Introducing broker experience

Discussion in 'Professional Trading' started by ChrisM, Jul 24, 2003.

  1. ChrisM


    I am about to start new biz as introducing broker in FX markets first and eventually registering with NFA as well.
    If anybody would share his experience in this area (esp. bad experience :)) it would be greatly appreciated.
  2. Well I just signed an IB agreement with a broker in US ...

    As for the bad experience ... I have been an IB with a broker in Greece.
    The bad experience is that they vanished with my money and my clients' money, and some of the clients hold me responsible now ...

    I started a legal pursuit against Hedley, hopefully we will recover the funds ...

    Be very carefull when approaching your clients to come, make them understand they do not deposit money with you, but with your broker, don't let them hold you responsible for your broker's mistakes.

    Also, read the agreement very carefully, they might post an "exclusivity" issue for a couple of years ... be sure you are willing to serve your broker and him only for a couple of years.

    Another thing ... it could be stated in your agreement that the agreement will end if one of the clients introduced by you has any complaints on your adress .... now imagine some loonatic complaining for what reason comes into his head .... your agreement could end because someone is frustrated because he lost money, or identified some slippage, requoting or whatever, and in revenge point at you ...

    Also, be sure that your agreement says that if it ends, you will STILL receive the comisions from coming from the clients you introduced ....

    If are not located in your broker's contry, pay attention to the tax payment, in most cases it is better that you would be taxed in your own contry ...

    Don't associate yout name with your broker's name ... this could bother your broker and could hold you responsible for your broker's missoperating ...

    What are the comisions you receive from your broker (if it's not confidential), and what do you charge your clients?

    If you want confidentiality, please PM me ... I will keep it for myself, any question you would have, shoot ....

    Good luck with your business
  3. ChrisM



    thx so much for insights. I deal only with registered NFA brokers based in US which should eliminate basic problems.
    I wonder whether is any database providing such info about brokerage companies besides NFA.
  4. I don't believe you will find such database ...
    Which broker will you sign with?
    I just signed and been approved by REFCO ...
  5. ChrisM



    one important question (if I may ask):

    did you negotiate or change any part of the agreement ?
  6. No, it all seemed OK ... the service also seems excelent ... till now ... if you are interested I can provide you with details about how it goes with them on the long run ...

    They have a nice back office also ...

    What is your broker ?

    Oh ... one question ... I am not a US resident or citizen ... I didn't ask about the taxing ... they should not tax me right???
  7. ChrisM


    As far as I know, if you stay over 180 days per year outside US, you do not owe taxes to US.
  8. That's what I thought ... don't pay taxes's heaven to deal with US and not beeing a resident/citizen ...
  9. Are you trading forex?
  10. ChrisM



    nope. I trade mostly options now. I am getting into this FX brokerage due to biz situation.
    #10     Jul 25, 2003