How IB commissions work: the structures brokers actually use
Per-lot rebates, spread share, CPA and multi-tier plans: how brokers pay introducing brokers, and what the system behind it must get right.
Introducing brokers, or IBs, bring clients to a broker and are paid for the trading those clients do. For many brokers they are the main source of growth. The commission plan decides which partners you attract and how long they stay.
The four common structures
Per-lot rebate
The IB earns a fixed amount for every lot their clients trade. It is easy to explain and easy to audit, which is why it is the most common.
Spread or revenue share
The IB receives a percentage of the spread or of the broker's revenue from their clients. It aligns the partner with the broker's income but is harder for the partner to verify.
CPA
A one-off payment for each client who meets a condition, usually a first deposit and a minimum amount of trading. It suits affiliates who drive volume but have no ongoing relationship with the client.
Hybrid
A smaller CPA plus an ongoing rebate. It gives partners cash early and a reason to keep clients active.
Multi-tier plans
Larger IBs recruit sub-IBs. In a multi-tier plan the master IB earns a share of what their sub-IBs generate, across two, three or more levels. The arithmetic gets complicated quickly, and it has to be exact.
What the system must get right
- Attribution. Every client linked to the right partner, permanently, from the first click.
- Calculation. Commission worked out per trade, per symbol group and per tier, the same way every time.
- Visibility. A partner portal showing clients, volume and earnings in near real time.
- Payout. Scheduled payments with an approval step and a full record.
- Abuse controls. Detection of self-referral and trading done only to generate rebates.
Mistakes to avoid
- Promising a plan your software cannot calculate. Bring the real plan to the CRM demo.
- Paying on volume alone, with no check on how the volume was produced.
- Leaving partners unable to see how their commission was worked out.
Partners who promote your brand are also bound by the advertising rules that apply to you, so agree what they may and may not say.
Related: what a forex CRM actually does.
Questions people ask
What is an introducing broker in forex?
An introducing broker refers clients to a broker and is paid a commission based on those clients' trading or on each qualifying client referred.
What is the most common IB commission model?
A per-lot rebate: a fixed payment for each lot the referred clients trade. It is simple for both sides to check.
How are multi-tier IB commissions calculated?
Each trade generates commission for the direct IB and a smaller share for each level above. A CRM with a multi-level partner module calculates and records this automatically.
This post is general information about technology and the brokerage industry. It is not financial, investment, legal or regulatory advice, and it is not an invitation to trade.