When you first get into the world of trading, it can feel intimidating, to say the least. There are just so many types of professionals out there that choosing the ones to work with requires some homework. Perhaps you have wondered about the differences between Introducing Broker and White Label. They are certainly not the same. Let’s investigate what the differences are and what the individual benefits are.
What is an Introducing Broker?
The Introducing Broker or an IB, as they are commonly known, is someone who introduces new clients to a broker’s services. The IB is the third party who is the face that takes the new clients to the Main broker.
They are rewarded for the work they do in a few ways:
Fixed Fee:
They may get a fixed fee return for every client they get from a broker. The fixed fee will vary depending on the type of account and the amount of deposit money the new client puts into the broker’s service for the first time.
Spread Share:
They may also get a spread share which means they get paid in rebates and commissions every time a client makes a transaction.
While most IBs are one-man operations, some of them are big firms in themselves. It is not difficult to become an IB. One simply has to sign up with a brokerage service to start offering their service.
What is a White Label Trading?
The White Label is not an individual but a brokerage service with its brand and name instead of just referring new clients to the main broker. A White Label will agree with an existing brokerage service to operate under its name and brand while getting full access to the brokerage’s trading platform.
The truth is that the White Label works in the same manner as an Introducing Broker. But since it’s a firm in its own right, it has its brand and its name. Also, it cannot be denied that the White Label will get far more facilities than an IB on a trading platform.
They are allowed to have their name and brand and a logo on the brokerage’s training platform and manage their client base in a way they deem fit.
They are not just a bridge between new clients and the main broker, but they do a lot more.
Benefits of Using an Introducing Broker
There are many. Here’s a little look at the most important ones:
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A Guide
This is perhaps the most important reason for people to look for an IB when they are thinking of starting trading in different commodities. IBs are allowed to connect different people from different locations with brokerage services. Without an IB, a local trader will find it difficult to connect with an international brokerage service due to language issues and other hurdles. But IBs make it possible for traders from different backgrounds to trade under one platform.
Especially if you are starting in the world of trading, an IB can be particularly advantageous.
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Reasonableness
Get the voice of reason when you choose to go with an IB. IBs are given a license to operate and have to meet certain requirements by the brokerage service. This ensures that they are a voice of reason for their clients and help them navigate the world of trading.
An IB can guide clients in a way so that they don’t spend money on brokerage or trading platforms that are scamming. This helps keep the network clean.
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Expert Help
If you are a beginner, it is usually the case that you don’t have a lot of information about trading activities happening around the world. This is where an IB can undoubtedly help by giving you expert help. Whether it is pointing you toward the right brokerage service or helping with finding the right commodities to trade, an IB can help. They can give you good answers to any queries you might have about trading.
Benefits of Using a White Label in Trading
Choosing a White Label to start trading with comes with myriad benefits.
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Low Barrier to Entry
Instead of opting for the main brokerage service, many choose to go for a White Label firm because it offers a low barrier to entry. This means you get the regulatory framework as well as the trading platform of the main brokerage service, but don’t have to trade directly with one.
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Lots of Experience
A big plus point for White Label firms is that most of them will have quite a bit of experience working in the trading industry. It is that the trading world sees innumerable ups and downs and as such, experience matters a lot. When you trade through a White Label firm, you are doing yourself a favor because you know you are going to get the benefit of experience.
The professional workings with a White Label will be much more experienced and will be able to offer you better expert help than an IB.
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More Perks
A White Label gets more advantages from the brokerage service than an IB. So, they are more likely to pass on the benefits to their customers. This is good news for you.
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Customer Support
A White Label firm is more likely to have its own employees and customer support. With an IB, you must go through the main brokerage service’s customer service which is mostly going to be busy. By getting connected to people who can help you make the trades easily when you choose a White Label so you can succeed.
As a trader, it can be confusing to choose between an IB and a White Label firm. But if you are just starting in the trading world, it may be easier for you to start with an Introducing Broker. And then move on to a White Label after you reach a level of expertise. This will help you make the right decisions and go for a smarter way to trade.
