Remisier Vs Sub-Broker: Who Strikes A best Deal

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Remisiers and sub brokers are two of the most important players in the capital market. While their roles are somewhat similar, there are also crucial differences in what they do. If you have just opened a trading account or even if you are an experienced investor, it is important for you to understand the difference between a remisier and a stock broker.

But before we begin explaining the differences, let us focus on the similarity in their roles. The key similarity is that both remisiers and sub brokers act as an intermediary between a stockbroker and clients. This is the only important similarity. They are quite different from each other in how they do their business, the money they make, and the services they can provide.

Additional Read: The Difference between a Sub- broker and a Stock Broker

Differences between remisiers and sub brokers

The meaning of remisier is a person who works as an independent agent of a stockbroker. A remisier gets new clients for a broker. In return, he gets a commission. On the other hand, a sub broker uses the brand of a broker to market his investment products to clients. To this extent, a sub broker is a broker’s extension. Often, a sub broker works on a franchise basis with a broker.

A sub broker uses a broker’s trading platform to help his clients execute their transactions. Therefore, a sub broker’s involvement with a broker is much higher than that of a remisier. A remisier does not use a broker’s trading platform. His job is limited to sourcing new clients.

Often sub brokers have their own office and support staff. Whether a sub broker should have his own office depends on the agreement he has with his broker. But this again shows that a sub broker acts somewhat like a branch of a broker. Sub brokers often hire staff who can help them efficiently deal with clients on a daily basis. This shows that sub brokers almost run a full-fledged business.

A remisier, on the other hand, is not required to have his own office space. Therefore, a remisier is a one-person operation. Being a remisier is more like being an agent than running a full-fledged business.

While both a remisier and a sub broker need to know about the capital market, a sub broker needs to also know about how to successfully run a business. Therefore, a sub broker should learn the rules and regulations of doing business. For example, if he has an office, he needs to know how many government approvals he will need. He also needs to know how to negotiate for and find the right office space. Compared to this, a remisier only has to know about how to be a broker’s agent.

As part of his business, a sub broker also has to convey the feedback of his clients to his broker. If he feels merit in the feedback, he should try to convince his broker to implement the feedback provided by the clients.

For example, if a client is finding glitches in the trading platform, then a sub broker has to communicate the same to his broker. A remisier is not concerned about such issues. As a remisier’s job-scope is much narrower compared to that of a sub broker, the former earns lower commissions compared to the latter.

Additional Read: Authorised person vs sub broker

Remisier vs Sub broker: How to pick between these two?

It is difficult to say which one is better between a remisier and a sub broker. Both business models have their benefits and limitations. Besides, brokerage firms in India tend to wok with remisiers and sub brokers both.

As we discussed, a sub broker is more involved in a broker’s business than a remisier. This is because a sub broker uses the brand and trading platform of his broker, which is not the case with a remisier. However, it requires a sub broker to invest more time and money in the business than a remisier.

Therefore, a sub broker’s is often a full-time job, while many remisiers work on a part-time basis. A remisier’s job is limited to acquiring new customers; however, a sub broker acquires new customers and also tries to build a long-term business relationship with them.

This requires a sub broker to handle the problems faced by clients and educate them in making investments, which is not something a remisier is concerned with. Therefore, a sub broker requires a lot more knowledge of the capital market and the economy than a remisier.

However, if you are a retail investor, how should you decide between approaching a sub broker or a remisier? It all depends upon your requirements. If you only want to open a trading account and are certain that you will not need much support in the future, you should approach a remisier.

But if you think you will need support in the future on a regular basis, then you should get in touch with a sub broker. If you have grievances related to a broker, then a sub broker will help you in conveying those complaints to the broker, which a remisier cannot do.

Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.

This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.

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