questions about linked account, Friends and Family account, Family Office account of IB

X

xiaosai

1.
how does IB calculate tiered commission for linked account?
for example, IB has tiered commission policy for US Stocks, if volume > 300000, then every share commission will decrease to 0.002.
if I link 3 individual accounts for each other or to a "Family Office Account", now each individual account has traded more than 100000, how will IB calculate volume to adjust the tiered commission? according to separate account or sum

2.
what kind of account can link to what kind of account?
for example, can I link a "Friends and Family" account as the client of "Family Office" account?

could someone give an IB official document for this?


3.
I linked a individual account to a "Friends and Family Group" advisor, I follow "account management-settings-account settings-Create, Move, Link or Partition an Account"
then when I choose second option "Create a New Linked Account That Will be Managed by an Advisor/Broker", it has an help explanation:
"
I will have two linked accounts that I can access using a single username and password. Trading permissions for my existing account will also apply to the new Advisor- or Broker-managed account, but any permission to which the Advisor or Broker is not entitled will be removed. I understand that the Advisor will not be able to enable trading for me in the accounts he or she manages, and that I will still be able to trade in my existing standalone account. The selected Advisor or Broker must approve this link request before the new account is open and linked. Once my account has been linked, fees may be debited from my account as specified by the Advisor or Broker.
"

it says I will still be able to trade in my existing standalone account.

but according to official desciption for Friends and Family Group Account
https://www.interactivebrokers.com/en/index.php?f=accountConfiguration&p=accountstructures
"The advisor has access to trading and most Account Management functions. Clients do not have access to trading but have access to all Account Management functions."

I am confused, can I still be able to trade in my individual account or not ?


4.
I am not very clear the difference between "Friends and Family Group Account" and "Family Office Account".

let's assume we have 3 individual accounts as clients, so according to my understanding:

for Friends and Family Group Account
-----------------
trading:
https://www.interactivebrokers.com/en/index.php?f=accountConfiguration&p=accountstructures
only advisor can trade, clients can not.

deposit:
https://www.interactivebrokers.com/en/index.php?f=funding&p=cash
client need to deposit own account, advisor can only complete a deposit notification for the client.

withdraw:
https://www.interactivebrokers.com/en/index.php?f=funding&p=cash1
client can withdraw to own bank after advisor consent, advisor may also use client bank information to make a withdrawal request on behalf of the client account.

internal transfer:
https://www.interactivebrokers.com/en/index.php?f=funding&p=cash2
only advisor can transfer to client, but client can not transfer to advisor.

data subscriptions:
only charged once.

margin calculation:
separately for each clients.

required minimums:
there is no activity fee for advisor, but we have 3 accounts, so the total consolidated commission should > 30$.


for Family Office Account
-----------------
trading:
https://www.interactivebrokers.com/en/index.php?f=accountConfiguration&p=accountstructures
both manager and clients can trade.

deposit:
is it same as Friends and Family Group Account???

withdraw:
is it same as Friends and Family Group Account???

internal transfer:
is it same as Friends and Family Group Account???

data subscriptions:
is it same as Friends and Family Group Account???

margin calculation:
is it same as Friends and Family Group Account???

required minimums:
is it same as Friends and Family Group Account???
 
I'm in the process of setting up a friends and family account. It's confusing and complicated, but I think it will help me save on commissions by splitting one trade across multiple accounts and only paying some parts of the commission fee structure once instead of multiple times. To partially answer your question number 3, for the friends and family account, the master account does not hold positions other than cash to cover the data subscriptions and cash received as fees from clients if applicable. It's only used as an interface to allocate trades across sub-accounts. After you setup the master account, there will be three options to link your primary account under the new master account:

Divide my account into two partitions, one of which will be managed by the Advisor/Broker identified below.

Move my entire account to an account managed by the Advisor/Broker identified below.

Create a new linked account that will be managed by the Advisor/Broker identified below.

For me, I want to control all accounts from the master account so I will select the second option. There's two options for the move. If I move the account to an advisor, I will lose the ability to trade and log into the trader workstation with the account being linked. Data services will be automatically cancelled. If I move the account to a broker, then I'll still be able to log into the trader workstation and my data feeds won't be cancelled. I was told that once the sub-account is linked to the master, there is an option under the master account that will allow the sub-account to still trade directly. However, if you do that, you'll need an extra data subscription for the sub-account. So I think it makes sense to manage everything from the master account. The moves happen every Friday after the market closes and I was assured that there will never be a time where I won't be able to log into one of the two accounts to place trades (if I select the advisor option) so I won't get locked out. I setup this account so that I could manage my wife's IRA. That's the only reason why I'm going through all this trouble. But since I also have an individual brokerage account as well as an IRA, it may help me save on commissions when I want to mirror trades across multiple accounts. I'll know more in a couple weeks once I have it fully setup. I missed last week's merge deadline. IB makes a lot of youtube videos. I wish they would make one explaining the difference between these two account types and what trading with the master account looks like.
 
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