The role of the IB is a pinnacle in the wold of trade; however, the World Wide Web revolution may have impacted this role substantially along with other factors that have blurred the lines.
Now for a little history lesson; let us examine how the meaning of this term has changed over the years. When the industry was only just building itself, IB’s served as regulated firms that handled customers’ orders and passed these orders on to a Merchant that is authorized to handle client funds and their investments. What IB’s once represented resembles the role of the Account Manager today. Some of their responsibilities include helping investors understand the risks of the market & providing education. Introducing Brokers always stood out for their expertise and in knowing information the general public didn’t really have access to.
So how did the crucial role of the IB progress over time?
Firstly, it is worth mentioning that America is usually where the domino-effect wave begins and spreads across the globe. An important event in IB History is the MF Global bankruptcy and the PFG fraud of 2012. In a Survey made in the late spring of 2015, nearly 60 percent of all respondents felt they were still losing income as a result of this event. Was it the IB’s fault? No. Did they take the fall for it? Yes. This event probably marked the biggest wave of changes in IB history. Whilst IB’s try to restore the trust back from forex clients; so do Brokers.
Today, trading has become available to the public and reaches a much wider audience. Brokerage firms take the front seat with the services they provide; in the sense that departments within a firm have multiplied. People looking to invest no longer have to rely so much on middlemen to decide where their money should be; there is a direct portal from your pc to the market, and all the information is there for true seekers. Most importantly the internet makes the trader the protagonist; in a sea of choice and ever-growing competition; customers can be a tough crowd.
So with these facts in hand what does the future hold for Introducing Brokers? For people looking to get into this business perhaps this time is better than any other. Why? Well, if you paid any attention then you would know by now that the web opens portals to a wider audience and allows IB’s to determine their own business style. It is noteworthy to add that most IB’s nowadays are one-man operations working on a more personal level; this means that the profession has become more accessible. People will always require guidance; especially in a ‘busy’ driven society, it comes down to adapting to the needs of each era.
To sum it all up, anyone looking to trade the markets should be at least partially informed of the operational technicalities and examine entities before trusting anyone with their money. IB’s can assist with this process by devoting the time other’s cannot to create better conditions for their clients and build strong relationships with brokers. There is serious money to be paid and solid interpersonal business skills acquired.