Sub-Broker vs. Broker Partner Program

What is a Sub-Broker Program?

A Sub-Broker (also called an Authorized Person - AP) is a person or business firm that acts as an intermediary between a stockbroker and customers. They execute trades on behalf of clients, provide trading guidance, and offer investment advice.

How Does It Work?

• A sub-broker associates with a registered stockbroker and has to be registered with SEBI and the stock exchange.
• They assist clients in opening accounts, making trades, and handling investments.
• They receive a portion of the brokerage income made by their customers' trading transactions.
• They are provided with a trading terminal and can execute trades on behalf of customers.
• They work under the compliance regime as defined by SEBI and stock exchanges.
   

Who Can Become a Sub-Broker?

• Financial advisors who wish to extend their services.
• Investment consultants who desire to manage a portfolio of customers.
• Stock market professionals who desire to offer active trading support.
• People who are ready to obey the laws of SEBI and invest in business infrastructure.
   

What is a Broker Partner Program?

A Broker Partner Program is a referral program where individuals are given commissions for bringing new customers to a stockbroker. Broker partners are different from sub-brokers as they do not perform trades or give investment advice. They are only engaged in finding clients, and thus, it is an easy means of earning passive income.

How Does It Work?

• Broker partners join a brokerage company with a partnership program.
• They are given a special referral link or code to distribute to prospective clients.
• When a referred client opens an account and begins trading, the partner earns a commission on the brokerage fees.
• No regulatory registration, compliance, or business infrastructure is required.

Who Can Become a Broker Partner?

• Finance bloggers and influencers with a following that is interested in trading.
• Social media promoters who are capable of promoting brokerage services online.
• Investors and traders with extensive networking.
• Lead generating digital marketers.
   

Major Differences Between a Sub-Broker and a Broker Partner Program

Earnings and Commission Structure

Sub-Broker Earnings

Sub-brokers receive a portion of the brokerage fee earned by their clients. The rate depends on the deal with the broker and can be anywhere from 30 to 50 percent. Because sub-brokers actively help clients trade, they may also receive extra incentives from brokerage houses.

Broker Partner Earnings

Broker partners follow a strictly passive income model. Most brokers provide:

• 100 % brokerage sharing for the initial three months for new partners.
• Maximum 60 % brokerage sharing after the first three months.
• A few brokers also offer flat commissions per new account opened.

Since the broker partners do not handle clients themselves, their revenue relies on the number of active traders they can refer.

Role and Responsibilities

Role of a Sub-Broker

A sub-broker is an extension of the primary stockbroker and has the following responsibilities:

• Securing customers and establishing a long-term client base.
• Giving investment advice and helping clients carry out trades.
• Maintaining regulatory compliance and client records.
• Placing trades using a trading terminal on behalf of clients.
• Operating a physical office infrastructure to achieve compliance.

Broker Partner Role

A broker partner is only concerned with acquiring clients and has no direct role in trading. Their tasks are:

• Advertising brokerage services on social media, blogs, and online marketing.
• Sharing their special referral link to get sign-ups.
• Assisting prospective clients in realizing the advantages of opening a trading account.
• Utilizing marketing software and analytics platforms offered by the broker to monitor referrals.
• Expanding their network to generate more passive income.
   

Which One Should You Choose?

Select the Sub-Broker Program If:

• You possess experience in stock trading, investment consulting, or financial advisory.
• You wish to engage actively with clients and help them trade.
• You are willing to invest in infrastructure and office space.
• You can meet SEBI regulations and the requirements of a stock exchange.

Select the Broker Partner Program If:

• You have a strong following as a digital marketer, blogger, or influencer.
• You wish to gain passive income without dealing with client accounts.
• You do not want to invest in a physical establishment or comply with regulatory needs.
• You desire a flexible, anywhere-from-work model.
   

Conclusion

Both Broker Partner Program and Sub-Broker Program are great options to benefit from the stock market without immediate trading. Still, they serve different people as per their capability, experience, and business targets.

The Sub-Broker Program suits those people who desire a lively role in trading and management of clients. It demands registration under SEBI, investment in infrastructure, and adherence to regulations.

The Broker Partner Program is perfect for someone seeking a referral-based income model. It is a zero-investment, no-complexity-of-law arrangement with flexible work options.

As an investment professional, the sub-broker route might be ideal. But as a content creator, influencer, or digital marketer, the broker partner model may provide a risk-free and scalable income stream.

Selecting the right model will be determined by your experience, resources, and revenues.