What Is The Introducing Broker Program?

Introducing broker programs is fast becoming the rave in the forex trading community. It only makes sense that as the industry grows, it is becoming more important for forex brokerage houses to create IB trading platforms to increase their businesses’ productivity and profitability.

You must have seen it online in a few ads – MTrading IB program, with certain irresistible perks. In this article, we delve into the topic; outlining what exactly introducing broker programs are, what you stand to gain from them, and any other such information that you might need.

What Is An Introducing Broker Program?

IB trading programs are a provision that brokerage houses make for third-party brokers to manage the relationship between them (the brokerage houses) and the clients (retail traders).

In a world where businesses are increasingly turning to incentive-based affiliate marketing to increase their sales revenues, introducing broker programs helps replicate that effect in the forex industry.

Every party involved gets to reap significant upsides. The clients receive a better standard of service than they could have hoped to get, dealing directly with the brokerage houses.

The brokerage houses get access to many more clients and bigger audiences without unnecessarily inflating their marketing budget. And the introducing broker that brings them all together is paid significant percentages on all transactions.

Introducing Broker Program VS Forex Affiliate Program

While they are quite similar, you must note that there is a significant difference between forex affiliate programs and introducing broker programs. Because they both solicit clients for brokerage houses, it’s easy to confuse one for the other. But they are not in the least interchangeable.

Forex affiliate programs are solely focused on sourcing clients. So they create resources just for the purpose. They create a sales pipeline that delivers new clients to their partner brokerage houses, and that is the extent of their relationship with these clients.

On the other hand, this relationship is significantly more robust for introducing brokers. Client sourcing is only the first stage of the program.

After the clients are fully onboarded to the brokerage house, the introducing broker settles into their role as a permanent intermediary between both parties; providing customer service roles and even helping their clients with credit and leverage when they need it.

What Do Introducing Brokers Stand To Gain?

The compensation model for introducing brokers differs across brokerage houses, based on what they each can afford. However, if you’re thinking about becoming an introducing broker, you can reasonably expect the following:

1. Compensation

Of course, the very first thing that you stand to gain as an introducing broker is the compensation that you get paid. And the good thing is that this payment is not usually a one-off; it’s usually a continuing payment for the length of the client’s interaction with the broker. It can be structured in four different ways as outlined below;

2. Cost per acquisition

Under this model, you get paid for every client that you acquire. For a client to be considered as acquired, they must not only open an account with the broker but must also deposit trading capital and execute their first trades. It’s one of the most common compensation models.

3. Cost per lead

Under this model, it is not required that your acquired clients make their first deposits before you get paid. Usually, they have to open an account – this qualifies them as a lead.

However, you should know that the compensation under this model is significantly less than what is offered under the cost-per-acquisition model.

4. Revenue sharing

This is probably the most preferable compensation model in IB forex trading. Under this model, you get paid a certain percentage of the revenue that the brokerage house earns from the clients that you bring in.

Obviously, this means that you have to do the continued work of maintaining that client and keeping them active. But in terms of net returns, this model offers the best value for your work.

5. Multilevel

This is yet another compensation model that helps you get the most bang for your buck in any introducing broker program.

Structured like a traditional multilevel marketing program, this model allows you to earn commissions not only on the activity of the clients that you bring in but also on the activity of the clients that they also bring in.

6. Real-time support

Something else that introducing brokers can come to expect from their partner brokerage houses is constant real-time support. Their success is tied to the success of their introducing brokers, so they provide as much support as they can.

7. Training

Part of the support that they provide to introducing brokers is advanced forex training. Introducing brokers need to be very knowledgeable about forex to be able to help their clients. So, brokerage houses will occasionally hold training programs to help keep their introducing brokers abreast of the latest trends in the market.

8. Access to tools

Finally, introducing brokers also get access to several professional, advanced-level trading tools. There are thousands of tools out there and even the most successful independent trader can only afford so many tools at the same time.

But when you partner with a brokerage house as an introducing broker, you can expect to be given access to some highly specialized trading tools for free.

Related Resource: 7 Advantageous Insights on Auto Trading Software

Benefits Of Introducing Broker Program For Clients:

And what benefits do introduce broker programs hold for the clients – the trading public?

1. Wider access

With the assistance of an introducing broker, traders can access even more options than they would alone. And not just financial instruments to trade, but also resources and a community.

2. Improved trading experience

Also, by partnering up with introducing brokers, traders can obtain an improved trading experience that features more personalized customer support and guidance services.

3. Increased liquidity

Finally, introducing broker programs enable traders to access liquidity to take higher leveraged positions, allowing them greater potential earnings on their trades.

Conclusion

By introducing brokers, clients, and brokerage houses alike, introducing broker programs hold a lot of potential that is just waiting to be unlocked. Why don’t you start your journey into IB forex trading by opening an account today?

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