Master IB and Sub-IB Tiers: How Multi-Level Commission Structures Work

You have built a solid book of referred traders, and now a broker or another IB has floated an idea: bring other partners under you, and earn a cut of what they generate. That is a Master IB structure, and it changes the shape of your business from "I refer clients" to "I recruit and manage partners." The mechanics are straightforward once you see them laid out, but the fine print — override rates, tier depth, who pays for what, and where the money actually comes from — determines whether the arrangement is worth building or a trap that quietly caps your own upside.

This article breaks down how multi-level IB commission structures work, what a fair override rate looks like at each tier, and the questions to ask before you agree to sit at the top (or the bottom) of one.

What a Master IB structure actually is

A Master Introducing Broker (Master IB) is a partner who recruits and manages other IBs — called Sub-IBs — under their own account with a broker. Instead of only earning commission on clients you personally refer, you also earn an override on the trading volume your Sub-IBs' clients generate.

The structure is hierarchical: the broker sits at the top of the money, the Master IB sits above a tree of Sub-IBs, and each Sub-IB may have their own directly referred clients (and, in deeper trees, their own Sub-IBs). This is sometimes called a Multi-Tier Affiliate Program when the broker frames it from the affiliate-marketing side rather than the traditional IB side — the underlying mechanics are the same.

How the override actually pays out

The core mechanic is simple, but it trips people up because it sounds like the Sub-IB is losing money to the Master IB above them. They are not — the broker pays the override as a separate, additional cost of running the network, not as a deduction from the Sub-IB's own commission.

A typical two-tier example, using a Lot Rebate model:

• The Sub-IB refers a trader and earns $5 per lot traded, paid directly by the broker.
• The Master IB who recruited that Sub-IB earns a $2 per lot override on the same volume, paid separately by the broker.
• The broker's total cost per lot is $7 — the Sub-IB's income is untouched.

This is the standard shape for Sub-IB Commission arrangements: the Sub-IB's own rate is negotiated independently of the override, and the two numbers sit on top of each other rather than splitting a fixed pool. Some brokers instead run a shared-pool model, where a single blended rate is split between tiers by a fixed percentage — this is less common and worth confirming explicitly, because it changes the math for both parties.

Tier depth: how far down does it go

Most broker programs support two to three tiers before they stop offering overrides, though larger networks at established brokers can extend to four or five. Depth is a broker policy decision, not something an IB can unilaterally add.

The override rate typically shrinks at each level down — the person closer to the actual client relationship keeps the largest share, and the override compresses the further removed a tier is from the trading activity it's rewarding.

Why do overrides shrink instead of staying flat?

Two reasons brokers give, and both are legitimate. First, the broker's total payout per lot has a ceiling — if every tier took the same cut, a five-tier network would make the deal unprofitable for the broker, and the program would get shut down or the base rates cut for everyone. Second, the further a tier is from the actual client relationship, the less that tier is contributing to retention, support, and trust — the things that keep a trader active and profitable for the broker. Overrides compensate for network-building, not for day-to-day client service, so they're priced lower.

Building vs. joining a Master IB network

You'll encounter this structure from one of two directions, and the evaluation criteria differ.

If you're deciding whether to become a Master IB (recruit Sub-IBs under yourself):

1. Confirm the broker's tier policy in writing — override rate per tier, maximum depth, and whether it applies to both Revenue Share and CPA deals or only one.
2. Ask whether overrides apply retroactively to Sub-IBs you already had informal referral relationships with, or only to new recruits going forward.
3. Understand your support obligation. Brokers often expect a Master IB to provide basic onboarding, marketing material, and first-line support to their Sub-IBs — factor that time cost into whether the override is worth it.
4. Check the Clawback terms. If a Sub-IB's client turns out to be fraudulent or churns after a chargeback, does the clawback apply only to the Sub-IB's rate, or does it also claw back your override?
5. Get the tier structure and rate schedule in a signed agreement, not a verbal promise from an account manager — override terms are exactly the kind of detail that gets "re-clarified" after volume ramps up.

If you're deciding whether to join as a Sub-IB under someone else's Master IB:

• Verify your own commission rate is negotiated with the broker (or clearly documented by the Master IB) independent of whatever the Master IB earns above you — you should never be asked to split your own client's commission with the recruiter.
• Ask what the Master IB actually provides in exchange for recruiting you: better rates than you'd get going direct, faster payouts, dedicated support, marketing assets, or nothing beyond the introduction. If it's nothing, going direct to the broker is usually better.
• Confirm you can leave the structure and keep your own directly referred clients if the relationship with the Master IB sours.

