Choice Sub Broker - Benefits of a Stock Broking Franchise

Stock Broking franchise means being a sub broker.

The lull in 2020 saw a renewed interest in the stock market. Although, investors have always been trading and investing in the stock market, 2020 was quite a tipping point in terms of the number of people joined and invested in the market. There are tremendous opportunity as a large population of India is till underserved.

The industry has certainly changed over the years. Technological advancements have led to digitization of most of the services that were previously paper-based. App based transactions are very quick and popular, you can have your account opened in 10 mins and be trading in the next 10!

In this article, we will look at the Sub broker and what are the benefits of being one,

Who is a Sub broker?

If the broker is a parent organization then the sub broker is the one promoting the broker’s essential service offerings. The sub broker is sort of an intermediary between the customer and the broker. The stock broker is an intermediary between the exchange and the client but the Sub broker is between the client and the broker, the benefit? Sub broker is your local ‘go to’ guy and is in the vicinity.

The sub broker essentially has to increase the broker’s revenue and for the same he acquired clients and offers the stock broking and investing services. Sub broker revenue is the revenue-sharing terms discussed with the broker, so basically he received handsome commissions against the increase in revenue.

What’s the difference between a Sub broker and Stock broker?

The key differences between a Sub broker and Stock broker are,

• The biggest difference is the Stock broker has to be a licensed trading member of the stock exchange, which is not the case with sub brokers. This is not to say that sub broker does not need any certification, they do require a ‘Certification of Registration’ from SEBI to be in business
• One more notable difference is that the broker earns his revenue via brokerage fees, whereas the sub brokers are paid commission on the revenue they bring.  As registered trading member of the stock exchange only broker are allowed to charge brokerage fees to their clients and sub broker can’t do that. The broker gets brokerage for every transaction the client makes and sub broker get commission. 

What the primary benefits of being a Sub broker?

The key benefits of being a Sub Broker are as below,

• The best benefit of being a sub broke is working with the broker as a franchise you can get tremendous knowledge of the how the markets function. Since you are an integral part of the brand; you get hands-on information about the financial markets. This is immensely beneficial.
• The second key advantage is you don’t have to do huge investments that a broker needs to do. Get licenses, manage a huge team and run the entire cycle, none of that for the sub broker, you simply need to have your own small space and start
• You can also provide subsidiary services to your clients like mutual funds, portfolio management services, loans, insurance and for everything the broker is there to assist you with a dedicated team
• Broker assists the sub broker in terms of marketing, trainings etc as well

Summary

The Sub broker’s role is critical and has recently become even more important with the rise in demand of investments. The broker is in-charge of carrying out investments and getting the required permissions, the sub broker just needs to get clients. Select a reputed broker like Choice Broking and get started on a fulfilling career as a Sub Broker!