12 May 2022

How to run introducing broker program – Complete Guide

Contents

  1. What is an introducing broker program or a forex affiliate program?
  2. The difference between forex affiliates and IBs
  3. What are the most popular remuneration models in forex affiliate programs?
  4. What are the benefits of having an introducing broker program?
  5. How to run a successful IB program?
  6. What is the reselling program in the X Open Hub?

What is an introducing broker program or forex affiliate program?

In layman’s terms, the broker affiliate program is a virtual space on the web that enables brokers to work in partnership with publishers, web influencers, and market leaders on common goals. In this cooperation, the IB partner receives a commission by promoting the brokerage houses or their services to its audience.

On the other hand, brokers increase the number of clients and lift brand awareness, thanks to IBs’ recommendations. In most cases, such arrangements require an IBs agreement between both parties based on regional regulations.

Affiliations programs are present in various businesses, but affiliate programs in the financial industry are certainly the most rewarding for an associate. 

Forex Affiliate Program vs. introducing broker program

The work of an affiliate is comparable to attracting clients to a brokerage house. However, there are differences between the affiliate program and the IB program. 

The affiliate’s sole responsibility is to create the affiliate’s website or distribute the message through other channels, install tracking links and refer clients to the broker. In other words, their primary responsibility is marketing. An affiliate can always extend their cooperation to IB status.

On the other hand, introducers recommend clients, taking marketing to a higher level, offering services, and consulting. Clients can establish a more advantageous, long-term connection with the Introducing Broker. As the client trades through a broker and IB profits from these trades, there is a mutual understanding between the IB and the broker.

What are the most popular remuneration models in forex affiliate programs?

Popular CPA (cost per acquisition)

Forex and CFD brokers aren’t the only ones that payout commissions to their partners in the CPA models. It is a common internet marketing strategy in which the partner is only paid when the customer is “activated.” To be eligible for a commission, a person must click on a link or broker’s banner on the affiliate’s website. This individual must visit the broker’s website, open a real account, deposit the required amount, and execute their first trade.

Affiliates appear to need to perform a lot of work to get clients to engage in active trading to make any money on the CPA commission model. However, it is important to remember that CPA income is tempting because commissions in this model reach $ 250 per client.

CPL model (cost per lead)

CPL – Cost Per Lead – is a payment method based on obtaining commissions from recommended clients. In such a situation, the partner receives remuneration if the potential client he acquired fills in dedicated forms.  A free account with a bonus without mandatory deposit is an incentive for such a person to provide their contact details. In this way, the brokerage company obtains the personal data of potential traders, and the partner receives a commission, but not as large as in the CPA model.

Advanced rev-share models

Revenue-sharing, or rev-share for short, is another commission arrangement. The affiliate gets paid a part of the commission on completed transactions, thus the customer he refers must be an active trader. Brokerage businesses strive to maintain their clients for as long as possible since transaction commissions on Forex and CFD markets are a source of income (usually implemented in spreads). 

IB commission share patterns available in our back-office system – xManager

  • Fixed value per lot
  • % of client commission
  • Pips per lot

Multilevel models

In the Forex and CFD multi-tier IB programs, you can recommend not only the clients themselves but also other affiliates. Then you can earn by the fact that another affiliate invests and attracts new traders. It’s a multilevel revenue-sharing model that could be compared to a multi-level marketing scheme.

What are the benefits of having an introducing broker program?

Establishing a forex partnership program is a cost-effective strategy to expand your forex brokerage and grow your business. Through partnership programs, independent partners, also known as introducing brokers or IBs, bring new clients to your organization, aid with onboarding, and keep them engaged in trading. You pay the IBs a commission for each new active customer, or you are using other IB models mentioned above.

By incorporating introducing brokers into your forex organization, you may reach out to a larger number of potential clients.

Although online and offline marketing campaigns can reach the target audience, advertising can be costly and time-consuming. It’s not as simple as running a few internet ads and purchasing sports sponsorship to reach an audience likely to convert. You had to establish trust and recognition, especially in this industry. You can shorten the path to people interested in your services through IB partnerships.

Introducing brokers can assist you in attracting new customers. When you hire experienced traders as IBs, you receive immediate access to their network. When you hire an IB from another business, you may acquire access to their loyal clients after they leave.

When you add FX IBs from various nations or who speak other languages, you may maximize the value of reaching new consumers. You may want to increase the number of traders you have from other countries if ESMA requirements tighten. Having IBs all over the world can help you diversify your customer base and mitigate the impact of new restrictions on your business.

What is the best way to conduct a successful IB program?

IB traders are more likely to stick with IB than your organization. Traders may choose to follow an IB who decides to partner with one of your competitors. Providing the finest tools for success and proper pay for their work is critical to retaining Introducing Brokers and the clients they have attracted. 

According to Jonas Eldborn from Fair Trading Technology experienced Partner Management Provider

To succeed with your IB program, it’s essential to have a well-thought-through system in line with market standards but also allow the flexibility for individual deals. As most IBs want something custom specific to their needs, having a solid technical solution in the backend with automatic calculations and allocations simplifies a great deal for the broker.

Provide appealing remuneration

Introducing brokers want to be adequately compensated for introducing new clients to your firm. Making sure you pay a competitive rate for recommending new clients who make substantial deposits and regularly trade via your brokerage house is vital.

When running properly, the IB program may be a valuable asset for brokerage. A solid CRM and back-office software are crucial components. You must ensure that the IB module you are using correctly measures the leads that your partners have brought in. Misunderstanding in this domain might result in a loss of trust and a valuable business opportunity.

Assist your partners 

IBs want to grow their business as much as you want to grow yours. You can show them that you are investing in helping them succeed by offering excellent marketing tools and support. These tools should include customizable banners and widgets on their websites, trading guides, and other educational tools.

Promote your IBs program

Affiliate programs are usually not promoted traditionally. Of course, you will need a dedicated landing page with a description of the conditions and a registration form, but in most cases, you will have to conduct dedicated outreach campaigns among website owners and influencers that match your audience. You would also need to be present on industry websites, affiliation directories, and online affiliate program comparisons and spend some time networking at industry events. In this way, you will learn more about the market, competitors, and influential trading gurus.

What is the reselling program in the X Open Hub?

X Open Hub offers its partners a very simple and at the same time very effective way of cooperation. Our reseller program is an excellent opportunity for agents, entrepreneurs, and corporate introducers who would like to develop their business in a very easy way. By attracting clients to X Open Hub, resellers can receive part of the net profit from White Label packages. We work with you on every stage of the client’s onboarding to develop the right commission structure for your business where you earn every time your recommended partner pays an invoice.

All details of X Open Hub’s reselling offer can be found under this link.

 

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