Many experienced, successful commodity brokers and traders consider opening their own brokerage firms. Their income would significantly gain and opportunity. On the other hand, the venture also involves a lot more work and responsibility.
Being a commodity broker or opening a brokerage firm can be your choice. From now on, you can consider the right choice for your own career.
Working as a Brokerage Firm
Being a brokerage firm is able to negotiate a good commission split or bonus plan. The better you perform, the more strength you’ll have in negotiating a good compensation package.
You can also provide administrative support as well. The support team offers leads, mentoring, training, trading terminals, and sometimes a credible and respected company name. All of these can help the broker conduct more business and earn more money.
Starting Your Own Brokerage Firm
When you open your own brokerage firm, you can run the business any way you prefer. You’ll have the freedom to prosper without anyone holding you back when you’re your own boss.
You’ll also receive all commissions on any business you do. 100 percent of all your commission transactions will be kept. You can also leverage the efforts of other brokers you bring onboard.
On the other hand, the challenge is at the part of a new company. A new company most likely won’t have any real name recognition behind it and you may find attracting new clients to be your biggest hurdle.
Another consideration is whether you’re going to open a full-service brokerage or discount brokerage. You’ll have to manage the trading and open new accounts as a full-service firm while simultaneously running the business. This might be more work than you expect or want to manage.
Can You Take Your Clients With You?
Brokers can position themselves to make the change if they have a large book of clients they can take to their new firm. However, most employers make you sign a non-compete agreement if you’re going to work for their brokerage firm. They don’t want you to take clients or proprietary information with you when you move on.
You can make a good case for taking your clients with you if the brokerage firm didn’t fully train you and open your accounts.
A brokerage firm that pays for leads and covers all your expenses will have a good argument against you. But, if you brought clients in through personal relationships and paid for some of your own expenses without signing a non-compete agreement, you might be successful.