top of page

What are the Advantages of Becoming a Sub-Broker?

The stock market is growing at lightning speed. This is opening up countless opportunities for investors and professionals in all spheres. This booming rise and the increase in the number of startups in this sphere have accelerated the demand for brokers and sub-brokers.

While a broker needs long-term experience, significant investment, too many permits, and in-depth knowledge, it is slightly easy to become a sub-broker. Additionally, becoming a sub-broker is not just simple but also extremely rewarding.

If you want to know the benefits of becoming a sub-broker and how to become one, have a glance at this post.

Who is a Sub-Broker?

A sub-broker is a middleman between the stockbroker and the investor. It means he mediates between the client and the broker and works for the stockbroker.

The main job responsibilities of a sub-broker are to bring new clients to the brokerage firm, assist clients in investing and dealing with stocks and securities, track the trading performance of the client using the latest tools, manage the client’s portfolio, and more.

In return, the sub-broker earns a specific commission from the broker for every transaction. Hence, the earnings of a sub-broker increase with the increase in the number of transactions.

How is a Sub-Broker Different from a Broker?

A broker and sub-broker work in the same industry, but the two have some major differences.

Here are the key differences between a broker and a sub-broker:

  1. Brokers are listed as trading members in the stock exchange market, while sub-brokers are not. However, sub-brokers require a Registered Certification from SEBI to service customers and conduct their business.

  2. Brokers are paid brokerage fees, but sub-brokers earn commission. According to the law, only registered trading members in the stock exchange are permitted to charge brokerage fees. Hence, the sub-broker earns a commission on every transaction they make.

Benefits of Becoming a Sub-Broker

A sub-broker holds a rewarding career and is benefitted in numerous ways. Here are some of the advantages you can gain by becoming a sub-broker

1. Less Capital Investment

Most businesses require a pretty good initial investment, but this differs from the sub-broker business. You must pay a small amount to a reputed company to become their sub-broker and start servicing clients immediately. The investment amount depends on the franchise model you select. Hence, you start earning gains right when you serve your first client.

Moreover, the amount you deposit is refundable. Most companies return the security amount when you meet the contractual agreements fully.

2. Higher Return on Investments

New businesses usually only make money in a short period, which can be due to many reasons. The sub-brokers, however, can start earning from day one. It is because a renowned brand backs them.

Sub-brokers can also fix their revenue sharing with a company, earning a higher proportion.

3. Hands-on Knowledge of the Best Technology

You can employ the best technologies if you are lucky enough to start working with an established market leader. This way, you gain experience about the same.

These advanced trading platforms and tools are used by companies to track their clients’ trading performance and manage the complete client profile.

Additionally, you gain knowledge about separate risk management tools offered by distinct stock brokers to the sub-brokers for smooth client handling procedures.

4. Free Training and 24×7 Support

New sub-brokers have to abide by a lot of roles and responsibilities. A stockbroker offers 24 x 7 support to efficiently manage such situations. Their manager guides them and explains the entire working process.

In addition, they get access to free training sessions through webinars and seminars. This helps them to gain deep insights into the stock market

5. Gain Expertise and In-Depth Understanding

Another benefit of being a sub-broker is to gain an understanding and expertise about the stock market. You can apply this knowledge to personal trading and soon start a self-sustaining business.

Sub brokers can serve clients better and easily manage their investments. You start learning from day one, and you can open your flourishing business after a couple of years.

6. Ability to Perform Multiple Tasks

A broker needs extensive credentials and authorizations to carry out tasks in the trading market. This is not the case with a sub-broker. You can perform numerous tasks as a sub-broker without becoming a Trading Member.

7. The Profession is Always in Demand

People continue to earn and invest money, so the trading market will never shut down. The demand for brokers is always there, and so does the demand for sub-brokers.

With people offering more money to invest, the demand has risen. And the more experienced you are, the better you hold in the market, and more people will come to you for investment. Therefore, you can enjoy a long-term sustainable career without experiencing a recession.

You see! Becoming a sub-broker can render you with tons of benefits. If you like being a sub-broker, here is how you can become one.

How Can You Become a Sub-Broker?

The various steps to become a sub-broker are:

1. Select a Stockbroking Company

First, you must choose a stock brokerage company with which you want to partner. It is an important step. You must decide on a reputed and prestigious company because it will impact your daily operations, incentives, and other aspects.

Ensure that besides high incentives, you must also consider the experience, networking, product offerings, and digital presence of the company you partner with. Click here to learn more about one such leading company that offers amazing rewards and multiple business models to choose from according to your requirements.

2. Documents and Eligibility Requirements

The second step is to meet the eligibility criteria. It is quite basic, and you have to submit the duly filled documents needed for the stockbroking firm you want to partner with.

In addition to the documents, interested businesses or people must submit a processing fee with GST.

3. Approval for Application Scrutiny

Your application is then transferred to the National Stock Exchange for approval and validation. The stockbroker also processes the fee on your behalf. The Stock Exchange company scrutinizes the document to ensure no deficiencies or discrepancies.

If your document has mistakes or deficiencies, your application will return. You have to apply for re-submission then.

4. SEBI Registration

After reviewing your sub-broker application, you would need SEBI registration. It requires a fixed fee. When SEBI acknowledges the fee payment and registration, the application is sent to the sub-broker registration certificate with a unique registration number. After receiving SEBI registration, you are considered a sub-broker.

What is the Eligibility to Become a Sub-Broker?

The eligibility standards and sub-broker qualifications may vary based on your selected trading partner. The various eligibility criteria you must meet are:

  1. Minimum 21 years of age.

  2. Have a minimum qualification of a High School Certificate.

  3. Must not be an active trading member.

  4. Must not be registered as a sub-broker with another company.

  5. Must not be an associate or shareholder of another sub-broker.

  6. Must not be a defaulter in the stock market.

What Documents are Required to Become a Sub-Broker?

It is always best to check the NSE website to know about the latest documents required to become a sub-broker. But the primary documents needed are:

  1. Address Proof of the Applicant or Trade name – It is a mandatory requirement. The address must be mentioned in the proof document and must be the same as on the application you have filed. The documents acceptable as address proof are an electricity bill, valid passport, driving license, ration card, telephone bill, and bank statement of the last month from an authorized bank.

  2. Proof of Experience Certificate – This is another mandatory requirement whether you apply as a director, partner, or individual. The qualification must not be less than HSC. You need to provide an experience certificate of at least two years.

  3. A copy of the agreement between a sub-broker and a stockbroker.

Wrapping Up

Sub-brokers play an important role in the economy. They are equally responsible for shaping the financial market and supporting the growth of medium and small enterprises. Being a sub-broker is profitable but equally challenging.

To become a sub-broker, ensure you meet all the eligibility criteria and provide all relevant documents. Hence, if it is the right profession for you, start your journey of becoming a sub-broker today. 

Related Post


Rated 0 out of 5 stars.
No ratings yet

Add a rating
bottom of page