Last updated: September 2026 · Reviewed by the Partner Federation partnerships team, with two decades of combined experience in online trading and brokerage partnerships.
On this page
- What is a Master IB / Sub-IB structure?
- How the override cascade works
- Worked examples: two-tier and three-tier
- Master IB vs. Sub-IB: role comparison
- What determines tier earnings
- Who this suits best
- Pros and cons
- Risks and operational pitfalls
- FAQ
What is a Master IB / Sub-IB structure?
A Master IB / Sub-IB structure is a hierarchical partner network where a Master Introducing Broker (IB) recruits Sub-IBs, who may in turn recruit their own downstream partners — with override commissions cascading upward through each level whenever a trader anywhere in the network places a trade. It’s not a separate payment model like CPA or revenue share; it’s an organizational layer that can sit on top of any of them. Understanding the mechanics is one thing — Scaling Into a Master IB covers what actually changes once you decide to go build one.
This isn’t a multi-level-marketing structure, despite the surface resemblance. Every payment — to the Sub-IB and to every tier above it — is tied to real client trading volume, calculated and paid directly by the broker itself. Nobody earns from recruiting alone, and a Sub-IB’s own clients and payouts remain theirs regardless of how the tiers above them are structured.
How the override cascade works
- A Master IB recruits Sub-IBs into their network, either directly or through further sub-recruitment, typically extending two to four tiers deep — though some brokers support up to five, and a handful place no hard cap on depth at all.
- Each Sub-IB refers their own clients and earns the standard base commission on those clients’ trading — a lot rebate, spread share, or revenue share, same as any individual IB.
- The broker also pays an override to every parent tier above in that Sub-IB’s chain, calculated on the same trading volume — a smaller per-lot or percentage-based amount than the base commission, and paid on top of it, not deducted from it.
- This repeats up the chain: a three-tier network might see the referring Sub-IB paid in full, the mid-tier IB paid a smaller override on that same volume, and the Master IB paid a smaller override still — all three payments happening simultaneously from the same underlying trade.
The critical point partners often get wrong: a Sub-IB’s own earnings aren’t reduced by their upline’s override. The broker pays the override as a separate line item out of its own margin, not by clawing back a percentage of what the Sub-IB earned.
Worked examples: two-tier and three-tier
Illustrative only — figures are industry-typical ranges from third-party sources, not a real broker’s published terms.
Two-tier example: a broker pays $10/lot in base commission. A Sub-IB’s referred clients trade 100 lots in a month — the Sub-IB keeps the full $1,000, unreduced. The Master IB who recruited that Sub-IB earns a separate override on the same 100 lots — say $1/lot, or roughly 10% of the base rate — for an extra $100, paid by the broker on top of the Sub-IB’s payout.
Three-tier example: a broker allocates a $5/lot total commission pool across three levels on a given trade: $3.00/lot to the directly-referring Sub-IB, $1.00/lot override to the mid-tier IB, and $1.00/lot override to the Master IB at the top. A separate industry example shows the same shape with different numbers: $7/lot to the referring Sub-IB, a $2/lot override to the mid-tier IB, and a $1/lot override to the Master IB — override amounts decline at each ascending tier, but the structure is the same regardless of the exact split a broker chooses.
