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Duration: 4:57

Contributor: Interactive Brokers

Level: Beginner

This lesson will examine the different Advisor account structures available at Interactive Brokers to help you make the right choice.

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Study Notes:

IBKR caters to established advisors with hundreds of clients to start-up advisors who have left bigger brokers to set up independent businesses;and others who invest actively and manage money for a select number of friends and family who want to grow into an Advisory business.

Advisor Account Structure

The Advisor Account Structure is suited for an individual or Registered Advisor whose master account is linked to multiple individual or organizational client accounts.

ibkr advisor account structure

Advisor account holder must be 21 or older to open a master account.

Once a master account is opened, the RIA can create accounts at lower tiers in order to add Advisors, Proprietary Trading Groups with Separate Trading Limits and Multiple Hedge Fund master accounts.  These accounts can then open client, sub-advisor and hedge fund accounts as required.

The advisor master account is used for collecting fees and trade allocations.

The Advisor may open a single account under the master for his or her own trading.

IBKR’s Advisor accounts let professional Registered Investment Advisors (RIAs) and Commodity Trading Advisors (CTAs) execute and allocate trades among multiple clients from a single order management interface.

Advisor Accounts can be white branded with the Advisor’s corporate identity.

Interactive Brokers is a global company and accepts accounts from citizens or residents of all countries except those on sanction lists of the US Office of Foreign Assets Control (OFAC) or similar lists.

And for those who want to invest actively and manage money for a select number of friends and family, there is the Friends and Family advisor account, which can grow into an Advisory business.

Friends and Family Structure

Friends and Family accounts let you manage 15 or fewer multiple accounts of varying types under a single login.

The master account is used for fee collection and trade allocations.

The advisor can open a single client account for his or her own trading.

Only Advisors who are exempt from registration are eligible to open a Friends & Family account.

Advisors residing in the U.S. may be required to register under either State or Federal law if they meet certain criteria (e.g., total assets under management, number of clients, whether they receive compensation, etc.).

Advisors whose Registered Independent Advisor registrations are pending or who aspire to becoming RIAs can open a Friends and Family Group account and then, when their registration is complete, upgrade their account to a Registered Investment Advisor account.  This can simply be done by entering information about their securities and/or commodities registration on the Advisor Qualifications page in the Advisor Portal.

Many different types of accounts may be opened, such as an IRA and joint account.

An UGMA/UTMA account is intended for a custodian of a minor who is a US resident and is available as a Cash account only. A UGMA/UTMA account is a single account with a default single user (the custodian), and up to five Powers of Attorney users can be added.

Please note that monthly activity and other minimum fees may apply for both the RIA and the friends and family account structures.

You can find this information and a whole lot more about IBKR’s advisor accounts by accessing the IBKR website’s home page and clicking the Start Here button.  Here you’ll find information for Family Office, Friends and Family and Registered Investment Advisors.

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

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