Check this article for detailed Benefits & Challenges of Sub Broker Franchise in India.
The financial industry has seen unprecedented proliferation, all thanks to the stock market and its robust performance.
Also, many individuals with entrepreneurial dreams have chosen the path of sub-broker franchise. While there are various vital roles in the stock market industry, being a sub-broker is on another level.
As an industry newcomer, you might want to learn about the possible benefits and challenges a sub-broker faces in this model. If so, this article is exclusively for you.
What is the Sub Broker Franchise model?
In the sub-broker franchise model, the sub-broker works as an agent for online brokerage firms or discount brokers to vend their products and services to the clients.
The sub-broker receives a commission from the brokerage firm for every successful trade the client performs.
Also, a sub-broker gains access to the stockbroker’s diverse product range. Sub-brokers can also use the stockbroker’s brand name and resources to move forward with the business effortlessly.
In establishing a sub-broker franchise, you are responsible for guiding clients and assisting them in making wise financial decisions.
Being a sub-broker is not just about selling products and services to clients; it is also about offering them clear insights into fluctuating markets, advisory services, trading information, etc.
To grow and sustain in this competitive business sector, the sub-broker must learn to adapt to new technologies and strategies in the finance market.
Also, putting the client and his needs above everything and offering them personalized services can help sub-brokers create strong relationships and foster client loyalty.
Though sub-brokers enjoy a set of benefits to boast about, they also face certain challenges during their journey.
Benefits of Sub Broker Franchise
Sub-brokers can indulge in many advantages by being a part of a sub-broker franchise. Here, we have discussed some of the benefits for you.
Economical Initial Investment
Starting an entrepreneurial journey is as easy as pie with a sub-broker franchise. With a very economical initial investment, you can start a business in your name under the umbrella of prominent stockbrokers.
With almost negligible investment, you can start a sub-broker business. If you love to debut into the financial world but lack a decent amount in hand, this is an ideal business for you to start.
Generous Earning Opportunities
As we said earlier, the sub-broker will receive a pre-defined commission for every successful trade carried out by the client on the stockbroker’s platform.
If the sub-broker pulls off more active clients that perform frequent trades, there is a huge scope for generous earning opportunities.
In short, the commission earned is directly proportional to the client’s number of trades. Furthermore, most stockbrokers in the market offer 50% or more revenue sharing to sub-brokers.
Access to Free Resources
Sub-brokers tie up with stockbrokers and get free access to resources like trading platforms, training, support, research aid, etc.
As these resources are free, sub-brokers can pay more attention to providing tailored services to clients to maintain client retention.
Also, sub-brokers receive training on various aspects from the stockbroker, such as client acquisition, client servicing, client retention, trading, etc.
Stockbrokers also assist the sub-brokers in every way possible to run the business smoothly. Sub-brokers can also market their business using the stockbroker’s established brand name.
Continuous Learning
Sub-brokers have to keep up with marketing trends, for which continuous learning is necessary.
They have to keep track of the latest trends and fluctuations in the market, as the markets are often subject to market risks.
Having a better understanding of the strategies and markets can help sub-brokers assist clients in better trading.
Also, sub-brokers learn a lot from the stockbrokers and the webinars and training sessions they conduct. With these sessions, sub-brokers evolve as better business people with excellent knowledge to spread.
Make Entrepreneurial Dreams True
Another benefit of being a sub-broker is that they can quickly fulfill their entrepreneurial dreams through this sub-broker franchise business.
Yes, they have complete flexibility to do the work the way they want. There is no one to ask them or pressure them over how to perform the job.
They can take the business to the next level with their effort and hard work. You can be your own boss and stand out in the crowd by offering trading services to the circle of your clients.
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Challenges of Sub-Broker Franchise
Similar to benefits, many challenges come with sub-broker franchises.
Huge Competition
The sub-broker franchise business is full of challenges; the first is the vast competition.
With the rising stock market awareness, many entrepreneurs are looking at the sub-broker business as a potential career, which has further increased the competition.
To stand out in the vast competition, the sub-broker has to keep something unique about his business to attract clients.
To stay in the competition and make a name, the sub-broker must keep the clients returning by providing personalized services.
Lack of Financial Knowledge
Though the stock market is one of the top-performing investment options, many people still lack knowledge about it.
Many individuals who lack financial knowledge still consider online trading a mischief. This is a major challenge that most sub-brokers face in the industry.
Sub-brokers are bound to educate clients on the stock market, its risks, and more. They should be ready to handle both novice and experienced clients.
Educating and guiding them to make the right investment decisions is a big challenge for the sub-brokers.
Market Fluctuations
All the stockbrokers promote their products on a high end, but at the same time, they never forget to say the disclaimer that the stock market is subject to market risks.
A considerable risk is involved in the trading industry; only a knowledgeable person can understand and handle the risks seamlessly.
The fluctuating markets can directly impact the commissions of the sub-brokers as the trading almost halts when the stock markets hit rock bottom.
Client Acquisition and Servicing
With so much competition from different stockbrokers, acquiring new clients and offering them satisfactory services is difficult. Moreover, it is seen as a big challenge by most of the sub-brokers.
While acquiring the clients is considered difficult, keeping them intact and maintaining retention is another level of difficulty.
The sub-brokers must continuously work on bringing new clients and offering them suitable services to keep them coming back.
Sub-brokers must stay up-to-date with the latest trading strategies, tips, investment activities, etc., to provide on-the-point services to their clients.
You must be a Tech Geek
To stay ahead of the competition and maintain the client base, the sub-broker needs to stay updated about the latest technology.
The sub-broker must learn to adapt the latest technologies, applications, tools, etc., launched by the stockbroker to make things easy for the clients.
In short, technology is meant to simplify things, and it should be appropriately conveyed to the clients.
Benefits & Challenges of Sub Broker Business – Conclusion
Well, this is all about the benefits and challenges of sub-broker franchise.
While the sub-broker franchise business is an emerging career prospect, the sub-broker must be aware of these benefits and challenges to decide whether he can pull off the right strings or not to make the business work.
With generous earning opportunities, free resources, and continuous learning, a sub-broker can make sub-broker business an attractive career option.
Though the competition is high and the markets tend to fluctuate often, if you are confident that you can take risks, you can turn a sub-broker franchise into a potential professional avenue.