How Authorised Partners Earn: A Simple Guide to Commissions

How do Authorised Partners Earn?

While authorised partners cannot give investment advice unless registered for it, they earn primarily by opening new accounts and helping clients with the intent to make them trade more. Let's understand their earning model.

Brokerage Sharing

This is most common way authorised partners earn it through brokerage sharing. When an investor trades in stocks, derivatives or currencies, the broker charges a brokerage fee. A part of this brokerage is shared with the authorised partner. For example, if a client introduced by an authorised partner trades regularly, every trade generates brokerage for the broker. The broker then shares a fixed percentage of that brokerage with the partner. This creates a long-term income stream, especially when clients remain active in the market.

Commission on Account Openings

Some brokers also offer a fixed commission per account opened by the authorised partner. This means the partner earns money when a new demat and trading account gets successfully activated through their reference. This income is useful for partners who focus on onboarding new investors, such as beginners or people in smaller towns who need help in stock market investing. Over time, these accounts may also generate brokerage income, a part of which is then shared with authorised partner.

Earnings Through Referral Links

Many authorised partners earn using referral links provided by the broker. These links are unique for each partner and track which clients were referred by the partner. When someone signs up and trades through the referral link, the partner gets credit for that client. Referral links allow partners to earn online without meeting every client personally. Partners can share these links through social media, websites, blogs or WhatsApp and this helps a lot in scaling up the business.

Support-Based Income Model

By providing ongoing support to clients, authorised partners often build good and sustaining relationships. This includes helping with account-related issues, explaining how trading platforms work or guiding new investors through basic processes. As client activity increases, brokerage income also grows. This makes client service an important part of earning as an authorised partner.

SEBI Rules on Earnings

SEBI has clear rules to protect investors. Authorised partners cannot collect money directly from clients or charge them fees. All earnings must come from the broker in the form of commission or brokerage sharing. This ensures transparency and builds trust in the system. The broker is also responsible for the authorised partner’s conduct, which adds another layer of safety for investors.