Can a Sub Broker Business make you Rich?

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The development and growth of any economy are closely linked to its stock market. Even when the world is panicking about a recession, India is one of the safest places and growing amidst all the crises.

In 2023-24, the country’s growth rate is expected to be around 6.4%, which suggests growth in the stock market too.

If you take a close look at the Nifty 50, one of the country’s most popular stock market indices, you can understand how fast the markets are growing.

The nifty 50 has also doubled in just five years, which mirrors the stock market.

Given this, entering the stock market as a sub broker can be more beneficial because investors and traders need sub brokers support for their business.

Can a Sub Broker Business make you Rich?


How much do you need to invest in becoming a sub broker?

So, to start any business, you need to invest some capital in it, and the sub brokers business is no exception.

However, the amount you need to start the business is very less compared to other businesses mostly.

Initially, you can start a sub brokers business with just around Rs. 1 lakh. The cost can be broadly divided into three categories –

Security Deposit

This is the amount you need to pay to the stock broker you are joining as the sub broker or from whom you will work as the Authorised Person.

You need to deposit a certain amount which will be refunded when you end the agreement with them.

Now the security deposit varies from one stock broker to another. However, the average security deposit in India for sub brokers business is around Rs.50000 to Rs.2 lakhs.

The minimum security deposit can be Rs. 50000 to help you start your business.

Now you can also increase the security deposit because the share of revenue depends on the security deposit amount with the stockbroker.

So, later in the business, if you feed, you can deposit more, then it is better to opt for the same as it will help you earn more.

Registration Charges

The second cost you must bear is the registration charges with SEBI and stock exchanges. It approximately cost around Rs.11000 at present.

Infrastructure Cost

For every sub broker, having an office premise is mostly a compulsion as they need to offer dealing support, research, and advisory support to the clients.

Thus, apart from the registration charges and the security deposit, you also need to invest in the infrastructure to set up the office premise.

This cost completely depends on how you decorate the office and what amenities you want. However, if the stock broker has certain criteria, you need to match them up.

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Earning Potential of Sub Brokers in India

Now that you know how much you need to start a sub broker business in India, let’s talk about how much you can earn.

Sub brokers get a commission based on their client’s brokerage. This means the client you bring to the main stock broker, when trades on the trading platform of the broker, pays a certain brokerage to the firm.

Now, sub brokers get a certain percentage out of the total brokerage paid by the client to the broker. The average share of revenue that sub brokers get ranges from 50% to 70% in India.

However, there are certain exceptions, but this is what most of the renowned brokerage houses pay to their sub brokers.

Example on Sub Brokership Revenues

Let’s understand this with an example. Suppose you have a clientele of 200; out of this, let’s assume the active traders constitute 10% of the number.

So, 20 active traders are there who generate some brokerage for the main broker daily, and thus you also get a share of it.

Suppose your revenue share percentage is 50%, and daily let’s assume the active traders generate Rs. 1000 as brokerage (each client).

So, your share will be Rs. 500 for each client. Now Rs. 500*20 = Rs. 10000 in a day which you can earn. In a month, thus you can earn around Rs. 10000*22 days (approx.) = Rs. 220000.

So, a sub broker’s commission or earnings generation works like the above example. The potential earnings depend on your number of active clients.


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How to Multi-fold your Earnings as a Sub Broker?

If you are wondering how to become rich doing sub brokers business, then the answer is quite simple: you need to acquire more clients, and your main target will be to have more active clients.

Whether you earn well from your sub broker business depends on your ability to network and build a loyal, active clientele.

To increase your earnings, you must work on your communication, pitching, and client servicing facilities. Marketing would also play an important role in getting new clients.

Since there is no upper limit on the income you generate in this profession, the more effort you put in, the more you can earn.

Some of the best ways to activate and generate more brokerage from your clients are educating them and helping them with their trading strategies.

Providing them with daily stock market updates and suggestions, so that the frequency of trading increases, which will eventually increase the brokerage earned by the main broker and thus it will help you earn more commission.

Another thing you need to consider for successfully running your sub brokers business is which stock broker you associate with.

If you associate with a very new stock broking house that has just entered the market, you will need more time to gain the faith of traders and investors.

So, if you are looking for long-term multi-fold income from your sub brokers business, you need to associate with renowned stock brokers who can give you the required boost and on whom the traders and investors already have faith.


Check out these amazing Sub Broker Partner Businesses

Upstox Partner Angel Broking Partner
Zerodha Partner Motilal Oswal Partner
Sharekhan Partner Edelweiss Partner
5Paisa Partner IIFL Partner
Kotak Securities Partner ICICI Direct Partner

How to become Rich with Sub Broker Business – Conclusion

Whether you become rich from a sub broker business depends on your efforts and willingness to become rich from the business and your choices.



 

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