What Does an Introducing Broker Do? A Complete Guide to the Role and Responsibilities

BiFu Research · 2026-06-20 · 2 min read

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An introducing broker (IB) operates by referring clients to a prime broker. This article explains the IB's duties, how the model works, and the relationship between introducing brokers and prime brokers.

An introducing broker (IB) plays a key role in the financial markets. By referring clients to an executing broker, the IB earns commissions without needing to hold client assets or execute trades directly.

Core Responsibilities of an Introducing Broker

An introducing broker is responsible for finding and referring potential clients but does not handle trade execution or fund custody. Key duties include: providing market education and advisory services to clients; assisting clients with the account opening process at the prime broker; maintaining client relationships and offering ongoing support; and earning commissions based on the trading volume generated by referred clients.

Differences Between an Introducing Broker and a Prime Broker

A prime broker handles actual trade execution, holds client funds, and provides trading infrastructure. An introducing broker focuses on client acquisition and relationship management. The two form a complementary partnership.

Advantages of Becoming an Introducing Broker

The introducing broker model offers a flexible business opportunity for individuals and institutions. Without requiring significant capital investment, IBs can generate a steady income by building a client network. This model is widely adopted in the global forex and CFD markets.

Regulatory Compliance Requirements

Introducing brokers are typically required to register with relevant regulatory authorities and comply with applicable regulations. Operating in a compliant manner not only protects client interests but also helps safeguard the IB's own reputation and business sustainability.

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