I have to ask, I want to start my own brokerage business, and I would like to hear from the professionals if it's better at first to start as Introducing Broker and when things get better to go full BD?
An Introducing Broker is a FINRA Broker Dealer that has relationships with Prime Brokers. Not as easy as you think to start from scratch. Most Prime Brokers are not looking to add relationships. Also, not cheap.And, FINRA approvals are not easy to get.
I am reading what's on the NFA web site http://www.nfa.futures.org/nfa-registration/ib/index.HTML and also on Gains capital http://www.gaincapital.com/partners-whitelabel.shtml It seem's easy, I have to give them a call tomorrow and see what is exactly they want to start this.
today I have notised that one of the brokers that I have an account with is not a Broker dealer, Options house, they are Introducing Broker to a bank in Canada.
OptionHouse is a FINRA Broker Dealer owned by Peak6 Investments. They use Apex Clearing as their Prime Broker, which Peak6 owns 6% of and Peak6 people run day to day operations.
Maybe I'm not being clear. EVERY Introducing Broker is a Broker Dealer. Not every Broker Dealer is self clearing. Why is that an issue for you?
That is a another issue. At all these "discount" brokers, they offer a smart route. Your order goes through a dark pool first, then to an exchange, maybe. This has nothing to do with being an introducing broker. This has to do with if your being offered full DMA access to the exchanges. At a firm like TD Ameritrade, you will have the same issue. They self clear but get payment for order flow from firms like Knight Capital. Even a firm like IB charges extra for non smart route orders.