Comparing the two roles at a glance

Mistakes to avoid

• Agreeing to an override rate without knowing the broker's Sub-IB rate. You can't judge whether $2/lot override is fair without knowing the Sub-IB is earning $5 or $8 on the same volume.
• Assuming tiering is automatic. Some brokers require a separate application or minimum volume threshold before they'll activate Master IB status on your account.
• Ignoring how a Baseline CPA or Net Deposits floor interacts with overrides. If the Sub-IB's clients don't clear a qualification threshold, neither the Sub-IB nor the Master IB gets paid on that volume — read the qualification rules for the override tier, not just the base tier.
• Recruiting Sub-IBs faster than you can support them. An unsupported Sub-IB network churns, and churn on volume you were counting on for override income hits your numbers directly.
• Building an entire business around one broker's tier program. If the broker changes its override policy — brokers do this, usually with 30-60 days' notice — a network built on a single broker's tiering has no fallback.

For the broader picture of how these structures fit alongside other commission models, see CPA vs RevShare vs Hybrid: The Complete IB Commission Model Guide. If you're weighing tiering against a simpler two-party deal, Hybrid Deals (CPA + RevShare) and RevShare Explained cover the base-rate mechanics an override sits on top of. And because override payouts depend entirely on the qualification clause upstream, What Counts as a Qualified Trader? is worth reading before you commit to a tier structure — a weak qualification clause quietly shrinks both the Sub-IB's and the Master IB's income.

If you're building a network across more than one broker, Master IB Networks: Recruiting and Managing Sub-IBs goes deeper into the operational side — recruiting, onboarding, and retaining Sub-IBs once the commercial terms are settled.

Where Master IB structures show up outside forex

Tiering isn't a forex-only concept. Prop-firm affiliate programs and some crypto exchange programs run comparable structures under different names — a "network partner" tier in a prop-firm program functions the same way a Master IB tier does at a forex broker: a base rate for direct referrals, plus an override for volume generated by recruited sub-affiliates. The mechanics in this article — override paid separately, tier depth capped by broker policy, qualification rules applying at every level — transfer across markets even when the vocabulary changes.

Vetting a broker's tier program before you commit

A few external references are worth checking as you evaluate any broker's partner program:

• The FCA's rules on financial promotions outline what regulated brokers can and cannot claim in partner marketing material — useful if a Master IB's recruiting pitch sounds too good.
• ASIC's guidance for financial services businesses covers disclosure obligations that can apply when recruiting Sub-IBs in Australia-regulated markets.
• Track360's explainer on multi-tier IB structures is a useful technical reference for how tracking platforms model override calculations across tiers, if you want to understand the plumbing behind the payout.

Once you understand how the model works, cross-check it against clear definitions before you negotiate — Revenika's Partner Glossary covers the surrounding terms (rebate types, clawback, revenue share) in plain language.

Frequently Asked Questions

Does becoming a Master IB reduce my Sub-IBs' commission?

No, not in a properly structured program. The broker pays the override as an additional cost on top of the Sub-IB's own rate, not as a deduction from it. If a broker's terms say otherwise, treat that as a red flag and get the mechanics confirmed in writing before recruiting anyone.

How many tiers can an IB network realistically have?

Most brokers cap overrides at two to three tiers. A small number of large, established brokers support four or five, but depth beyond three tiers is uncommon and the override at the bottom tiers tends to be small enough that it's not a meaningful part of anyone's income.

Can I be a Sub-IB under one broker and a Master IB under another?

Yes. Tier status is set per broker relationship, not globally. Many experienced IBs are a Sub-IB in one network where they get better rates through an established Master IB, while running their own Master IB structure with a different broker.

What happens to my override if a Sub-IB leaves the network?

Once a Sub-IB leaves, the override on their historical or ongoing volume typically stops immediately, unless the broker's terms specify a wind-down period. Confirm this in writing — it affects how much future income you should count on from any single Sub-IB relationship.

Is a multi-tier structure the same as a pyramid scheme?

No, as long as the income comes from real trading volume generated by real clients, not from recruitment fees paid by new partners joining the network. A legitimate Master IB override is tied entirely to client trading activity; if a program pays you for simply signing up other IBs regardless of whether their clients ever trade, that is a structural red flag worth walking away from.

Conclusion

A Master IB structure turns your IB business from a single revenue stream into a network you can scale — but only if the override is paid on top of, not carved out of, your Sub-IBs' rates, and only if you understand the qualification and clawback rules at every tier before you recruit anyone. Get the broker's tier schedule in writing, confirm where the override actually comes from, and treat tier depth and support obligations as real costs of the business, not fine print to skim past.