Interactive Brokers
Interactive Brokers Review
Interactive Brokers is headquartered in Greenwich, Connecticut and has approximately 960 employees in its offices in the USA, Switzerland, Canada, Hong Kong, UK, Australia, Hungary, Russia, Japan, India, China and Estonia. IB is regulated by the SEC, FINRA, NYSE, FCA and other regulatory agencies around the world.
Interactive Brokers is known for its international trade capabilities, low commissions and advanced trading platform. EME reviewed Interactive Broker in 2016 and it became our new best provider review at that point.
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Interactive Brokers Review
This is the most competitive fund purchase vehicle EME has reviewed. Interactive Brokers is an up-to-date 2016 offering with full transparency with regards to charges, funds / equities / ETF from territories such as the UK, the USA and some European Bourses as well as Hong Kong; ultimately, an Interactive Brokers trading account is an inexpensive pure platform solution. The loss of a half a star is purely because it does not offer an insurance tax wrapper, has poor customer service reputation and has steep learning curve.
For
- Full flexibility with full withdrawal or full access in the early years without penalty
- No commission, and no hidden charges
- Superior account security
- Full transparency of costs leads to lower charges
- Provides full access to lowest cost funds, passive trackers and equities throughout the worlds markets
Against
- Not available to everyone in every country
- Fully tax declarable unless held in a suitable wrapper
- Account history and statements displayed separately
- This is a fee driven product which must be paid at outset
- Not suitable for novices as the trading platform can be complex
| Interactive Brokers promotion: What does Interactive Brokers write about their own platform? Interactive Brokers was founded in 1993 by Thomas Peterffy, an early innovator in computer-assisted trading. He introduced electronic devices to options floor trading at the Chicago Board of Trade and went on to develop related trading technologies before entering the electronic brokerage business. In 1983, the company created the first handheld computers used for trading. As Peterffy explained in a 2016 interview, the battery-powered units had touch screens for the user to input a stock price and it would produce the recommended option price, and it also tracked positions and continually repriced options on stocks. |
| Eligibility: Anyone over the age of 18 that is resident in an acceptable country. US clients are welcome with Interactive Brokers, in fact it is the only investment platform among all of the companies reviewed that welcomes US clients. |
| Life Insurance: Interactive Brokers does not offer life assurance, it is a trading platform purely for investing your money with a wide range of investment options. |
| Minimums: Targeted minimum single premium is $10,000 with the aim of building the account to $100,000 as this negates the monthly charge as detailed below. Although Interactive Brokers gives you a grace period of three months before the monthly charge applies. |
| Charges: Establishment Charge Structure: Administration charge: Other Charges: An adviser charge to manage the portfolio, this typically can be between 1 to 1.5% per annum depending on the chosen advisers charging structure and service provided. The Interactive Broker trading account can be managed completely by the client that is comfortable selecting and trading stock. Full details can be found here. |
Are charges explicit: By explicit, it means that it is clear to see not only the charges for taking out the plan but also the cost of funds annually, any upfront fund costs. No penalties on access, etc. Yes, in the main the Interactive Broker trading account charges are clearly shown and any professional should be able to interpret them.DocumentsInteractive Brokers Adviser Brochure |
| Surrender of the Interactive Broker trading account: There are no surrender charges and no early redemption charges as there is no commission charged when the account is set up. This is the future of investing, portfolio can be built based on the clients specific appetite to risk included IRS compliant portfolios for US clients. |
Expat Money Expert Assessment of Interactive Brokers
Our current Best Buy
Interactive Brokers trading account is completely different to purchasing an offshore bond. It is an up-to-date offering which offers full transparency with regards to charges and funds / equities / ETF from territories such as the UK, the USA and parts of Europe; ultimately, an Interactive Brokers trading account is an inexpensive pure platform solution.
Interactive Brokers’ trading technology is possibly good enough for a professional day trader using their platforms. The company tries to guide you as much as possible to make the steep learning curve much easier. Interactive Brokers offers a web-based trading platform called WebTrader and a more advanced downloadable platform, Trader Workstation, that may take you a few days to learn. Both platforms are included for Interactive Brokers clients at no additional cost.
Interactive Brokers comes with a $10,000 minimum funding and is not suitable for casual investors, but provides support for international trading. It also offers active traders a very competitive commissions schedule for low-cost trading. Fees increase with trading but they still remain very competitive. It has superior account security as well and privacy standards are set high.
The main two downsides are that the online trading system is really designed for professionals and the account history and statements are displayed separately, and Interactive Brokers can be daunting to novices. We do not think it is suitable for novices. Also, it does not have a life tax wrapper available although it is possible to “buy” one separately and then have Interactive Broker as the trading account within it.
WARNING: Costs and information are correct as of July 2016. Please refer to a brochure from the company for current up to date information and any changes on costs or information. You should not buy based purely on information contained within this article and EME do not accept liability for purchases. If you have any doubts then please speak with your financial adviser or a representative of the company for further advice.
If the provider improves or amends its terms then EME would like to hear from it to amend the review page accordingly, and providers are encouraged to comment on errors or omissions to ensure that readers have the latest and correct information.
Comments 1
Its total scheme to rip innocent people off their hard-earned money as I have invested with them but nothing fruitful came out of it, instead, they kept demanding for more funds to be invested, after several attempts to make me deposit more had failed, they decided to lock me out of my accounts with no reasonable explanations, I had to take matters into my own hands as my financial institution couldn’t help me get my investments back. So I proceeded to contact a recovery firm to help me recover my funds, it took me less than a month to get it all back but am really glad I could get the help I needed.