Introducing Brokers who are starting out as an individual or single proprietor of his or her own company are limited, to a degree, for growth potential.  Unless an IB has partners or employees from the start, the success of the IB is dependent on one individual. The operator of the IB may very well be the only individual representing his or her new venture. This is understandable as this is how most businesses commence. As your business grows, the operation expands; your business will require more resources and the proprietor will have to bring on more staffing and hire and train new employees. Most of what we are discussing here is common sense and second nature to most; however, it should be explained for those who do not have any experience running this type of business. 

As an Introducing Broker, you must ask yourself two very important questions, 1) how far do I want to take my business? 2) And how far can I take my business? It might seem these are two questions are similar, but on the contrary, they are very different.

Many Introducing Brokers are satisfied with a book of business of $100,000 or $500,000. While other Introducing Brokers will never be satisfied, always trying to achieve new heights.  An IB might set a goal of $1MM. When reached, $2MM, then $5MM and so forth. In practical terms, it might be difficult to reach multimillion dollar levels with such minimal resources. Entrepreneurs understand this very well. They need the assistance of others in order to reach the level they have set for themselves. In the case of Wall Street, this translates into building “Brokerage Houses” with talented, skilled and motivated financial professionals.  In order to do this, first, you must lead by example. The wonderful component of the Forex market is you can build you business very quickly with very little production. For example, if you introduced the Forex market to ten individuals who each opened $10,000 new account, your “book of business” would be $100,000. Based the volume traded, you could potentially earn $5,000 to $10,000 every month in rebates. As we previously discussed, the Forex market is very lucrative, not only for the Introducing Broker, but also for the client.

Therefore, if you have demonstrated you can be successful in generating business yourself, then you can share your expertise and knowledge with others. Effectively, you can train and educate others on how to do what you have already done.  

Step 1: Prove to yourself you can do what you’re asking others to do. There are many successful IBs or business owners for that matter, who are not effective or comfortable with sales. However, it is certainly easier to train others if you can lead by example.

Step 2: Start building your sales team by partnering or hiring an experienced sales representative who is just as capable as or even better than you are. This individual will serve as your partner or sales manager.

Step 3: Begin hiring and training individuals to become professional Wall Street sales executives. This is the most important step in building your brokerage house. Step 2 is not a requirement. However, Step 3 is the most important aspect to taking your business to the next level. Every Wall Street broker, whether you’re a stock, commodities or Forex broker, must start the career somewhere, typically at the very bottom.

What characteristics should an Introducing Broker look for when seeking to hire and train professional sales executives? The same qualities and traits a successful Wall Street Broker should already possess. Successful sales executives and entrepreneurs have similar character traits. All are motivated by success. Most are motivated for financial freedom. You need to be persistent, organized, energetic and ambitious. Self motivated; passion and willingness to learn and excel. Without sounding too cliché, “give me someone who is poor, hungry and smart, and I’ll turn him into a winner”.

The significance is the understanding of the flipside of the ratios is just as important. Even if you’re the best ever, you’re still failing 60% of the time. Realistically, you will fail 80-90% when cold calling. As result, in order to succeed, you must make as many phone calls as possible. A producing broker will make up to 300-400 calls per day. It is a numbers game. You have to make your own luck.

Now, the auspicious element of this ideology is the game itself. The Forex market is fastest growing market in the world. At this point, if you have read through the website, you realize why the market is growing as fast as it is. Minimal production is required to be successful, in terms of financial success. Yes, you can earn a six figure income with very little under management. Raise a quarter million and you have the chance to earn more than 98% of the working population. So, you must ask yourself, how can I not succeed if I want this bad enough? Only you can answer this question. But if you have read this far, then the answer is already evident.

Step 4: As you build your team, superstars will emerge. It is at this point, where you need to assign managerial responsibilities to your top producer. Quite possibly, your top producer may wind up being your partner. Your Sales Manager (either from Step 2 or emerging from Step 3) will take on the responsibility of building a team of brokers, training and educating new hires, working closely with brokers, assisting and supporting them throughout the sales process and ultimately, supervising a team of producing brokers.

