Sub Broker or Sub Broker Franchise is one of the most popular forms of spreading stockbroking business. This article will guide every aspect of a sub-broking franchise business.
It will include the benefits of getting into this business, eligibility criteria and about the process of application as well. Let’s start with the details of a sub-broker franchise.
What is a Sub Broker Franchise or Business Partner?
Sub broker franchise can be described as one of the popular processes of stockbrokers for expanding their business in an area.
It is one of the most effective methods of distributing business products and the services it sells. The sub-broker franchise acquires clients and sells the products and services of the stockbroker.
According to NSE, a Sub Broker can be any individual working for a trading member of any stock exchange in the country.
He / She cannot be a trading member himself of any stock exchange. He / She has to work on behalf of a stock exchange trading member.
They need to be registered with SEBI and carry that certificate of registration from SEBI while applying for sub-broker’s role.
The SEBI registration is mandatory and trading members are strictly advised to deal with only registered sub-brokers of SEBI.
There are a franchisor and a franchisee in this whole system. While the trading member or the stockbroker is referred to as the franchisor, the franchisee is the sub-broker.
Every franchisor has certain rules and regulations and both the parties signs a “franchise agreement” before getting into the business and deal with each other.
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What are the various types of Sub Broker Franchise or Business Partner?
There can be four kinds of business partners of a stockbroker or a trading member of the stock exchange. Here are the details –
Authorized Person / Business Partner / Sub Broker
This can be referred to as the sub-broker in simple terms. This individual is appointed by the stockbroker or the trading member.
The Authorised person deals in the products and services of the stockbroker. Since the trading members are registered with the stock exchanges, via them these APs are also monitored by the stock exchange.
Master Franchise
Another kind of franchise is Master Franchise where a stockbroker gives the whole franchising job to one franchise in a particular area, city or in a town.
Against a fixed percentage of share in the revenue, these franchise rights are purchased. In that particular area, all the franchise will be sourced out of the Master franchise.
It is one of the widely accepted methods of stockbroking houses to spread their business across the country.
Remisier
You must have heard the term agent in financial industry a lot and Remisier is nothing but an agent of stock broking company.
They work on a commission-based model and generally the commission is less compared to other two business partnership models earnings mentioned above.
Here the Remisier get a commission when their referred clients purchase products and services of the stockbroker.
Introducer or Referral Program
Under this kind of business partnership, you can just refer anyone to the stockbroker and earn. Though the earning potential is lower your job is to refer a potential client only.
You do not need to sell any products or services by yourself. If your referred person gets converted into a client of the company, you receive the money.
List of Major Sub Broker Franchise
Benefits of becoming a Sub Broker or Authorised Person
There are various benefits of becoming an Authorised Person or Sub Broker of a stockbroking house –
- The first benefit that you need to look at while opting for a sub-brokership business is the potential of earning a high revenue share. The franchiser keeps the lower amount of revenue while giving away the major portion to the franchisee.
- The franchisor provides marketing and training facilities and support to the franchisees. Whether it is about marketing techniques, or ideas and different training like products and acquisition training, everything is provided by the franchisor.
- Franchisor comes up with various offers on services and products they offer which benefit the franchisee. For example, a discount on brokerage or new limited period services to attract clients. These offers are passed to the clients by the franchisee and they can avail the benefit.
- Sub broker franchise business in India can be started with very low capital. This further helps many franchisees to become a business partner of stockbroker houses without spending a huge amount. The minimum investment can be Rs. 50000 in case of sub broker’s role and lower as well.
- Advisory services are also offered by the franchisor and this benefits the franchisee. As the latter also offer the same to the clients and can easily convince clients.
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How to Become a Sub Broker or Business Partner?
To get the Sub Brokership rights you need to –
- Apply with any trading member for their business partner’s position.
- The application process is online.
- You have to fill in all your details.
- Submit the documents required for sub-brokers registration.
- Mandatory documents are PAN, SEBI registration certificate, NCFM certificate, AADHAAAR Card and other details and documents.
- If you are eligible for the position, you will receive a call from the stockbroker house.
- They will help you further with the application process according to their rules and regulations.
Eligibility Criteria for Sub Broker or Authorised Person?
The eligibility criteria that a sub-broker franchise needs to fulfill are –
- Educational qualification must be at least 10+2.
- Financial product knowledge is a mandatory need.
- Knowledge of basic computing.
- Communication skill is primarily needed and convincing power.
- Apart from financial product knowledge, the sub-broker needs to be aware of the economy and market condition.
- He / She or she must have cleared the NISM examination for sub-brokers.
- He / She or she needs to be an Indian Citizen.
- As per SEBI, Limited Liability Partnership firm needs to be registered under Indian Limited Liability Partnership Act 2008 for this business.
List of all other Stock Broking Franchise
Sub Broker / Business Partner Conclusion
Broking Franchise business is a lucrative earning opportunity. It is rapidly capturing the Indian market.
With the boom in the stock market and investments coming from different segments, it is the right time to get into sub-brokers franchise business.
All Sub Brokership Providers in India
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