The terms and conditions are perhaps one of the most boring and lengthy of documents ever created. In most cases, irrespective of the context, people usually tend to skip or in some cases skim through the T&C’s. If you happen to be someone who actually takes the time to read through every dotted i and crossed t, well kudos to you.
Terms and conditions are boring and often missed out due to the nature of the T&C content itself. In some cases, T&C’s tend to get overtly complicated. In fact T&C’s existing for the sole reason to bite you in the back when things don’t go too well.
In this article we highlight five important aspects you should look into while signing up for a Forex IB/Affiliate.
Most often affiliates end up complaining once the affiliate campaign gets underway only after the affiliate experiences either a delay in payment, or well no payment at all.
Forex Affiliate/IB Terms & Conditions
Some of the commonly used terms and conditions clauses by forex brokers.
#1: Trader qualification clause
This is a clause that can be found in just about any Forex IB or Affiliate T&C. To gain context, the trader qualification clause deals with the criterion defined by the Forex broker which is used to qualify a trader that you refer. Criteria could vary from minimum deposit requirements to number of lots being traded and so on.
The trader qualification clause is something to focus on as it determines the criteria for you getting paid.
#2: Payment qualification clause
The payment qualification clause is perhaps the most “painful” clause you will get to see. In this section the broker outlines the criterion for paying out your commissions. While the payment qualification clause may vary from one broker to another, some of the commonly used criterion include:
- Affiliate/IB Payment is released only upon sending “x” number of qualified traders
- Affiliate/IB Payment is released only after the commissions reach a minimum threshold amount
- Affiliate/IB Payment is paid out only if there are “x” number of active clients referred during the specified period
The list goes on, but hopefully you get the idea.
#3: Incomplete Affiliate/IB details
In most cases, if you are careful before hand, this clause shouldn’t be a worry. But at times this aspect can be overlooked. The incomplete affiliate/ib details can range from the obvious, which is payments are held due to incomplete affiliate details or in the case of IB agreements, some brokers require you to sign and post the agreement copy via regular mail.
The incomplete affiliate/IB details clause, although simple to sort out can hit you hard when least expected. Most affiliates/IB’s usually tend to put this off until they see some referral activity and when the time comes to withdraw your funds, you are asked to submit the documentation.
#4: Blind stats until “X” number of traders are referred
A new approach employed some forex brokers is enticing IB’s/affiliates with higher revenue share. This approach usually works as the IB/affiliate is usually distracted from the very basic foundations of online referral. However, in fine print it is often outlined (and in some cases, not mentioned in the agreement at all) that you will be able to see your statistics only after signing up/referring a certain number of traders.
This can be quite a harsh clause and one that comes in at a later stage in time. As a rule of thumb, if a forex broker does not offer basic back-office management to monitor your stats, you are better off without promoting such brokers… unless of course, the account manager happens to be your friend or acquaintance.
#5: No tracking of demo accounts or demo to live conversions
You would be surprised at the number of brokers who don’t have the functionality to track demo accounts or demo to live account conversions. In forex, it is a common practice that traders usually prefer to create a demo account before diving in and funding their real account.
Often, not mentioned in the terms and conditions, this is an important point that affiliates/IB’s must verify before signing up to promote a forex broker. The chances of a demo account trader converting to real account is quite high as compared to promoting the broker to your website visitors.
You might notice that some brokers offer demo tracking for a period of up to 60 days. This is quite a normal practice and in most cases, if a trader has not created a live trading account within the first 30 days, the chances of them converting to real account is quite slim.
Prevention is better than cure
As the old saying goes, it is better not to promote a forex broker that comes out with predatory terms and conditions rather than falling for higher compensation only to realize that it was a wild goose chase all along.
Before signing up to promote a forex broker do not hesitate to ask your questions and settle only for concrete answers. Some forex brokers employ a strong marketing team that are able to convince you over the phone (in most cases) to compromise whilst promising you the sky. Chances are that mid way, you will realize that your efforts have gone to waste.
Play smart. Play Safe!