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What Is An Introducing Broker And How Does It Work?

Andrey Mastykin
Written by:
Andrey Mastykin
Dr. BJ Johnson
Reviewed by:
Dr. BJ Johnson
Mirjan Hipolito
Fact-checked by:
Mirjan Hipolito
Updated:
February 05, 2025

Editorial Note: While we adhere to strict Editorial Integrity, this post may contain references to products from our partners. Here's an explanation for How We Make Money. None of the data and information on this webpage constitutes investment advice according to our Disclaimer.

An introducing broker (IB) is an individual or company that introduces new clients to a brokerage firm, facilitating client relationships and providing support without handling the execution of trades. They earn commissions based on the trading activities of the clients they refer.

In this article, we will explore the role of introducing brokers in the Forex market, how they operate, how they earn money, and how to become one. We will also review some of the best Forex IB programs and provide tips on choosing the most suitable one for traders.

What is an Introducing Broker (IB)?

An introducing broker (IB) is an entity that introduces new clients to a Forex broker. Unlike full-service brokers who handle the execution of trades, IBs focus on client acquisition and support. They act as intermediaries between clients and brokers, helping clients open and manage their trading accounts.

Importance of IBs in the Forex Market

Introducing brokers play a crucial role in the Forex market by:

  • Expanding the broker's client base

  • Providing personalized support and education to traders

  • Helping clients navigate the complexities of Forex trading

Differences between broker and IB broker
AspectBrokerIB Broker
Trade ExecutionHandles trade executionDoes not execute trades
Client AcquisitionLimited client acquisition effortsFocuses on acquiring and maintaining clients
Revenue ModelEarns from spreads, commissions, feesEarns commissions based on client referrals
SupportProvides technical and account supportProvides personalized client support

How to become an IB in Forex?

Becoming an introducing broker in the Forex market involves several steps and requirements. Here’s a comprehensive guide:

  1. Research and choose a Forex broker

At first, traders should select a reputable Forex broker with a strong IB program. Consider factors such as commission structures, support, and reputation.

We have studied the IB Programs of reliable brokers and invite you to familiarize yourself with the comparison table:
IB ProgramIB CommissionMarketing ToolsOpen an Account
ExnessUp to 50% of the spreadBanners, landing pages, referral links, and promotional materials. Dedicated partner portal for tracking referrals and commissions. Extensive support and educational resourcesGo to broker
Your capital is at risk.
TickmillUp to $10 per lot tradedComprehensive promotional materials, dedicated IB portal, and educational resourcesGo to broker
Your capital is at risk.
XMUp to $15 per lot tradedWide range of marketing materials including banners, landing pages, and custom tracking links. Extensive educational resourcesGo to broker
Your capital is at risk.
FBSUp to $80 per referred clienCustomizable marketing tools including banners, social media ads, and offline promotional materials. Dedicated support teamStudy review
FXProUp to 35% of the spreadHigh-quality promotional materials including banners, widgets, and custom links. Comprehensive IB dashboardGo to broker
Your capital is at risk.
VantageUp to $8 per lot tradedAdvanced tracking tools, banners, landing pages, and marketing tips. Regular webinars and training sessionsGo to broker
Your capital is at risk.

  1. Apply to the IB program

Fill out an application form on the broker’s website, providing necessary details about the trader's background and experience. Most brokers require basic information and some details about traders’ marketing strategies.

  1. Understand the broker’s offerings

Learn about the broker’s trading platforms, products, and services to effectively promote them to potential clients. Familiarizing traders with these can enhance trader's ability to support clients.

  1. Build your network

Use various marketing strategies, such as social media, webinars, and educational content, to attract potential traders. Building a strong online presence can significantly boost traders’ client acquisition efforts.

  1. Provide exceptional support

Assist clients with account setup, provide trading education, and address any issues they may encounter. Offering personalized support can help retain clients and increase trading volume.

How do Introducing Brokers make money?

Introducing brokers earn their income through various commission structures and referral fees. Here are the main ways IBs make money:

  1. Spread sharing

IBs receive a portion of the spread (the difference between the bid and ask price) for each trade made by the referred client. For example, an IB might earn 20-50% of the spread on each trade.

  1. Volume-based commissions

Commissions are earned based on the trading volume of referred clients. The higher the trading volume, the more commission the IB receives. Typical volume-based commissions range from $5 to $15 per lot traded.

