Forex brokers want you to think that anyone can make it as an IB. Even though this is theoretically true, some businesses or individuals are better positioned than others to operate as successful referring brokers. Here is a list of businesses and individuals we have dealt with over the years that are well-positioned to become successful Forex IBs:
- Stock or Futures Brokerage Firms or Brokers – Brokers are naturally good IB candidates no matter what asset class (stocks, futures, etc.) they specialize in, because their clients will be more familiar with trading and market risk.
- Small Foreign Banks – Banks that want to hedge the local currency risk of their clients or diversify into online currency trading or FX asset management might also want to become Introducing Brokers.
- Profitable FX Traders – Successful traders may want to offer money management or other services to investors through a referral agreement with a good currency broker.
- Financial Services or Advisory/Asset Management Firms – Non-bank/broker firms or professionals in financial services such as insurance companies, investment advisors, asset managers, financial planners, etc. may find that a business in foreign exchange can complement the existing portfolio of services they offer their clientele.
- High-Traffic Websites – Sites with large traffic bases may benefit from branching out into Forex as IBs. The type of industry the website is in can increase the conversion rate of its traffic immensely. For example, financial, gaming, and casino sites will usually experience more favorable results when they diversify into FX than will other websites.
- Prop Trading Firms – Proprietary Trading companies that trade stocks or futures can easily add currencies to their mix of tradable instruments. This will diversify their operations and could increase their operating income and the reliability of their cash flow.
- Trading Rooms or Educational Providers – Organizations that provide trading education through physical or virtual trading rooms typically experience a high rate of success in the introducing brokerage industry. Professionals who teach trading seminars or courses might also find becoming a referring agent financially rewarding.
- Businesses with Trusted Relationship with Wealthy Investors – Access to high net worth or influential investors always makes it possible to benefit from the managed account segment of the Forex industry.
Please note that the list above is not all-inclusive by any means. If your business does not fit any particular model above, it doesn't mean that you cannot succeed as an IB. Based on our experience, however, the businesses types above have a better chance of making it in FX.