships with the clients that they bring in, providing consultancy and support services to them.
In this arrangement, the introducing broker gets paid a certain percentage as commission on each deal that their clients complete. The clients get better service quality and the brokerage house gets more clients and more business.
Who can become an introducing broker?
The requirements to become an introducing broker can vary, depending on the broker you want to work with and the laws of your region of residence. However, generally, anyone can become an introducing broker, as long as they have demonstrable experience in the markets and can fulfill KYC and other legal requirements. But to be sure, we advise that you research the specific requirements of whatever broker you choose to work with.
How to become an introducing broker?
So, if you do decide that you want to get into IB forex trading as an introducing broker, how should you go about it? In this section, we highlight some steps to follow in your quest to become a top-rated introducing broker.
● Find a broker to represent
The very first thing to do is to go shopping for a brokerage house to represent. This is not a decision to be taken lightly. Your success as an introducing broker may very well be determined by whichever broker you choose to work with.
So, you want to make sure that the broker you choose satisfies the following criteria:
1. Is sufficiently registered and licensed to practice in your country.
2. Has a decent reputation in the forex trading industry.
3. Has the capacity to provide optimum services to the clients that you bring in.
These criteria are very important because, in the end, your reputation as an introducing broker will be tried to that of the brokerage house that you represent. So, you will bear part of the blame for customer disappointments. Also, consider the commission percentages that they offer, and pick one that offers the best returns for your efforts.
● Research the requirements
When you have found a broker that you would like to work with, the next thing to do is to research the requirements associated with the role. As we’ve said in the earlier section, different brokers and regions have different requirements. So, you have to find the specific requirements of your government and your broker of choice.
In the united states and a few other countries, there are certain certifications that introducing brokers are required to have, by law. However, in most countries in Europe and Asia, there are no such certifications. So, if you live in Kuala Lumpur, you’ll probably have to possess these formal certifications.
Regardless, brokers want to be sure that the introducing brokers that are affiliated with them are competent and have good reputations, so they might put you through assessment exercises to ascertain if you fit the required profile.
● Leverage social media
These days, social media is such a key part of building any business, IB forex trading inclusive. Join all the important social media sites and begin to actively build a presence and cultivate an audience. It would be helpful to find a unique name that helps you to stand out.
As an introducing broker, your most important asset is information. Clients trust you because they expect that you have more information than they do about the markets and how they can make the most use of their trading capital. So, play into that by creating and posting online resources on your social media pages — eBooks, quotes, webinars, and whatever else is necessary. This will help grow your recognition, opening you up to thousands, and possibly millions, of new potential clients.
● Actively solicit referrals
One of the fastest ways to build your profile as an introducing broker is to get referrals from your present clients. Word of the mouth is the most effective marketing tactic known to man. It costs almost nothing and works much better than the most expensive advertising options. Because people will much rather trust something that was recommended to them by a friend than a fancy ad on Twitter or YouTube.
Granted, when your clients get the best service from you, they will be naturally inclined to talk about it and recommend you to others. However, you can’t assume that it’s given; you have to ask for it. So, don’t be shy to ask for referrals. You can even structure incentives to encourage your clients to make those recommendations. In no time, you will see your client list grow exponentially.
IB forex trading is a new, evolving, interesting aspect of the forex industry. And it holds so many opportunities, for introducing brokers, clients, and brokerage houses. With the right information and strategies, you can unlock more value from your forex trading than ever.