If you’re in the business of marketing and selling financial products, partnering as an Introducing Broker can be a great way to extend your reach and grow your business. As an Introducing Broker, you’ll be able to offer your clients access to a wider range of products and services, while still maintaining control over the relationship.
What is an Introducing Broker?
The role of the Introducing Broker in the foreign exchange market is crucial. Because of the close connection, they maintain with their clientele, they are able to provide all the advantages associated with dealing with a Forex Broker.
Introducing brokers are focused on customer relation and customer support, many times being the liaison between the trader and the broker.
What are the roles of an Introducing Broker? (Forex IB)
The Introducing Brokers can have different roles depending on how involved they want to be on the trading adventure of their client base. If they want a more active and involved role, Forex IB’s can educate and maintain their trader base informed about forex and financial market news. They can provide platform training, live trading sessions, and weekly or monthly market updates to help their traders have a more profitable trading experience.
If you as an Introducing Broker want to take on a more passive and less involved role you can just suggest a forex broker to your clients. That way you make sure your clients are in the right hands without having to get involved in any of the Forex Training and market analysis.
Who can be an Introducing Broker?
Many newcomers to the foreign exchange market are unfamiliar with the function of introducing brokers. They are not blameless, however, because the majority of descriptions of this topic provide only basic information about how futures and forex trading work and why you would want one as your partner when it’s time to make significant financial moves in London, Zurich, Hong Kong, or Frankfurt.
It is also quite complex as there are differences between Introducing Brokers for an International online forex broker and Introducing Brokers for a large bank or classical financial brokerage. For classic brokerages, the IB has a more technical role, but for Online brokers such as Mugan Markets, IBs take on a more customer support and educational role.
- Becoming an IB If you have a financial website: If you own a website where you post financial news or market analysis, becoming an IB is the best way for you to monetize that traffic.
- You are a financial influencer on social media: Trading Forex is not a simple undertaking, and many users follow accounts for tips, trading signals, and general market information. If you operate a forex or cryptocurrency Instagram or Facebook group, you’ll want your followers to use a reputable broker. Being an IB for Mugan Markets is the best way to ensure that your followers are in good care!
- You own a forex YouTube account: Market analysis takes a long time, and many traders do not have the time to make weekly analyses of the forex market. If you are an experienced trader and own a YouTube account where you help traders with forex analysis or market news using Mugan Markets as your trusted platform is the perfect way to add to your monthly revenue.
- If you offer Trading Signals on Telegram or Whatsapp: Trading signals are useful for traders to get secondary inputs and opinions on when to enter a trade. These signals can be useful to identify trends and profit from these movements. For your followers and clients to enter quickly in the market and profit as much as possible from these signals you need a broker partner that will place the trades quickly. Mugan Markets is the perfect broker to use.
For this reason, IBs are often the best way to get introduced into an industry without risking too much money. They can help beginners learn about what it takes and give them a chance at experiencing all that trading has in store for experienced professionals, like yourself.
How do Introducing Brokers make money?
There are various ways for introducing brokers to earn money, and it mostly depends on the market the IB is focusing on. IBs make money based on the commission charged by the broker for every successful trade made by clients. Introducing brokers receive a portion of that trade placed through the Forex Broker.
The Benefits of becoming an IB
1. Commissions. How much do Introducing Brokers make?
Some brokers pay 60-70 percent of the spread, also known as pip, that is charged to traders. Positively, if IBs have an increasing number of traders under them, their revenue will also continue to increase. Some Introducing Brokers are sole proprietorships, while others are major organizations that know how to train and educate their traders so that their portfolios and accounts continue to grow.
If IBs manages to offer great customer service, they will also be able to create a good relationship with their traders, making it a win-win situation for all. For example, if you refer 100 forex traders to Mugan Markets and the spread charged to the trader is 10 pips = $10 you would be making $6.000-$7.000 a month.
If you grow the list of traders you referred to Mugan Markets to 1000, then you would be making 10 times as much, $60.000 a month!
2. Volume-Based Rebates
Introducing Brokers are paid every time a client makes an exchange. Some of these professionals will offer you back some coins for each trade made with them, which is called “rewards” or rebate programs in this industry.
By nature, the foreign currency market has a high trade frequency per dealer, so even minor refunds quickly build up at the end of the month. As a result, if you trade in larger volumes, you will find it easier to negotiate higher rebate rates because, either way – tighten spread or preserve capital – these are free cash obtained with every transaction.
Benefits of having an Introducing Broker when opening a live account with a Broker
1. Value-Added Services
If IBs are able to provide excellent customer service, they will also be able to foster positive relationships with their traders, creating a win-win situation for all parties involved. For instance, if you recommend 100 forex traders to Mugan Markets and the spread charged to the trader is 10 pips = $10, you will earn between $6,000 and $7,00 each month.
On the foreign exchange market, IBs are commonly viewed as middlemen, however, they are not permitted to interfere with your trade or hold onto customer funds. This means that if you use an introducing broker then there is a higher chance for success on transactions outside of Europe.
2. One more layer of dedicated support and Forex Education
Starting your forex trading journey can be tricky and confusing. Forex brokers are just the platform you use to place trades onto our liquidity provider and enter the market. Mugan Markets does offer 24/7 support, but we are not a trading school.
Forex IB’s can be very useful to cover that role, technical terms such as Bid Size, Leverage etc can be explained by your IB, making your trading easier and more manageable at the beginning.
Qualities of Online Broker that IBs should look for
IBs are local businesses that provide better customer service due to their proximity. They also have a special knack for knowing exactly what each client needs, making them stand out in comparison with larger firms which may not be as personalized or able when faced with such requests from numerous clients on an everyday basis.
With as many brokers as there are, it is important to have some things in mind when deciding which will benefit from your network.
Adaptable commission structures that can be tailored to the Introducing Broker’s business strategy and satisfy both his immediate and long-term objectives.
A broker with good customer support. It is crucial that communication with the broker is prompt and dependable! You will be the one to contact it for any questions, concerns, or administrative tasks.
Flexible payout options. When it comes to getting your commissions, a fast and reliable broker is of utmost importance. Can you get paid monthly or weekly? Also, how will your commissions be transferred to you? In this day and age, crypto transfers are the fastest, we offer that at Mugan Markets!
The sky’s the limit when it comes to business success with personalized dedicated support, customizable reporting, advanced trading tools, and expert affiliate marketing advice from IB professionals.
If you want to try our FX platform before becoming an IB, go ahead and open a live FX account first!