In recent times everyone has been fascinated by the stock market. Especially after a covid pandemic, retail traders are attracted toward the market.
We know that we can make money through buying and selling securities in the stock market. But not that we can also create good capital through starting our own broking business.
But some problems there are to start broking house, we need a lot of documentation, registration, and a lot of initial capital. I know most people can’t afford these requirements.
So the solution to this problem is you start a sub-broking (Authorised Person) business. But How to become a Sub Broker? This guide ultimately helps you set up a Sub-broking franchise.
First, we learn what Sub-broker is and how they work?
Table of Contents
What Is Sub-Broker?
Sub-Broker is a person who assists investors in dealing with buying and selling securities on the bourses. Sub-broker is not a trading member of the stock exchange, but he helps stockbrokers deliver services to the clients.
The primary role of Sub-broker is to provide the best marketing suggestions to its clients. He keeps them updated with the latest marketing strategies by attending various events and seminars.
Now that you know who a sub-broker is let’s look at how to become a sub-broker.
How To Become A Sub Broker?
to become a sub-broker, you need to follow below steps:
- choose the best sub-broker Franchise
- check the eligibility criteria
- submit Sub broker registration form with relevant documents
- pay processing fee
- After registration, you will receive a sub-broker registration certificate from SEBI and a registration number.
Now that you know which steps to become a sub-broker, we will discuss all points shortly.
Who Is the Best Sub-Broker Franchise?
There are hundreds of brokers who want to give you a broking franchise. But all not the same, there are many differences in their franchise model.
Some brokers give training seminars and educational materials, but some provide not. Some offer a high commission, and the broker offers a nominal commission.
So it would be best if you analyzed each broker on your behalf. The following points help to choose the best Franchise
- Better revenue sharing
- History and reputation of the broking house
- Total cost to start a franchise
- Offline and online presence across the country
- Excellent customer service
- Maximum proclamation of leverage
A full-service broker is the best option for a sub-broker franchise if you want our recommendation.
What Are Eligibility Criteria For Sub-Broker?
the eligibility criteria for Sub-Broker franchise are:-
- Should be 21 years of age or above
- Minimum Qualification of H.S.C. (10+2)
- Good Knowledge of the Financial Markets and Economy
- Awareness Of How Market work
- Should not be a defaulter in any other stock exchange
If you fulfill all the given eligibility criteria, you can be a sub-broker.
Required Document For A Sub-Broker Franchise
Accepted proof of address documents is listed below.
- pan card (mandatory)
- Latest telephone and electricity bill
- Valid proof of identity (aadhar card)
- Valid driving license
- Bank statement of the previous month
- Evidence of experience certificate. (Only in cases where the applicant’s qualification is lower than H.S.C.)
Note: P.A.N. card is mandatory for a sub-broker franchise. If you don’t have a pan card, then you can not apply
collect all these documents before applying for registration.
Security Deposit And Registration Fee For Sub Broking Franchise
Security deposit is charged to make up for any nonpayment or delay in payment during the partnership. The deposit amount is refundable, and it implies that the money is returned to the person when he wants to quit the partnership model.
Usually, this Fee is between ₹25k to ₹3Lakh. But some brokers did not ask for a Security deposit; usually, these are discount brokers.
Besides the security deposit, a one-time registration fee is also needed. Generally, the registration fee is not that high this Fee is between ₹2k-10k, and these fees are non-refundable.
Benefits Of Becoming A Sub Broker (Authorised Person)
If you decide to start a sub-broking partner with a stockbroker, you get the following services.
- Grow your own business with the help of a reputed brand name.
- Higher revenue sharing ratio. That helps make more profit whit less investment.
- Advanced tools and technology.
- Stockbroker helps from time to time to their sub-broking partner where needed.
- Seminars and other events help to grow entrepreneur skills.
Sub-Broker Franchise F.A.Q.s
How Long Does It Take To Become Sub Broker?
if you have sufficient entrepreneurial skills and you full fill all requirements, then it takes 10-15 days to become an Authorised Person
How Much Do Sub Brokers Earn?
Sub-broker income would depend on the percentage of brokerage of their clients. Generally, a commission of Sub broker is between 50 percent and 70 percent. Pay also depends on how much brokers charge brokerage.
How Much Time Tech To Make Good income From Sub-Broking Business?
It all depends on how much entrepreneurial skill you have and how many clients are acquired. But usually takes 1-2 yere to make a good income from the sub broking business.