Introducing Brokers are persons or organizations that provide investment counseling or advice to investors that want to start trading in the foreign exchange market-Forex. They will not perform the trades of their clients, but they are able to supply the tools that a new trader might need to be successful as well as they can explain all that is related with the Forex market since they have the expertise and the knowledge of the market.
Usually, introducing brokers have a vast experience that allows them to help their clients and fully explain how the market works and the risks that an investor might face. IBs also provide training that is the key of being successful and avoid common mistakes especially for non-experienced traders.
One of the advantages of introducing brokers is that they provide excellent customer service for their clients; also, they provide support and take care of each client´s account which is almost impossible to get from a big brokerage firm.
The work of introducing brokers is also important for brokerages, IBs bring new clients to the firm, that’s why they are considered the sales department in the Forex market. Their work goes beyond recruiting investors; IBs will also teach about Forex tools and the use of the platforms and can provide guidance when opening accounts to help the clients find the one that matches their necessities. They make a profit by winning a rebate from each trade their clients make, that means they are very motivated in helping their clients to be successful and their role in the Forex market is highly appreciated by brokerages. Besides bringing in new investors, they are constantly spreading the benefits of the Forex market and this is valuable for the companies. Also, by bringing in clients constantly to the brokerage they also help to create a good reputation for the firm.
When hiring introducing brokers it is a good idea to research about the person or firm and to find out if you feel comfortable with them so you can make sure you are going to enjoy all the benefits they can provide you.