How To Build A Sub broker Business

5 mins read
by Angel One
Want to own a business? Become an authorised person. Learn the details to begin a stock broker authorised person business.

Succeeding as an entrepreneur requires hard work. It requires planning, perseverance, and discipline. A sub broker  business  is a popular career choice for modern entrepreneurs. Let’s see what it takes to build and run an authorised person business. 

A sub broker or authorised person is anyone who is not a trading member of the stock exchange. But they can act on behalf of the stockbroker as an agent under their brand. They are employed to assist investors in dealing with securities through the broker.

A stock market sub broker business is one of the best businesses at any stage. If you know about the stock market or are willing to learn, it is one business where you can quickly succeed. An authorised person plays a significant role in the Indian finance market because they directly deal with investor clients. There is still a vast market to tap into. A large population and very poor financial literacy present a significant opportunity to build a robust authorised person business.

Who can become a sub broker

Since authorised persons aren’t members of the stock exchanges, they need to empanel themselves under the banner of a registered broker. It will give you immediate access to the broker’s brand name, trading system, products and services. It will make the process faster and more seamless when executing the orders on your client’s behalf. Moreover, your association with a reputed brand name will help you win over your clients effortlessly.

The qualification criteria to become sub broker is simple. 

  • Anyone above 21 years of age can become an authorised agent. 
  • The minimum qualification required is 10+2. But a graduation degree is undoubtedly an advantage. 
  • The candidate must have a basic understanding of the market or at least working experience of a few years in the same field. 
  • You would need knowledge of computers to manage a client’s account and operate the trading platform. 
  • Good communication skills are essential for client-facing. 
  • Should be equipped with the latest knowledge in economics, politics, and finance since these factors affect the stock market.
  • The regulation requires stock market authorised persons to clear basic NIMS modules in equities, mutual funds, commodities, and F&O. 

What is the role of an authorised person

An authorised person assists investor clients and helps them invest in the stock market. In the Indian system, individual investors can’t place direct buy and sell orders. They must put it through a stockbroker or agents. The agent will then place the order through the broker’s trading platform. The primary role of an authorised person is to acquire new customers, interact with them on a one-to-one basis, and assist them in making investments.  

Working capital requirement for authorised person business 

It is one point that concerns most entrepreneurs. Like any new business, costs and initial investments are involved in opening an sub broker  business. We will summarise the expenses involved.  

  • Initial deposit with the principal broker:

    The initial deposit can range from 50k-3 lakh. It is a one-time cost for obtaining the licence from the broker to become a sub broker. 

  • Registration fees:

    The registration fees with the broker/exchange will cost around 15-20k. It is also a one-time cost.

  • Office set-up costs:

    There will be costs of obtaining the office space and installing the set-up. It will include money for computers, workstations, televisions, and others. 

Besides the one-time expenses, you need to consider monthly payments in the form of salary to the staff, office rent, telephone and internet bills, and others.  

Important points to know 

Establishing a successful business takes more than just hard work. When obtaining a stockbroker franchise, make sure that you select the best one. Often agents partner with brokers that promise higher commissions. But to build a long-term relationship, you need to understand the value additions provided by the broker to expand your business. 

Stockbroking is not a part-time business. Often agents make a mistake, which leads them to lose great business opportunities. It requires complete focus and dedication.  

Another point is that an agent is allowed to offer the stockbroker’s entire range of products and services. You must find a broker with various products and services to help you expand your business and acquire more clients. 

How to get more business 

Here are some tricks to increase your business book when you start a stockbroker franchise business. 

Start with your natural database. These are the names of people whom you know. It can consist of family members, relatives, colleagues, friends, and others you would like to make your clients.  

Cold calling is the best option to increase the size of your database. You may call as many people as you can daily. Eventually, you’ll be able to get clients from your database.

Meet your clients regularly to keep them updated with new investment options. Also, you may keep them informed through calls, emails, newsletters, and others. 

In an authorised person business, clients are your most significant assets. The amount of your income is directly proportional to the business volume you will generate. Hence, you must obtain new clients and retain the older ones for longer.   


Anyone can have a sub broker business, but you should try to stay on top of your game. Your success as an authorised person depends on your skills and know-how. Hence, you must make efforts to upgrade your knowledge and skills continuously.