IB hierarchy software: buyer's guide for forex brokers
A practical buyer's guide for IB hierarchy software covering commission matrices, payout automation, common scams and the right questions to ask vendors.
The short answer
Introducing Broker (IB) software is the engine that tracks multi-level partner hierarchies, calculates commissions across different models, and automates payouts. The right system supports at least 5 levels of hierarchy, mixes spread-based and volume-based commission models, exposes a sub-IB portal for partners to manage their downline, and pays out on a schedule without manual intervention. BrokerTech ships a 6x6 matrix that is effectively industry-leading; most competitors cap at 4 or 5 levels.
This guide walks through what IB software actually does, the commission models that matter, the scams to watch for, and what to ask a vendor before signing.
What IB software actually does
A real IB module covers six functions:
- Hierarchy management. Who is under whom, with effective dates and move history.
- Commission calculation. Per trade, per lot, per deposit, per funded client, per referral.
- Payout automation. Monthly (or weekly) disbursement to IBs with tax documentation.
- Sub-IB portal. Self-service for IBs to see their downline, commissions, and client stats.
- Campaign tracking. Custom links, UTM handling, attribution rules.
- Clawback logic. Reverse commissions on chargebacks, bonus abuse, or self-dealing.
Miss any and you will be spreadsheeting something at month-end.
The 6x6 commission matrix explained
A 6x6 matrix means:
- 6 levels of IB hierarchy (IB, Sub-IB-1, Sub-IB-2, Sub-IB-3, Sub-IB-4, Sub-IB-5).
- 6 commission dimensions per level (spread share, volume rebate, CPA, deposit bonus, hybrid, performance).
Example: your master IB earns $8/lot on EURUSD. Their Sub-IB earns $5/lot. The Sub-Sub-IB earns $2/lot. Level 4-6 earn $1, $0.50, $0.25. The matrix tracks all of it, every trade, every client.
Most competitors cap at 3-5 levels. At scale, this matters. A 6-level matrix unlocks master-affiliate models where a marketing agency sits on top of regional IBs, and they on top of individual referrers.
Commission model choices
Spread-based
IB earns a share of the spread the broker charges. Simple. Scales with volume. Aligns IB and broker incentives.
Volume-based (per lot)
IB earns a fixed dollar amount per standard lot. Clean. Easy to explain to partners. Does not depend on spread, so works for both raw and markup accounts.
CPA (cost per acquisition)
IB earns a one-time payment per funded client. Fast for IBs. Risky for brokers because it rewards churn.
Hybrid
A CPA payment up front plus ongoing spread share. Most common for professional affiliates.
Performance
Bonuses tied to volume thresholds or account retention. Useful for top performers.
Flat vs tiered
- Flat: same rate regardless of volume. Simple.
- Tiered: rate increases at volume thresholds. Motivates scale.
- Hybrid: flat base plus tiered bonus. Most common.
Common IB scams to guard against
Self-dealing
IB signs up as their own client and trades to farm rebates. Catch this with device fingerprinting, IP matching, and bonus eligibility rules.
Wash trading
IB and client collude to generate volume, splitting rebates. Catch with PnL analysis: wash traders break even on net PnL but generate high volume.
Chargeback farming
IB drives deposits, collects CPA, and clients chargeback. Defend with CPA clawbacks on chargebacks within 90 days.
Bonus abuse
IB cycles clients through welcome bonuses. Defend with bonus terms that require minimum volume and tenure.
Identity recycling
Same person opens multiple accounts under different names. Defend with KYC deduplication (face match, document hash).
A proper IB module lets you configure these defences once, not fight them per incident.
Reporting IBs actually want
IBs will evaluate you by the quality of their portal.
- Real-time (or intra-day) commission accrual.
- Downline client list with anonymised PnL.
- Volume heatmaps by symbol and week.
- Payout history with tax documents.
- Campaign link tracking.
- Referral tools: QR codes, landing pages, promo material library.
If your portal is a monthly CSV emailed on the 5th, good IBs will leave you.
Payout automation
A serious IB module pays out without manual intervention:
- Configurable cadence (weekly, bi-weekly, monthly).
- Multiple payout methods (wire, crypto, internal credit).
- Minimum payout thresholds.
- Tax document generation (1099, W-8BEN where relevant).
- Exception queue for compliance review.
- Audit log of every payment.
Manual payouts at 300 IBs take 8-16 hours per month. Automation saves that and cuts error rates.
Questions to ask IB software vendors
- How many hierarchy levels do you support? 6 is ideal. Under 4 is a red flag.
- Can I mix commission models on the same IB? (e.g. CPA plus volume)
- Is there a sub-IB portal? Can sub-IBs manage their own downline?
- How do you handle clawbacks on chargebacks?
- Can I run multiple concurrent campaigns with different attribution?
- What payout methods are supported out of the box?
- How does the IB tree reshape when an IB leaves or is demoted?
- Can I A/B test commission structures on a subset of IBs?
- What fraud detection comes built-in?
- Does the API expose the full tree and commission history?
BrokerTech answers yes across the board. Not every vendor will.
Vendor comparison
| Vendor | Max levels | Sub-IB portal | Auto payout | Clawback | Hybrid commissions |
|---|---|---|---|---|---|
| BrokerTech | 6 | Yes | Yes | Yes | Yes |
| B2Core | 5 | Yes | Partial | Partial | Yes |
| Leverate | 5 | Yes | Yes | Yes | Limited |
| FXBO | 4 | Limited | No | No | Limited |
| CloudTrade | 3 | No | No | No | No |
When IB complexity justifies a dedicated upgrade
Rough rule of thumb:
- Under 50 IBs: almost any CRM works.
- 50-300 IBs: you need a real portal and auto-payout.
- 300-1,000 IBs: hierarchy depth and fraud defence matter.
- 1,000+ IBs: you need the full 6-level matrix, campaign tracking and API-level access.
BrokerTech supports all four bands; most competitors choke above 300.
Key takeaways
- IB software does six jobs; missing any one costs you at month-end.
- A 6x6 commission matrix unlocks master-affiliate models that 3-4 level systems cannot.
- Hybrid commission models (CPA plus spread share) are now standard for professional affiliates.
- Plan for self-dealing, wash trading, chargeback farming and bonus abuse; configure defences once.
- The sub-IB portal is a retention tool; if yours is weak, partners will leave.
- Auto-payout saves 8-16 hours per month at 300 IBs and reduces errors.
Next step
Bring us your current commission structure and IB tree. We will model it in BrokerTech's 6x6 matrix in one working session and show you where the automation saves time.