How to Make a Profitable Sub-Broker Business?
People who want to expand their wealth seek investment opportunities in the stock market. However, these enthusiastic investors may not have the required experience to begin stock trading. This is where a sub broker firm will be of great assistance. Sub broker business help customers begin their investment journey by finding a suitable brokerage firm. They work as a bridge between stock brokerage firms and customers.
So, a sub broker has plenty of business opportunities, as many customers are inclined towards stock investment. The following post will tell you everything about running a profitable sub broker franchise business consultant.
Obtain the Required Knowledge
To begin your sub broker business, you need to know all its details. You must have fundamental academic qualifications like an undergraduate degree. It’ll be great if you have a background in Commerce, Economics and Finance.
Then, you must understand the financial markets. First-hand experience working in the stock market will help you establish your business effectively. Alternatively, you can take crash courses and training and read books about the stock market to gain in-depth knowledge.
Moreover, you’ll need excellent financial management skills to help customers invest properly. Understanding the customer’s requirements is also an essential skill.
Lastly, for sub broker activities, you are required to clear NISM modules on mutual funds, commodities, equities and F&O. It will offer you a comprehensive understanding of the stock market.
You can also opt for exams like NCFM and BCSM to be a sub broker or start your business.
Manage the Initial Expenses
After obtaining the basic knowledge, you have to manage initial expenses for your business. You need to pay a registration fee to the corresponding stock exchange, which will amount to INR 15,000 to 20,000.
Then, you must pay approximately INR 50,000-3 00,000 to the stock broker under whom you want to work. However, this amount can vary according to the broker.
If you have your own office space, you might save a lot. But if you don’t, you have to manage your funds to pay the monthly rent of office space. The rent will depend upon the location and office size.
Gather the Appropriate Professionals
Building your team will lay the foundation of your business. So, gather people who are experienced in working as a sub broker or at a sub-brokerage firm. They must have skills in sales, back office operations, client communication and handling financial transactions.
Based on their skills, you can divide the work responsibilities to run the sub broker business operations smoothly. However, include their salaries in your company expenses and budget.
Choose the Right Stock Broker
The success of your sub broker business will depend upon the selection of the stock broker. So, take your time and research carefully before joining hands with one.
Understand all the terms and conditions of the agreement with your preferred broker. Talk about the sub broker commission, facilities, advisory support and business assistance. Ask whether they’ll help you get customers, mode of payment and payment cycles.
Some stock brokers offer sub broker franchise without deposit facilities. If the brokerage firm is new, ensure its market reputation and position. Try committing to brokers with high turnover and a satisfied customer base.
Utilize your professional contacts to learn about various stock brokers before finalizing one.
The Bottom Line
If you fulfill your customer’s needs and offer excellent services, you’ll get more clients. Further, your stock broker partner firm will reward you for fetching more customers. Based on your performance, you might get a hike in your sub broker commission.
You must keep analyzing the financial markets, trends, and social or economic factors that affect the market. This will enable you to make better business decisions to boost sub broker company’s growth.