ICICI Direct Franchise setup is said to be a pioneer in floating the sub brokership concept in the financial market.
About ICICI Direct Franchise/Sub Broker/Partner
ICICI Direct Franchise launched this partnership offer in 2003. ICICI Direct was one of the institutions which identified the increasing trend towards financial market and investment business. It also realized that to serve this increasing incline, there needs to be certain retail channel to capitalize on potential investors from smaller cities. Thus, it offered a partnership as a sub broker which would serve a potential investor with all its investment requirements by way of a physical presence. Another reason for floating this business was limited access to internet for such small city investors and the lack of knowledge in this market.
By 2012, ICICI Direct Sub Broker program had set up 212 own outlets which were mostly in tier I city. For serving the clients from tier II cities, franchise model was adopted. The records for year 2012 show that ICICI Direct served 428 location with 1050 franchised outlets.
ICICI Direct’s franchise models are very much suitable for anybody who wishes to take up the entrepreneurship role with a nominal capital investment.
It offers two models of partnership:
- Investment associate
The two categories are differentiated by the experience and skill set expected from the partner. These are discussed below in detail.
ICICI Direct Sub Broker/Franchise/Partner program
ICICI Direct Sub Broker model is offered to candidates who hold an experience in financial market. The expected experience ranges from 1-3 years. Apart from this, it also requires the candidate to be capable of making certain capital investment for setting up infrastructure. Needless to say, it has prescribed minimum age limit of 20/21 years, educational qualification and registration with SEBI and relevant stock exchange. It also mandates a certification from NISM that is a capital market certification.
A sub-broker, unlike an IA, deals in all the offerings of ICICI Direct i.e. equity, derivative, mutual funds, bonds, IPOs etc. Also, under this model, sub-broker would undertake the order on behalf of the client and will not be mere a route like that in case of IA model; though the settlement risk would be borne by ICICI Direct still.
How to become ICICI Direct Franchise/Sub Broker/Partner
To initiate a business relation as a ICICI Direct Franchise, one can visit their website and fill up the form with basic personal details. Their relations team would connect with the candidate and take things forward from there.
While appointing as a sub broker, ICICI Direct partner team, looks for someone who can help them in expanding their outreach and their business. Thus, they would prefer people with strong inter-personal skill who can build, develop, maintain and enhance client base.
Upon finalization of the proposition among the parties, an agreement needs to be executed between sub broker and ICICI Direct.
ICICI Direct Partner/Sub Broker/Franchise revenue sharing model & fees
ICICI Direct Partner revenue sharing ratio
With respect to the revenue model, it is in line with the model adopted by other brokerage houses. Further, ICICI Direct franchise also offers a very competitive ratio which may range from 40% to 75%, depending upon various factors.
ICICI Direct franchise initial investment amount
Though, it has not prescribed any initial capital investment, but, depending upon relevant factors, it may ask for an initial margin deposit which would be towards coverage of default risk. Apart from this, ICICI Direct prefers a set up of basic office infrastructure (say a minimum of 200 sq. ft.) which may call for an initial investment of INR 1-3 lacs. It also prescribes a breakeven tenure of 18-24 months. However, it does not require its sub-broker to maintain any back office, a mere front office with a good internet connectivity would suffice.
Support from ICICI Direct Sub broker setup
At the beginning phase, ICICI Direct provides a two day induction training to a new sub-broker wherein the sub-broker is introduced with the ICICI Direct’s offerings, the modus operandi, the functionality, the practices, the values etc. Apart from this, one can expect a detailed product training from time to time, system training – educating on the IT infrastructure and the interface and compliance training. Needless to say, ICICI Direct partner program also provides marketing support to a sub broker by way of supplying relevant marketing and advertising material. It also conducts seminars and events periodically to help the sub-brokers in building up network. ICICI Direct franchise also provides support on the research front. It ensures that the sub broker is well aware on the market trends, the market forecast so that he/she can guide the client base appropriately.
ICICI Direct Franchise/Sub Broker/Partner Offers
ICICI Direct floats varied offers for its Sub Brokers from time to time. These offer may either be in form of reduced initial investment amount or increased share in revenue. Apart from this, ICICI Direct also floats offers wherein the it agrees to contribute along with the business associate to build up necessary infrastructure. ICICI Direct also conducts training and education programmes for a business associate with a strong client base.
ICICI Direct Investment Associate
ICICI Direct Investment Associate partnership is offered to rookies i.e. for beginners and hence does not demand any experience in the industry.
As an ICICI Investment associate, one can deal in the products like Bonds, IPOs, Credit products like home loan, personal loan etc., fixed deposits. Further, if one has a certification from AMFI, he can also deal into mutual funds. Similarly, for dealing in wealth products, it requires a person to have I-sec certification. However, this model does not offer dealing in equity and derivatives.
Under this model, the partner merely connects the customers with ICICI Direct and does not act on behalf or serve to the customer on behalf of ICICI Direct.
How to become ICICI Direct Investment Associate?
To opt for ICICI Direct Investment Associate partnership, one can visit their website and fill up the basic contact details. Thereafter, the concerned team gets in touch with the candidate and takes them through the details of this model, the expectations from the candidate, the support that would be provided by ICICI Direct, the revenue offered, the details about fee etc.
Upon being ensured of the candidate’s eligibility, ICICI Direct and the candidate execute an agreement wherein the relevant terms and conditions are documented like the tenure of validity of such agreement, the fee, the revenue model, the compliance, role and responsibilities to be undertaken by the parties.
ICICI Direct Invest Associate revenue sharing model & fees
ICICI Direct Investment Associate revenue model
The revenue model herein differs from case to case. Generally, the revenue model would be such that for every product sold via IA, ICICI Direct remunerates a proportion of the value of that product. The proportion may vary from case to case, generally, this proportion is 30% to Investment associate & 70% to ICICI Direct.
ICICI Direct Investment Associate initial investment
Typically, ICICI Direct charges a fee of INR 7,000 to 20,000 for registration as an investment associate. Under this model, no additional investment is expected from the candidate. As mentioned above, under this mode of partnership, the candidate is not required to shell out any capital for infrastructure investment.
Support from ICICI Direct Investment Associate program
ICICI Direct lends support to IA by helping them in developing business development skills, educating them about the product offerings, the mechanism of the industry/market, technical aspects, developing their analytical skills. It also gives a platform to an IA to get promoted as independent financial advisor i.e. IFA. This promotion is based on various factors like the clientele, the quantum of business through the clientele. Once promoted to an IFA, the person is provided access to online platform of ICICI Direct and thus can independently assist the clients in making investments.
Why Partner with ICICI Direct?
ICICI Direct Franchise has two different business models to choose from
ICICI Direct Sub Broker program provides end to end support to sub brokers
A dedicated relationship manager is provided to ICICI Direct Partners
ICICI Sub Broker setup conducts regular trainings for the business associates
ICICI Direct Franchise has a good reputation and is a renowned brand
Products & Services are quite varied from ICICI Direct Partner program
ICICI Franchise provides access to the research reports