What Is an Affiliate Broker?

According to the affiliate broker definition, this is an individual or entity who acts to arrange transactions between a buyer and a seller while taking a commission when the deal is finished. If an affiliate broker also is the seller or buyer, they become a party that is principal to the transaction. Neither of these two roles should be mistaken for an agent, who is defined as an individual who works for the principal party in a transaction.

Typically, affiliate brokers are subject to laws and regulations depending on the type of brokerage and jurisdictions where they are operating and running transactions. Some examples of regulatory agencies for affiliate brokerages include the Financial Industry Regulatory Authority (FINRA) and the U.S. Securities and Exchange Commission, which both work to regulate brokerage firms throughout the United States.

What to look for in an affiliate broker?

There are a few key considerations to make when choosing an affiliate broker to work with. Here are a few of the most important ones you should keep in mind when making your decision. 

Qualifications and licensing

You first should make sure that the affiliate broker you’re working with is properly licensed and is adhering to all required regulations. They should be officially registered with the regulatory organizations of their country, and that they are abiding by all regulations held by that organization. 

Regulation is the number one indicator of reputation as far as affiliate brokers go, so you want to make sure they have a good reputation. Traders will never work with affiliate brokers who do not follow proper regulations. 

Experience in the industry

When looking for a broker to work with, you should try to find one that has at least a few years of experience in the industry. Yes, you could get lucky with a brand-new brokerage or broker, but you will not have any established industry experience or presence to ensure they know what they’re doing. 

As an experienced broker, they should have established their reputation before you work with them. If you focus on this, you won’t end up with a broker who doesn’t know what they’re doing. 

Service support

Any good affiliate marketer should be able to refer clients, traffic, and customers from all over the globe, so you should make it a priority to find a broker with good service support. This means that they have a multilingual capacity to service people from all over, including different countries, cultures, and languages. 

You may want to go with a local broker for specialized customer demographics, as they’ll understand how to provide the best service for their own country and language. 

Final thoughts

Now when you know what is an affiliate broker, you need to consider all important factors that will help you select a professional specialist to work with. By following the above tips we’ve outlined for you, you should be able to make an informed decision when looking for a broker to work with. 

Wondering how to avoid shady affiliate networks and traffic sources? Check out our blog!