What are Forex Affiliate Programs & IB Programs?

The Ultimate Guide to Forex Affiliate and IB Programs for Beginners

Referral or partnership programs are common participation models outside of trading. Participants in these programs generate revenue through commissions. There are two main types of partnership programs: introducing broker (IB) program and forex affiliate program. Neither one is objectively better than the other – they are simply two different business models. This article will explore what an IB and an affiliate are, their key differences and how they make money.

What is a Forex Affiliate?

A forex affiliate is a person or business that receives a commission every time they refer a new trader to the broker. This method of payment is called ‘cost per acquisition’ (CPA), which is the flat one-time payment.

Those in forex affiliate programs typically publish valuable content about forex trading on their websites, YouTube channels and social media accounts, attracting potential traders. A broker gives each forex affiliate a unique link for them to include in their content. Viewers who click the link are taken to the broker’s website and if they open a trading account, as well as meet any other certain conditions set by the broker (such as making a minimum deposit), then the affiliate earns a commission. That is the core of how a forex affiliate program works.

What is an Introducing Broker?

An ‘introducing broker’, commonly called an ‘IB’, is a person or business that receives a commission for every trade placed by a client that they referred to the broker. This commission is called a ‘rebate’, which is a small portion of the trading fees from the trade placed by the client.

An introducing broker typically aims to have long-term relationships with the traders in their network by providing ongoing education and support. This could include helping them open an account, teaching them how to use the trading platform or sharing educational content about the markets. IB’s must be cautious as not to provide specific financial advice and/or manage client funds, as they are not authorised to do so. Their main purpose should be to educate, not influence trading decisions.

An infographic highlighting the key differences between an introducing broker and forex affiliate program.

Key Differences Between a Forex Affiliate and an Introducing Broker

There are three main differences between introducing broker and forex affiliate programs:

1. Client Relationship

Affiliate: There is effectively no direct relationship or interaction between the affiliate and the referred client.
IB: The relationship between the IB and referred client is very hands-on. There is direct communication between the two, with the IB providing support over the period of the relationship.

2. Payment Model

Affiliate: A one-time payment per referral. The more clients that an affiliate brings in, the more money they make.
IB: Rebates every time their client makes a trade. The more trades their clients place on the broker’s platform, the more money the IB makes.

3. Level of Involvement

Affiliate: They concentrate their focus on marketing by creating content and increasing traffic to get as many sign-ups as possible.
IB: They spread their focus across marketing, to get referrals, and support, after a referral has been made.

Comparison of revenue models: CPA vs Rebates. CPA model being the affiliate program and the rebates model being the IB program.

How to Choose the Right Partner Program

The ‘better’ program really depends on how a person prefers to do business. It ultimately comes down to business goals and the preferred method of interacting with the audience or clients.

A forex affiliate program is more suitable for:

Digital marketers e.g. social media, high-traffic website/blog.
Low-touch client engagement - a good option for those who want to remain anonymous.
Concentrating all focus on creating content and driving traffic.

An introducing broker or IB program is more suited to those who:

Are educators/mentors who enjoy relationship-building and providing hands-on support or training to clients.
Have a direct network of people interested in trading.

A decision tree to to help a person decide whether they are more suited to being a forex affiliate or introducing broker.

What is also important is choosing the right broker partner for an introducing broker or forex affiliate program. This goes beyond just going with the one who pays the most commission. It is important to consider the following:

Regulation: Are they licensed by a credible authority?
Execution quality: Brokers must have fast, reliable order fills with minimal slippage. Otherwise, clients will leave, taking their rebates with them.
Payout structure: Unusually fast or high payout promises could indicate the broker is cutting corners on compliance and financial checks such as AML or liquidity audits.
Support: Is dedicated affiliate/IB support available?

At the end of the day, it comes down to which broker can be trusted to deliver the best experience for the clients, as this will affect the credibility and reputation of the forex affiliate or introducing broker.

An infographic highlighting the key things to look out for when evaluating a broker for a forex partner program.

EC Markets' IB Program

EC Markets is a multi-regulated broker offering a partnership program for introducing brokers. The key advantages for partners include:

Multiple regulations — licensed across several major jurisdictions: FCA, ASIC, FMA, SCA, FSCA, FSC and FSA.
Multi-level IB structure — customisable commissions and dedicated account management.
Best IB rebates in the market — higher rebates than any competitor in the industry.
Instant rebates — commissions automatically paid once positions are closed.
24/7 client support — referred clients are supported around the clock.
Flexible trading environment — multiple account types and copy-trading solutions available to clients.
Industry recognition — highly rated across leading financial platforms (Finance Magnates, WikiFX and Rankia).

Interested in partnering with EC Markets? Find out more on our Partnership page.

Conclusion | Forex Affiliate vs IB Program

Affiliate and IB programs are two separate ways that brokers work with outside partners to grow their client base. Affiliate programs are built around marketing and acquisition. IB's are all about ongoing client relationships. Which model suits a person best comes down to their skills, resources and preferred way of working.

Note:
This content is for general information and educational purposes only and does not constitute investment advice or a personal recommendation. Any examples are for illustration only and should not be treated as a signal or invitation to trade. This material does not take into account your investment objectives, financial situation or needs. CFD trading is high-risk; losses may exceed deposits.