Thinking of starting a share market business, but thinking which business types suit you? As there are stockbrokers, sub broker and there are remisier, but to pick the right business, it becomes important for you to understand the difference among them. To begin with, let’s discuss Remisier vs Broker.
On one hand, where broker plays a vital role in providing trading platforms to their clients, remisier helps in increasing stockbroker business by bringing more potential clients.
To understand how to become a remisier or stockbroker and other major differences here is the complete information of Remisier vs Broker.
Remisier and Broker Difference
Let’s make a simple start, a stockbroker, the one who acts as a bridge between a stock exchange and investors/traders. One can open a demat and trading account with the stockbroker and in turn, the stockbroker offers a trading platform that helps them to trade across segments online.
For every trade, the broker earns a commission depending upon the brokerage plan they offer.
But who is remisier?
A Remisier is someone who fetches the investors or clients for a brokerage firm while working individually and independently.
They are registered with a stockbroking company that asks them to bring more potential investors for them. In return, a Remisier gets a certain percentage of a successful deal as a commission. Remisier commission in India further depends upon the broker they get registered with.
Let’s discuss a few more differences between the two on the basis of registration, earnings, and services they offer to their client.
Now when it comes to the registration part, the stockbroker must register themselves with SEBI and stock exchange.
On the other hand, the remisier should register themselves with the respective stockbroker for whom they want to refer traders and investors.
2. Products & Services
To understand this, let’s consider an example.
Think of a broker as an intermediary person who helps you get a car. An auto broker finds your desired vehicle, finds the best dealer on your behalf, and does all the paperwork to ensure a smooth car buying experience.
Similarly, the stockbroker offers you the trading app, research tips to pick the right stocks depending upon your trading style, advisory, etc helps you in executing orders through the simple UI of the trading app.
A Remisier however, has only one job- acquire new clients for the company and the company then takes care of the rest of the things. Think of them as a person who helps you rent a house in a new city.
This person only helps you establish a connection between you and the house owner and the rest of the deal is finalized between the two involved parties.
So here the remisier performs the duty of recommending the best trading platform to potential investors and traders and also the potential clients to stockbrokers. His only duty is to refer a client, the rest of the services and role is performed by the respective stockbroker.
Here lies the major difference between the two.
Stockbroker charges certain brokerage on every trade, this varies from broker to broker. Full-service stockbroker imposes the brokerage on turnover value, while the discount broker comes with the flat-fee model where trader or investor needs to pay the fixed amount for every trade.
So, let’s say, a broker charges 0.5% on intraday trading and has 10000 active traders who actively trades using the platform with an average turnover of ₹10,000,000 per month.
The brokerage would be 0.5% of 10,000,000 i.e. ₹50000.
This would be the per day income of the stockbroker as per the above condition.
On the other hand, when it comes to the earnings of Remisier, he or she is eligible to make an earning on every referral they provide and further on the commission percent on every brokerage of the referral.
Considering an example, let’s suppose, as a remisier you refer 500 clients in month. For each referral, the broker pays you ₹250. So here the total referral bonus would be 500*250 i.e. 125000. Now out of these, only 30% i.e. 150 are trading actively generating the brokerage of ₹50000.
As per the broker’s remisier model, you can avail 30% on the brokerage, so here your share would be ₹15000. Thus total income would be ₹27500.
4. Initial Investment
Now to become a broker, one needs to do a hefty initial investment to get registered with the regulatory body, exchanges, etc. Further, the broker has to set up the office space to operate the entire process of opening an account, offering trading services, and an advisory department to provide additional benefits to its clients.
On the other hand, there are Remisier, who can work individually or with the small team without any initial investment. To get started, he or she just has to open an account with the stockbroker and fill the remisier form to begin the referral program.
5. Brand Recognition
Apart from the working models, the other massive difference between a Remisier and a Broker lies in the fact that a Broker can use the brand name of a company to fetch new clients.
If a company is highly reputed and well-trusted, it gets slightly easier for brokers to bring new clients on board while since Remisiers work independently, they have to rely solely on their own convincing skills, their networks, and their own reputation among the potential clients.
This can be a bit challenging for someone who is new and starting to build their network.
Advantages of Becoming a StockBroker
Some of the benefits of becoming a stockbroker are:
- Good earning
- Brand identification
- Chances to earn money irrespective of the market condition.
Disadvantages of being a Broker
Along with advantages, there are some disadvantages too:
- Challenging job
- Responsibility of Trader’s funds.
- Heavy initial investment
- Requires office space
Advantages of being a Remisier
Now let’s have a quick look at the advantages of becoming a remisier:
- No requirement of doing exhaustive market research.
- Can work as per their convenience.
- Good option for those who wants to begin their career in stock market.
- No initial investment
Disadvantages of being a Remisier
Here are some of the disadvantages of Remisier:
- Low scope of earning.
- Unstable income.
- Challenging for those with little or no networking.
Should you become a Broker or a Remisier?
After going through the complete detail of broker vs remisier, the answer to this question relies solely on your own personality, convenience, commitment, and financial requirements of course. For example, if you are someone who can not commit too much time, then being a Remisier is a better option because it doesn’t need you to do detail-oriented Market Research.
Networking also plays a key role in making this decision. If you have an established network already, then you already have an upper hand given that you want to become a remisier. Without networking, it is going to be a bit more challenging.
And of course, you need to take the amount of money you will earn into consideration too. If you already have a source of income then being a remisier is going to add a bit more to your bank account and you can treat it as a passive or secondary source of income.
However, if you want to earn only from acquiring clients for a brokerage firm then, being a broker is a better option for you because it gives you an option of earning more through commissions.
In a nutshell of Remisier vs Broker, being a broker has certain requirements, including the financial aspects of it (and it comes with certain other advantages too of course), being a remisier is a lot more convenient for people of every category. You can also try your hand at it.
Anyone with the required knowledge, skills, interest, and enthusiasm can become a remisier. You just need to sit down, assess your personality, and ask yourself some questions before coming to a decision.
Looking for a reliable stockbroker to become a sub-broker? Get in touch with us and we will help you in completing the registration process: