How does a stock market franchise work in India?

If we are really going to Europe, we might buy our own plane tickets and hotel rooms. However, we still prefer to book with an experienced travel agent who really can answer our questions and assist us in making informed decisions. Most of us appreciate the assistance that these tour operators provide. The travel agent receives commissions from hotels, airline companies, attractions, and transfer companies, and sometimes charges a fee for bookings. A franchise is similar. It serves as the central location for an investor to conduct his transactions.


This article defines a franchise, explains, and discusses its role in the stock market. You will also know the benefit of becoming an authorized person.


What is a stock market franchise India and how does it work?


A little background is needed to understand how well a franchise business operates.


Investors cannot place trades just on the stock market directly but must do so through a stockbroker. However, because the group of shareholders far outnumbers the multitude of brokers, investors will frequently see worth in placing trades through authorized agents. A stockbroker employs an authorized person (previously known as a sub-broker) to carry out transfer instructions from investor clients.


Account holders are appointed by a broker (or, way to look at it, must sign up with a broker) at an agreed commission rate, which is paid based on each profitable trade execution.


The Advantages of Being an Authorized Person


  • Income

On all trades put by their client investors, an AP earns a proportion of the brokerage accused by the broker. It means that agents are paid for each successful transaction they complete.

You can potentially increase your earning potential based mostly on the commission (or percentage of brokerage) that the broker offers you, the number of investors, and the frequency with which they place trades.

360-degree assistance


Of course, this depends on which broker users choose to work with, but you can usually count on a dependable support program that integrates:


  • Marketing assistance

Can one expect their broker to engage in appropriate marketing efforts (currently, digital marketing would seem to be the way to go) and to incentivize one another to acquire new clients and otherwise cross acquisition milestones?


Furthermore, authorized individuals receive assistance in his\her efforts thru marketing collateral such as flyers, pamphlets, research papers, and more.


  • Periodic training and updates


Periodic workshops & training on client onboarding & acquisition, new products, risk assessment approaches and tools, marketing and sales (client acquisition) suggestions and hacks, product/ service training, and refresher training are available to APs. The broker might provide training on how to use all of the software required to run your business.


  • Technical and infrastructure assistance

This is the most important factor for many authorized individuals. Technical support from the principal broker is required to provide clients with a smooth and trouble-free experience. When an authorized person spots a trade order, the broker usually acts quickly to ensure the trade goes smoothly.


  • Inventory Management Suggestions


To help an authorized person’s business, a brokerage firm provides important knowledge through market analysis & stock recommendations. They also provide authorized individuals with regular market reports, newsletters, as well as other literature to help agents stay on top of things.


What are bonus shares?


A bonus share is a free share given to a company’s existing shareholders. A bonus share issue is also known as a scrip issue or a capitalization issue. These are additional stocks distributed to shareholders at no additional cost. For instance, if a company declares a 1:1 bonus issue, each shareholder receives one free share for each share owned. As an example, a shareholder who owns 10 shares in the company will receive 10 bonus shares, bringing their total to 20 shares.

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