An introducing broker interacts with clients interested in trading securities, providing advice and taking orders. They delegate trades to futures commission traders and offer benefits such as discounts. Working with an introducing broker provides clients with more leverage and access to special benefits. Training and licensing may be required, and the career is suitable for those interested in securities and client management.
An introducing broker is a person who interacts directly with clients who are interested in trading securities. The broker cannot execute transactions on behalf of clients. Instead, he takes orders, provides advice, and deals with problems that arise. They delegate the trades to futures commission traders who work on the floor. The merchant works to get the best deal on behalf of the customer.
Introducing brokers could be considered as specialist in customer relations. Some work for large companies, delegating business to another department within the company. Others work for themselves and partner with a futures commission trader who accepts commissions from a variety of brokers and firms. Different skills are required to establish customer contacts and run on-site operations, and splitting these tasks between two different finance professionals can be beneficial for all involved.
The introducing broker meets with clients, accepts orders and passes them on to the futures commission trader. Introducing brokers do not handle cash or securities, and the client sends them under separate coverage to the trader the broker works with. When customers want to place orders, the placing broker passes them on to the futures trader. Introducing brokers also passes on benefits such as discounts and promotional materials to their customers.
One advantage of working with an introducing broker is that because all of the broker’s accounts are grouped together, clients have much more leverage than they would on their own. Futures commission traders are eager to resolve issues and disputes to avoid losing a profitable account. Additionally, being part of a group provides customers with access to bulk transaction bonuses and other special benefits that would otherwise not be available.
To serve as an introducing broker, training and a license may be required, depending on where one is working. People can start working for companies that pay for training and licensing to gain work experience while training. When a level of competence is achieved, an introducing broker may consider working independently. Some brokers may maintain relationships with their former companies by working with their future traders and guiding clients along their path.
This career is suitable for people who are interested in securities and good with client management. Introducing brokers work with a wide variety of clients and must be innovative when it comes to service and account options so that they can attract and retain clients.
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