Master IB vs. Sub-IB: role comparison
| Master IB | Sub-IB | |
|---|---|---|
| Position in network | Top of the hierarchy — recruits and manages Sub-IBs | Recruited into a Master IB’s network; may recruit further sub-partners of their own |
| Earns from | Their own direct clients, plus overrides on every Sub-IB’s volume beneath them | Their own direct clients, plus overrides on any partners they’ve recruited themselves |
| Typical audience | Larger networks, agencies, or established partners who recruit and support other partners | Individual partners, smaller content creators, or newer partners brought in by a Master IB |
| Responsibilities | Often provides onboarding support, marketing materials, or local-market knowledge to their Sub-IBs | Refers clients directly; may or may not build a downstream network of their own |
| Portal / dashboard access | Full network hierarchy reports — visibility into every Sub-IB’s performance beneath them | Own client and referral data only — no visibility into other partners’ networks |
What determines tier earnings
- Network depth — a Master IB with a larger, more active Sub-IB network earns more in overrides, independent of their own direct referrals
- Base commission structure — the underlying payout model (lot rebate, spread share, or revenue share) that overrides are calculated against
- Broker’s override policy — brokers set their own tier-depth limits and override percentages; not every broker offers more than one or two tiers
- Sub-IB activity and retention — an override is only as valuable as the trading volume underneath it, so recruiting inactive or low-volume Sub-IBs adds little
Who this suits best
Multi-tier structures reward network-building, not just individual referral. They tend to suit:
- Partners with an existing audience of other partners — agencies, communities, or influencers who can credibly recruit sub-partners rather than just end clients
- Partners willing to invest time supporting their Sub-IBs — providing onboarding, marketing material, or market knowledge, since a well-supported Sub-IB network generates more override income than an unsupported one
- Established partners looking to scale earnings beyond their own direct referral capacity, without doing the client-facing work themselves
It tends to suit poorly: a partner just starting out with no network of their own to recruit — that’s a standalone IB arrangement instead, without the added complexity of managing sub-partners.
Pros and cons
| Pros | Cons |
|---|---|
| Earnings scale with network size, not just personal referral volume | Requires real recruiting and support effort — it’s not passive income |
| Override income doesn’t reduce what Sub-IBs earn, so recruiting is a genuine win-win | Income depends on Sub-IBs staying active — a network that goes quiet stops paying overrides |
| Can compound significantly at scale for an established Master IB | More complex to track and reconcile than a single-tier arrangement |
| Sub-IBs benefit from a Master IB’s support, marketing material, and market knowledge | Not every broker offers multi-tier programs, or caps how deep they go |
Risks and operational pitfalls
Multi-tier networks introduce risks that don’t exist in a single-tier IB or affiliate relationship:
- Margin erosion on deep hierarchies — brokers typically cap the total commission cost per lot across all tiers combined, to prevent a network so deep it eats into the broker’s own margin
- Inactive-partner management — a network needs clear rules for what happens when a Sub-IB goes inactive, since dead weight in the hierarchy can complicate reporting without adding value
- Dispute resolution when a Sub-IB departs — clear policies are needed for reassigning that Sub-IB’s clients and future overrides when a partner leaves the network
- The same fraud risks as any base commission model still apply — wash trading or volume manipulation anywhere in the network still puts every tier’s commission at risk, not just the partner directly involved. Full detail: Partner Fraud & Prohibited Practices
FAQ
What’s the difference between a Master IB and a Sub-IB?
A Master IB sits at the top of a partner network and earns overrides on every Sub-IB’s volume beneath them, in addition to their own direct clients. A Sub-IB is recruited into that network, earns their own base commission in full, and may recruit further sub-partners of their own.
Does a Master IB’s override reduce what a Sub-IB earns?
No. The broker pays the override as a separate amount out of its own margin — it doesn’t reduce or get deducted from the Sub-IB’s own commission.
How many tiers deep do multi-tier IB structures usually go?
Most commonly two to four tiers. Brokers set their own limits, and very deep hierarchies are less common since they can erode the broker’s margin on each trade.
Is Master IB / Sub-IB a separate payment model from CPA or revenue share?
No. It’s an organizational structure that sits on top of an existing payment model — a Sub-IB can be paid via CPA, revenue share, lot rebate, or spread share, and the override cascade works the same way regardless of which base model is used.
What happens if a Sub-IB stops being active?
This depends on the broker’s policy. Some networks keep inactive Sub-IBs on record with no override generated from them; others have processes for reassigning an inactive Sub-IB’s existing clients. It’s worth confirming this upfront before building a network.
Can wash trading in a Sub-IB’s network affect the Master IB above them?
Yes. Since overrides are calculated on the same underlying trading volume, fraud or manipulation anywhere in the chain puts every tier’s commission at risk, not just the partner directly involved.