Benefits and Challenges of an Authorised Person in Stock Broking
Written by Subhasish Mandal
Published on December 24, 2025 | 2 min read
If you are someone who loves the stock broking business and wants to start your own, but does not have sufficient funds. Then, there is another way to enter in this field by becoming an Authorised Person of an existing stockbroker. In this guide, we will highlight the benefits and challenges faced by an Authorised Person.
Who is an Authorised Person in Stock Broking?
An Authorised Person (AP) in stock broking is an individual or a firm acting as an agent of stockbrokers. Their work is to bring new clients, facilitate buy/sell trade and provide guidance to new investors. However, they do not directly deal with clients' funds or shares kept in demat accounts.
An AP works completely under the supervision of SEBI-registered brokers to earn commissions for their services.
Before discussing APs, let’s just get a brief overview of sub-brokers. Sub-brokers are also individuals or entities that act as intermediaries between investors and SEBI-registered stockbrokers. They also offer investment guidance to clients and encourage them to invest more. In return, they receive a small portion of the brokerage generated by them.
In 2018, SEBI discontinued the new sub-broker registration. From 2019, SEBI mandated all previous sub-brokers to be an Authorised Person to carry on the business.
In short, we can say that Authorised Persons are similar to sub-brokers. APs play a central role in the financial system by expanding the network of stockbrokers.
Who Can Be an Authorised Person?
Anyone who is interested in the stock market and has a basic understanding of how brokerage businesses operate can be an AP. Some important skills required to succeed:
- Knowledge of stock market terminologies.
- Good communication and negotiation skills.
- Good at sales and convincing clients.
To know how to become an Authorised Person, click here
Benefits of Becoming An Authorised Person
Individuals opt to become an Authorised Person due to many benefits:
Low Initial Investment
To become an authorised person, an individual is required to pay a nominal security deposit to the stockbroker. It's affordable, compared to the fees and infrastructure required to start a SEBI- registered stock broking business.
No Infrastructure Required
An Authorised Person can operate from their home, as the work can be managed online. A trading platform is already available, which is provided by the stockbrokers. APs only have to convince clients to trade.
Flexibility
APs work as independent professionals under the supervision of a stockbroker. They are allowed to work on flexible hours and can schedule the work timings as per their needs.
Scalable Business
This business can be easily scaled just by adding more clients. The business can operate in autopilot mode, and when acquired, clients keep turning into active traders in the markets.
High Earning Potential
Earning potential depends on the number of clients acquired and how many are actively participating in the market. If acquired clients are mostly active in the F&O segment, then brokerage generation continues, and commission numbers increase over time.
Access to Training
Many stockbrokers conduct offline training events or webinars to provide market information to the stakeholders. It helps authorised people to be updated with the new products and features that stockbrokers are planning to offer clients.
Challenges of An Authorised Person
There are a few challenges which constantly faced by the Authorised Person in the industry:
Client Retention
The biggest challenge for an Authorised person is to retain the existing clients. In this business, clients can easily switch to other stockbrokers overnight.
High Competition
The competition in the stockbroking industry is very high. As discount brokers and full-service brokers are constantly bringing new products.
Market Downtrend
At the time of a downtrend in the overall stock market, clients hesitate to invest money, which may directly impact the profitability of a stockbroker, resulting in fewer commissions.
Starting an Authorised Person business is easy, but running it for a long-period requires significant effort. The commission model is good and profitable. However, to scale AP's business model, time-to-time upgrading of knowledge and sales techniques is important.
About Author
Subhasish Mandal
Sub-Editor
finance professional with strong expertise in stock market and personal finance writing, he excels at breaking down complex financial concepts into simple, actionable insights. Holding a Master’s degree in Commerce, he combines academic depth with practical knowledge of technical analysis and derivatives.
Read more from Subhasish
Upstox is a leading Indian financial services company that offers online trading and investment services in stocks, commodities, currencies, mutual funds, and more. Founded in 2009 and headquartered in Mumbai, Upstox is backed by prominent investors including Ratan Tata, Tiger Global, and Kalaari Capital. It operates under RKSV Securities and is registered with SEBI, NSE, BSE, and other regulatory bodies, ensuring secure and compliant trading experiences.
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