Step 5: Eventually, another superstar will emerge – and he or she will be given a chance to build a new team. The idea is to duplicate this process over as many times as possible. Ideally, you want to build the largest brokerage house as possible, i.e. – 5 teams, 10 brokers to a team, each with a goal of $100,000 new business per month would be a formidable challenge. Subsequently, those results will give you 50 brokers generating $100,000 per month, or $5MM per month in new business. Over a year, your business could raise as much as $60MM. This example is very ambitious, yet achievable. There are many stock and commodities brokerages that generate this type of production year in and year out. What is unique about the Forex market is that the industry itself lacks a major retail brokerage house. In stocks, we have large wire houses, such Morgan Stanley, UBS or Smith Barney. These companies have been around for more than 50 years. But there are many brokerages the general population has not heard of, but the industry has. The owners of these brokerages are doing very well for themselves.

Falling short, even 1/10th, of the aforementioned example, would still represent a very successful endeavor. The proprietor or partners of the Introducing Brokerage would earn a handsome income. Step 6: Division of Labor: while building your business, you will need to firmly separate sales and trading. Your brokers will want to trade their client’s accounts. It is very important to stress the importance of focusing on building their client base. One of biggest mistakes an Introducing Broker can make is allowing brokers to do both the sales and trading. Why? Your broker will focus all of his or her attention on trading as opposed to sales, which he or she should. Introducing Brokers should either set up a team of in-house traders or outsource all management of client funds. The latter can be very effective. IB Portal is in the process of finding qualified, professional traders who specialize in the Forex market. The benefit of utilizing the services of a professional trader who has a track record is your brokers can market the trader’s performance history. If you solicit funds on behalf of 3rd party, you should conduct as much due diligence as possible and search for specific results, such as low draw downs, proper risk management, etc. IB Insider breaks down how to set up your own successful money management operation as well how to find a qualified money manager to trade on behalf of your client funds.

Sales executives need to focus on sales. No distractions. If your broker is doing his job, which is consistently making 300-400 calls per day, he or she will generate scores of new leads. Leads, if qualified properly, will turn into accounts. Obviously, prospective clients will request more information on your company before doing business with the Introducing Broker. Depending on how many leads your brokers are generating per month, it will be useful for your operation to have a Sales Assistant (Admin) or Receptionist to handle incoming phone calls and outgoing information kits about your company. A quality Sales Assistant can be a tremendous asset for the Introducing Brokerage and its employees. Outside of just sending packages for brokers, or prescreening phone calls, an Admin can create sales databases, source for leads, facilitate the account opening process and handle book keeping duties for the firm. Brokers will come and go, but your Sales Assistant or Administrative Assistant, will be the heartbeat of your firm, hopefully, for many years to come. Choose wisely.

Another great benefit of the Forex market is your FCM will handle most aspects of the brokerage business, depending on which broker you’re working with. Introducing Brokers are an extension of the FCM. Your FCM will handle the middle office, back office, customer service, accounting, general counsel and technical support. The only concern of the Introducing Broker is sales and marketing. No accounting office. No retainer fees. Of course, if your brokerage gets big enough, it would be wise to take precautionary measures, hiring both an attorney and accountant.

Another great benefit of the Forex market is your FCM will handle most aspects of the brokerage business, depending on which broker you’re working with. Introducing Brokers are an extension of the FCM. Your FCM will handle the middle office, back office, customer service, accounting, general counsel and technical support. The only concern of the Introducing Broker is sales and marketing. No accounting office. No retainer fees. Of course, if your brokerage gets big enough, it would be wise to take precautionary measures, hiring both an attorney and accountant.

 Step 7: The next step for Introducing Brokers who are ready to proceed further with their business, is opening an office. Of course, how far you have progressed financially will warrant the size, location and prominence.

a) IBs need to create an energetic office environment. Emotion creates emotion. Emotion creates energy. Energy instills passion. Passion conveys confidence. Confidence wins trust. Trust equals new clients, thus new business. 

b) IBs need to present an image of success, fostering motivation and ambitiousness. Employees must perceive success. Brokers must feel as they are part of a team – they are in this together.

c) Incorporate technology in your office, featuring multiple plasma television screens, flat screen computers, Bloomberg Terminal if applicable, and live streaming quote tickers in the form of LED displays or computer monitors.

Step 8: Marketing and advertising your products and/or service. If building a brokerage house is the direction you’re aiming for, then more than likely, you will be offering self directed and managed accounts. You might "cross-sell" other products, such as educational products and training, including workshops and seminars. However, you will be focusing on the former, self directed and managed accounts. Therefore, you need leads for your brokers to call. Leads are very important for any business. Finding a good lead source can be very challenging. See Lead Generation.

In conclusion, it is very important to facilitate a sales environment which is conducive to energetic and team oriented behavior. The financial profession is very fast paced and can be stressful. Your operation should be working as a machine on all cylinders.