Difference Between A Sub-Broker And A Remisier
Stockbroking in India has many critical parts with different functions. Two such parts are sub-brokers and Remisiers. Oftentimes, both these terms are used interchangeably although there are some subtle technical differences between the two. It is essential to learn the difference between these two aspects of stockbroking, especially if one wishes to start a career in the same.
Both sub-brokers and Remisiers have — in essence — the same role. They serve as an intermediary between an investor and a stockbroker and earn a commission from sales. However, both of them follow a significantly different set of business models. Here are some of the ways in which a remisier differs from a sub-broker.
Brokerage firms require clients so they can function. To find new clients, brokerage firms hire individuals as independent agents. These are Remisiers. Hence, the main function of a remisier is to source new clients for a brokerage. A percentage of the sales conducted as brokerage will be received by them as earnings. To get hired by brokerage houses, remisiers need to enlist themselves within a stock exchange.
A sub-broker, on the other hand, is not an independent agent but still an employee of the brokerage firm. They act as extended branches of a brokerage. Their functions include a variety of things from acquiring new clients for the brokerage to finalizing trading on the client’s behalf. Their role also includes problem solving and management of clients. Hence, even in their definitions, there are subtle differences between these two types of intermediaries. However, the differences only magnify from this point onwards.
Remisier Vs Sub-Broker: Differences
When it comes to their office and business infrastructure there exist differences between sub-brokers and remisiers. sub-brokers typically require business infrastructure in place like an office space of their own. This may be a prerequisite of some brokerage firms when sub-brokers wish to work with them. For a remisier, there is no such need. Secondly, the manner in which both sub-brokers and remisiers earn is not very different. They both earn from commissions made on the sale of trades of the clients which they booked with a stock brokerage.
However, the amount they earn varies quite significantly, with sub-brokers earning more. A sub-broker has more responsibilities than a remisier when it comes to their clients and hence earns brokerage sharing of up to 60%. On the other hand, a remisier’s sole responsibility is to solicit clients for a stock brokerage. This brings us to the kind of job encapsulated within these roles.
A sub-broker has a broader role as part of the stock brokerage. They have the responsibility of not only soliciting clients but also offering all other services of the brokerage to the client. They take an active part in trading on behalf of the clients, aiding them in market research, and broadening their knowledge in general. A remisier does not possess these rights. This is why a sub-broker’s job requires much more time commitment, involvement, and remains full time. A remisier’s job is part-time in nature and allows for running other businesses on the side.
Even the licensing regulations between both these professions vary. When it comes to being a sub-broker, enlistment with the Securities and Exchange Board of India was mandatory but this requirement has now changed. However, depending on the brokerage firm, there may be on-boarding criteria for sub-brokers. On the other hand, remisier is required to enlist with a stock exchange before they can begin soliciting clients for stock brokerage firms.
Remisier Vs Sub-Broker: Which One Is For Me?
Many stock brokerage firms offer a partner program where one can apply as a sub-broker or remisier. For instance, with the IIFL has a Partner’s Program you can onboard clients completely online. Before applying to become an IIFL sub-broker or an IIFL remisier, assess which option is right for you. Both professions come with their set of pros and cons. To know which is for you, you should look at how much involvement you want to have in your job, and whether you wish to carry out other businesses alongside your position. If the latter is the case, being a remisier is more suited to your lifestyle.