Cost of Having a Sub Broker Franchise
Updated On November 16, 2022 | by Joseph Williams
If you are planning to start your sub-brokership business with top brokerage houses in the country, then one thing you must consider is the cost involved in setting up the business. This article will help you understand how much you need to have a sub-brokership franchise in India and will also guide you about the cost/deposit you need to provide to buy the franchise and other details related to the same.
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What is a Sub-brokership Franchise?
As you may know, the sub broker works indecently to acquire business for the stockbroker he is associated with and gets a portion of the revenue he has generated for the brokerage house. So, you can call him an agent of the broker or a sub-broker franchise as per your choice.
However, the sub-brokers responsibilities don’t stop at just acquiring business for the brokerage house. He also has to assist clients in their trading and investment process, take care of their queries and doubts, and even help them with their investments.
Becoming a sub-broker can be a lucrative business opportunity. Many brokerage houses expand their business in other parts of the country apart from the city of origin via sub-brokers franchises.
How Much Does it Cost to Have a Sub-brokership Franchise in India?
In India, the sub broker franchise cost is around Rs. 1 lakh to Rs. 2 lakhs. If you are wondering why the aspiring sub-brokers need to pay this security deposit, then here are certain factors that you need to know.
- The brokerage house whose products and services will be promoted and sold by the sub-broker has a foothold in the market. This means they have a brand value/ goodwill. The sub-broker gets the benefit of the same when associating with the brokerage house. Thus, the first reason to pay the security deposit is for the brand value and goodwill of the main brokerage house.
- The second factor is the main brokerage house offers multiple support, and other facilities to the sub-broker to help him grow his business. From marketing support to advisory, trading, and many such facilities are offered by the brokerage house, and this is why you need to pay the sub-broker franchise cost.
- There is another factor that works for many brokerage houses is that the more security deposit you keep with the brokerage house, the higher portion of the revenue is shared with you.
Is There Any Brokerage House Offering a Low-cost Sub-brokership Franchise?
It is very common for most brokerage houses to keep a security deposit. However, a handful of brokers don’t take any security deposits. One example is Choice India. Here you can open and set your sub-broker franchise without keeping a penny as a deposit with the brokerage house.
Sub-broker franchise without any security deposit is a new concept that Choice India has come up with. One thing that may amaze you is that, even after taking no security deposit, the brokerage house pays one of the highest revenue shares in India, and other support and benefits are there as well.
How Much Profit Can a Sub-broker Generate From the Sub-brokership Franchise?
When you invest in something, you always want a return, don’t you? So, you must be wondering how much you can earn by investing in the sub-brokers franchise. Though the exact share of revenue varies from one brokerage house to another, on average sub-brokers get 40% to 60% of the revenue generated by them for the client.
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So, for becoming a sub-broker you need to invest and keep the security deposit if the brokerage house asks for security-deposit sub-broker franchises. However, the cost of having the sub-brokership is quite reasonable compared to other investment options.