7 Things You Must Know Regarding The Sub Brokers Before You Take Help From Them

Before getting deeper into the considerations that you need to look for in a sub-broker, it is significant to learn what a sub-broker is. A sub-broker is a person who is not accounted as one of the trading members of the stock exchange but functions on behalf of the registered trading members as one of their reliable agents. Let’s simplify this term.

A sub-broker is an intermediary entity between the client and the stockbroker. The members associated with the exchange may employ some agents to become sub-brokers of the recognized trading members for driving-in more investors to buy stocks or shares. Sub-brokers work on tip or commission basis. More the clients they pick up, more is the money they make.

There is a specific criterion that sub-brokers must be registered with SEBI before they become a sub-broker and start dealing with the clients. One broker is only allowed to build up an association with one member of the exchange, which means one broker can’t serve two stock members at the same time.

So what you should know about sub-brokers before you take them on board for help:

Dealing with a sub broker? You need to know some things like the background he belongs to. What financial and stock market knowledge does he have? What is his past reputation for dealing with other clients? These are some questions you should ask your broker before signing the deal.

Although the population of sub-brokers has caught a pace and market is flooded with them, it’s not a child’s play to find a reliable one. Every trader should know that it can be very cautious if you hand over your fortune to a wrong broker. Let’s have a closer and in-depth look to the core traits of a sub-broker:

1. Accessibility:

The first and foremost thing you should look for in your sub broker is the accessibility. We cannot deny the fact that stock exchange is a day and night game; the stocks can be skyrocketing anytime and vice versa can be touching the ground. So you need to make sure that your sub broker is accessible whenever you need him. Always keep in mind that lack of accessibility will cost you tons of bucks!  If you encounter that your sub broker seems to be inaccessible or is not responding you on time, simply choose another one. An almost immediate response is indispensable when you are dealing in a stock exchange.

2. Is The Sub Broker Legitimate?

The most important factor to be considered is the legitimacy. Before committing something, look for how legitimate the broker is. As legitimacy is a trait which can’t be hidden, it will not take your much efforts to look for. A reliable sub broker will promise you with fair dealing practices and fund security according to their terms and policies. Wondering how to check for legitimacy? Check your broker’s registration and to what firm they are bestowing services. You will definitely get to know the background and the legitimacy rate of your broker and the firm. Also, ask them to disclose about their regulatory bodies. If he doesn’t hesitate while disclosing the information, sign the deal, he is the one.

3. Transparency Is Important:

A reliable and legitimate sub broker will precede all the actions in a transparent manner. This means that you will have a complete look on what is going on with your funds. The broker should reveal the fleet of his operations and metrics in order to ensure that he is not hiding anything. The trade volume and happy clientele are the silver bulleted badge of a sub broker. Furthermore, your broker should drive you into more deeper insight into the stocks information and how they do their business, in order to help you to choose which service to take forward. Avoid getting in touch with broker entities that are clearly not transparent or denying to verify the past details. It can be a sign that you should not do business with them.

4. He Should Be A Risk Taker:

It has been proved that good sub brokers aren’t afraid to take risks. As higher the risk is, higher are the returns you are likely to get. In fact, reliable sub brokers chase opportunities that are high on risk. So ask your sub broker- Is he into taking risks or not? Most of the people try to keep a distance from brokers and firms that tend to take risks, as no one wants their hard-earned money to get squandered. But the stock exchange is a thing that requires taking the risk if you want to earn something. A good sub broker will ensure that he will take the risk whenever he thinks situations will get fruitful.

5. Brokerage Charges:

The only way a brokerage firm and a sub broker earn is the brokerage charge or the fee they take. Ask your sub broker to share the brokerage fee and related details in order to know if you can do business with them or not. Some sub brokers hide imperative details and charge traders in the form of several hidden charges and account management charges. These details will help you know what amount you are going to make. Also check for brokerage charge on the internet to know is your sub broker reliable.

6. Customer Service:

This is another imperative factor that governs the reliability of a sub broker. Try to engage the sub broker to discuss about what customer service they offer and how rapidly they can resolve your concerns. This is important to know as any time of the day you may need customer service to enquire about your account and some details, you will not be denied.

7. What People Have To Say?

Reviews and ratings are always the perfect way to judge the level of services. Check for your sub broker and his associated firm and dig deeper into the review to know how they deal with others and what others has to say about them. If you find positive leads, you are going in the right direction. You will also get an insight to the measures to what the broker is doing well at.

After verifying your sub broker on the above mentioned parameters, you will get to know which one to choose for your business perspective. You also need to be confident while dealing with your broker as it’s wise to discuss things before the blunder happens.