How to Win with Introducing Brokers

For forex brokers, partnerships with Introducing Brokers (IBs) or Futures Commission Merchants (FCMs) can be an essential aspect of their business. As we’ve written previously, IBs are extremely helpful for recruiting and supporting traders, and the rapport they build with clients directly impacts trading activity and retention for the broker they’re working with. 

What IBs need from their broker

An IB is usually an individual who operates like a freelancer or contractor making a commission off their clients’ trading activity. Licensing requirements for IBs vary by jurisdiction, but they can work from anywhere in the world and serve their broker effectively as more localized, personal customer service (especially in new or unfamiliar markets for the broker).

For brokers interested in expanding their IB program or looking to start a new one, essential offerings IBs will expect include:

Top-notch platform & software

First and foremost your brokerage’s trade experience and customer service must stand out – the same ideas that apply to marketing directly to prospective traders are true for IBs, too. An IB vetting a broker for partnership will want not only plenty of instruments and access to widely-used trading platforms, they will need an excellent client portal for their traders and streamlined data/reporting tools in a forex CRM.

Since IBs effectively manage their own small business in partnership with/on behalf of the brokerage, the brokerage’s digital client experience is critical to an IB’s success. Offering IBs management tools like a forex CRM enables their – and your – success.

Competitive compensation & rebates

Whether you’re starting or expanding an existing IB program, this is where conducting market research and knowing your competitors’ offerings will be helpful. Broker payouts are consistently an IB’s biggest operating expense, and attractive rebates (specific to signing on with an IB) are a main reason traders choose to work with an IB instead of a brokerage directly.

With this in mind, try to incentivize and reward IBs with a commission or fee structure more generous than your competitors’, or at least create deposit and trade incentives exclusive to IB clients that make it easier for IBs to nurture and retain traders.

Sales & marketing support

How an IB prospects and interacts with their (and your) clients may vary, but clear marketing guidelines, ideas or resources from your brokerage will help win new business from both traders and IBs. A CRM is indispensable for helping partners like IBs launch and track email campaigns, segment and mentor their clients, and identify potential areas of growth – especially if they’re working in a specific locale or financial instrument.

Additional supports like sales/marketing online courses or even well-produced firm onboarding (for IBs themselves, or for IBs to share with their clients) can go a long way for everyone’s success.

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