Interactive Brokers – What's the Reality?

[Oxx]

I've becoming increasingly frustrated with my current, Luxembourg-based broker and have been looking around. Interactive Brokers seems suspiciously cheap. I was wondering what people's actual experience of using them was like. Specifically

 

(1) Do they ask you for proof of where your wealth comes from? (My current broker will not accept any additional funding of my account. Apparently I'm expected to provide them with a lifetime's supply of pay slips going back 35 years.)

 

(2) After the account is up and running do they require you to provide ongoing proof of address annually? (Another gripe with my current broker.)

 

(3) My first impressions of Trader Workstation isn't great (quite a few error messages about being unable to connect to servers and missing account numbers). Are the workstation problems likely to be because I'm running a trial account? Or is the workstation software itself inherently flawed? (I'm running on Linux.)

 

(4) Is there an alternative way of entering orders and monitoring positions, perhaps web-based? The Workstation is far too complex for my simple needs.

 

(5) As a resident of Thailand my account would be US-based. Are there any American tax issues of which I should be aware? (I think I know about the death tax if you have more than US$60,000-equivalent in cash when you die.) I won't be buying any American stock.

 

(6) How difficult would it be for my executors to sell all the investments, close the account and receive the proceeds?

 

p.s. I'm not American.

 

 

Edited June 23, 2019 by Oxx

[Oxx]

Continuing my research, 47% of respondents on the "Trustpilot" site rate IB as "bad" (the lowest rating).

 

And to answer (4) there does appear to be a web trading interface, though it's apparently not available to trial users.

[Misty]

42 minutes ago, Oxx said:

Continuing my research, 47% of respondents on the "Trustpilot" site rate IB as "bad" (the lowest rating).

 

And to answer (4) there does appear to be a web trading interface, though it's apparently not available to trial users.

Hi Oxx, I have experience with IB - to answer your questions:

 

1) Up until now haven't seen proof being asked for, although they do ask where the funds come from with various options listed (salary, sale of property or asset, inheritance, divorce, etc) IB does require that funds are transferred into the account from a bank account in the account holder's name. From that it looks like they are holding the bank responsible for making sure the funds are legit

 

2) No, although from time to time they update their information and may ask for an update.  Haven't seen them ask for proof.

 

3) I don't use Trader Workstation so can't comment.  Their other trading functions (Quick trade and Webtrader) are enough for what I need.

 

4) IB's Quicktrade and Webtrader functions are web-based.

 

5) No, a Thai based account doesn't raise US tax issues, including the estate tax you mention.  US is just the legal jurisdiction of the custodian in this case.  US estate tax issues would be raised if you purchased US based assets such as stocks, etc. But that would be the same for these types of US assets purchased in any investment account, whether the custodian is based in Singapore, Hong Kong, Luxembourg, etc.

 

6) I couldn't comment, probably they would need to have a death certificate and possibly other legal items showing they are the executor.  Suggest you ask IB directly.

 

Finally, I'm not that familiar with Trustpilot nor the reasons for IB's low rating on Trustpilot. But I have read articles such as this one suggesting that these types of consumer rating sites can be manipulated: https://www.bbc.com/news/technology-43907695 If you're familiar with Barron's, they do an annual review of online brokers and IB has consistently scored highly: https://www.barrons.com/articles/who-are-2019s-best-online-brokers-51550882807

 

Hope this is of some help.

 

Cheers, Misty

[Oxx]

Thanks Misty.  That's really helpful and reassuring.

 

Bit surprised nobody else has commented.  I'd thought IB was quite widely used.