  1. Flat fees

Some brokers offer flat fees for each client referred by the IB, regardless of the trading volume. Flat fees can range from $50 to $200 per referred client.

  1. Revenue sharing

A portion of the broker’s revenue generated from the referred clients.

  1. Hybrid models

Combination of the above types.

How to сhoose the most suitable Forex IB program?

Here are some tips for beginners when choosing a Forex IB program:

  1. Evaluate Commission Structures: Different brokers offer varying commission models. For example, if traders have clients who trade frequently, a volume-based commission like Tickmill’s $10 per lot might be more suitable

  2. Consider Support and Training: Opt for brokers that provide robust support and regular training sessions. Exness and XM offer comprehensive support and training resources

  3. Check Marketing Tools: Effective marketing tools can help traders attract and retain clients more efficiently. FBS provides customizable marketing tools that can be tailored to trader's target audience

  4. Assess Withdrawal Methods: Ensure the broker offers convenient and reliable withdrawal options. Brokers like Exness and Vantage offer multiple withdrawal methods to suit different needs

  5. Review Broker Reputation: Research the broker’s reputation in the industry to ensure they are trustworthy. Brokers like FXPro and XM have strong reputations and are well-regarded in the industry

IB program: why it is profitable

Oleg Tkachenko
Oleg Tkachenko Editor at Cryptocurrency & Blockchain Department

When selecting a Forex IB program, I recommend prioritizing the support and resources provided by the broker. The foundation of a successful IB program lies in the quality of support available. A well-supported IB can effectively grow their client base and maintain long-term relationships, leading to sustained earnings.

  1. Dedicated Account Manager

    • Personalized Support: Consider brokers that offer a dedicated account manager for personalized support

  2. Educational Resources

    • Training Sessions and Market Analysis: Comprehensive educational resources such as training sessions and market analysis are crucial. These resources enhance your trading skills and help you better support your clients

  3. Customizable Marketing Tools

    • Promotional Materials: Look for brokers that provide a variety of promotional materials, including banners and social media content. These tools should be easy to customize to effectively target your audience

  4. Tracking and Reporting Tools

    • Performance Monitoring: Efficient tracking and reporting tools are necessary for monitoring performance

  5. Reliable Payment Methods

    • Financial Stability Ensure the broker offers prompt and reliable payment methods to maintain financial stability

By focusing on robust support, educational resources, and advanced tools, you can build a successful and sustainable IB business in the competitive Forex market.

Summary

In conclusion, becoming an introducing broker can be a lucrative career path for those interested in the Forex market. By understanding the role of an IB, the various ways they earn money, and how to choose the best IB program, traders can set themselves up for success. Remember to consider commission structures, support, marketing tools, and the broker’s reputation when making a trader's decision.

FAQs

What is an IB for a broker?

An IB is an individual or company that introduces new clients to a brokerage firm, earning commissions based on the trading activities of the referred clients.

What is the IB commission?

IB commission is the earnings an introducing broker receives from the broker for referring new clients. This can be based on spreads, trading volume, flat fees, or revenue sharing.

Is IB broker safe?

Safety depends on the reputation and regulatory compliance of the broker. Choose reputable brokers with a solid track record to ensure safety.

Is IB a good idea?

Being an IB can be a good idea if traders have a strong network and an interest in the financial markets. It offers flexible working hours and the potential for high earnings.

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Team that worked on the article

Andrey Mastykin
Andrey Mastykin
Head of Company Reviews and Ratings

Andrey Mastykin is an experienced author, editor, and content strategist who has been with Traders Union since 2020. As an editor, he is meticulous about fact-checking and ensuring the accuracy of all information published on the Traders Union platform.

Learn about our editorial policies
Dr. BJ Johnson
Dr. BJ Johnson
Developmental English Editor

Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK.

Mirjan Hipolito
Mirjan Hipolito
Cryptocurrency and stock expert

Mirjan Hipolito is a journalist and news editor at Traders Union. She is an expert crypto writer with five years of experience in the financial markets.

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Cryptocurrency

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Trade execution is knowing how to place and close trades at the right price. This is the key to turning your trading plans into real action and has a direct impact on your profits.

Index

Index in trading is the measure of the performance of a group of stocks, which can include the assets and securities in it.

Bitcoin

Bitcoin is a decentralized digital cryptocurrency that was created in 2009 by an anonymous individual or group using the pseudonym Satoshi Nakamoto. It operates on a technology called blockchain, which is a distributed ledger that records all transactions across a network of computers.

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