In the Stock Market, an ‘Authorised Partner’ acts as an intermediary between clients and stockbrokers. Here are some key factors to consider if you want to start a sub-broking business in India.
The Indian Stock Market attracts numerous investors due to its potential for significant gains and wealth-building opportunities. Making wise investment decisions and executing trades promptly are essential for success in Stock trading. Given the complexity of these decisions, which require a deep understanding of the markets, investors often seek the expertise of brokerage firms and Authorised Partners.
Authorised Partners play a vital role in assisting investors by providing valuable insights, executing trade orders, and helping them make well-informed decisions. They operate under the affiliation of a brokerage firm, ensuring that clients receive professional guidance and support.
What is sub-broking in India?
In the Stock Market, an Authorised Partner serves as an intermediary between clients and stockbrokers. They help in the purchase and sale of securities. However, they do not have direct access to or membership in the Stock exchanges. Instead, sub-brokers handle transactions and offer investment advice while working under registered brokers.
Starting a sub-broking business can be highly lucrative. With the right strategies and operations, you can earn commission earnings ranging from several lakhs to a few crores each month.
Eligibility to become an Authorised Partner/Start a sub-broking business in India
- Educational: An Indian citizen who is at least 18 years old and with no prior convictions for fraud or dishonesty is eligible to be an Authorised Person. At the very least, you ought to have passed the 10th standard or an equivalent exam from an accredited institution
- Knowledge of financial markets: You should be familiar with financial markets through prior job experience or learned information. You need to understand and manage basic financial transactions
- Understanding of political and economic factors: Since these variables impact the Stock Market, it’s important to keep up with the most recent information on the economy, and political situations. You ought to be up to date on both domestic and international events
- Computer proficiency: To handle transactions and maintain data efficiently, you should be skilled at using computers
- Communication skills: Effective communication with clients is essential. You should be able to clearly and efficiently convey information and work well with clients
- Management Skills: Authorised Partners must excel in management. Efficiently handling finances, labour, market trends, and other resources is crucial for success
- Completion of NISM Modules: You must pass the basic NISM modules on stocks, mutual funds, commodities, and F&O to meet regulatory standards. Clearing these modules is a prerequisite to starting an Authorised Partner business
- SEBI Registration: You need to register with SEBI, the market regulator, before starting a sub-broking business
How to start and manage a sub-broking business?
- Choose your broker carefully: Focus on partnering with a knowledgeable and reliable broker, not just one that offers high revenue sharing. Value addition should be your main criterion
- Full-time dedication: Being an Authorised Partner isn't a side job. You need to commit fully to avoid missing opportunities and ensure success
- Offer diverse services: Clients expect comprehensive advice, not just help with equity transactions. Be ready to provide guidance on various financial products like mutual funds, stocks, commodities, currencies, PMS, and AIFs
How to grow and expand your business as an Authorised Partner?
- Grow your clientele: Reach out to people in your current network. Use social media to find potential investors and build a strong client base
- Client involvement should be your first priority: Regularly attend meetings with current and potential clients to build relationships, understand their needs, and create new business opportunities
- Provide prompt updates: Email clients on a regular basis about investment opportunities, market developments, and regulatory changes to foster trust and keep business growing
- Build a strong network: Participate in industry networking events to learn about current trends, expand your professional network, and gain more referral business
- Make an investment in lifelong learning: Stay current with market changes by participating in SEBI’s investor education programs, attending broker training sessions, and keeping up with market news to establish your credibility
Achieving success as an Authorised Partner requires dedication and effort. Knowledge is the cornerstone of success in this journey. Continuously seek to expand your understanding of the industry, and invest in training for both yourself and your team to enhance the services you provide.