Authorised Partners earn through a commission model. The Authorised Partner gets paid when the client conducts a trade through the brokerage. The Authorised Partners are paid a certain percentage of the total brokerage paid by the client to the broker.
Investing money in the Stock Market has been gradually emerging as a popular alternative for those who want to accumulate wealth through equity or equity linked investments. Even as awareness has increased about the stock market, many people face confusion on how to start investing in stocks. Here, the Authorised Partners play an important role.
They help prospective investors by acting as intermediaries between them and the stock brokers. Authorised Partners earn money on each transaction the investor and the stock-broker conduct.
Let’s us take a look at how you can also become rich by becoming an Authorised Partner:
Requirements For Becoming An Authorised Partner
The money required to become an Authorised Partner is a lot less compared to many other businesses. The minimum investment to become an Authorised Partner is about ₹1 Lakh, this amount can be subdivided into these categories:
Security Deposit
Authorised Partners need to pay a security deposit to a stock broker to become a stock broker, this amount is refunded once the agreement between the Authorised Partner and broker comes to an end. While the amount paid as security deposit varies across different brokerages. It usually ranges between ₹50,000 to ₹2 lakh. The minimum security deposit typically amounts to ₹50,000.
Registration Charges
The second cost which Authorised Partners incur is the money they need to pay to the Securities Exchange Board of India (SEBI). To register with the SEBI as an Authorised Partner ₹11,000 needs to be paid as a fee.
Now that you are familiar with the requirements to start working as an Authorised Partner, here how you can earn through this role:
Authorised Partners earn through a commission model. The Authorised Partner gets paid when the client conducts a trade through the brokerage, the Authorised Partners are paid a certain percentage of the total brokerage paid by the client to the broker.
Let’s consider a hypothetical case study to understand how this revenue model works:
If Authorised Partner A has a 200 client strong network of clients, out of which 10% are actively trading, then the authorised person will be paid a percentage of money out of the brokerage charges which the 20 traders incur for trading in the form of brokerage fees.
If ‘A’ has a 50% revenue share percentage and the 20 active traders generate ₹1,000 as brokerage per client, A will get ₹500 from each client. This will then amount to ₹10,000 in a day and will total to ₹22,000 in a month (₹10,000 x 22, as the markets are closed on weekends).
How to increase your wealth as an Authorised Partner
The wealth of an Authorised Partner is directly linked to how big his or her client network is. To effectively increase your earnings you need to grow your network by working on your communication, pitching, and client servicing facilities. Since there is no upper limit on the income you generate in this profession, the more effort you put in, the more you can earn.
Providing your clients with financial advice such as daily stock market updates and suggestions, will eventually increase the brokerage earnings by the main broker and help you earn more commission.
Another factor which can majorly influence your earnings as an Authorised Partner is the brokerage/stock broker you work for. If you work for a new stock broking house you might need more time to convince traders. Another factor which can influence the money you make is the percentage of brokerage you are given by the broker.
Conclusion
Becoming an Authorised Partner is a good way of making money and the brokerage/stock broker you choose can change how much money you make. However, the ability of the authorised person to make money depends on their own skill and their knowledge. By partnering with a reputed brokerage you’ll earn brokerage commission for a lifetime through referrals and revenue-sharing model. By
partnering with us, you’ll earn brokerage commission for a lifetime through our referrals and
revenue-sharing model.