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Has anyone else had it with IB?


matjone
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I am converting a little money to a roth IRA this year at IB and it is proving to be a giant PITA.  First of all they had a rule against partial conversions, so I had  to create a new linked account and then convert the entire thing.

 

So creating the linked account took a little while,  I first had to fill out an application, then wait for approval.  Then wait for it to be opened.  Keep in mind a lot of these steps involve waiting a day for it to go through.  Last step was to fund it.  This is where it got really complicated, because the permissions for some of my accounts did not match up.  So I open a chat today to see if there is some way I can expedite this, and the guy hits me with the following steps that I still have to do:

 

IB rep: first step. cancel your existing trading permission upgrade for new traditional account

IB rep: 2nd step: apply IRA margin for both traditional IRA accounts

IB rep: 3rd step: once IRA margin approval has been granted for your traditional IRA accounts, apply for trading capabilities

IB rep: step:  apply for SSF (single stock future) trading permission on linked traditional acct

IB rep:  4th step cont’d, need to remove OPT, and apply for futures, futures option, and single stock futures on original traditional acct

IB rep: 5th step: once trading capabilities have been approved, request internal fund transfer

 

 

A lot of these steps require waiting periods too.  This convoluted process, which I began with what I figured would be ample time considering I already had traditional and roth IRAs held at IB, may not get done in time.  I think it would have actually been faster to transfer the money to another brokerage.

 

Maybe I am off base and it is always this complicated, but it seems ridiculous to me.  End of rant.

 

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Haha, my hate on IB is on IB thread. I think someone else had bad experience with opening IRA with them, should be on IB thread too.

 

Yeah, IB should die, kkthxok.  8)

 

But all SMA managers use their platform  :'(  :'(  :'(  :'(  :'(

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They are the best I've seen for managing SMAs, but that does not mean there are a ton of flaws. The account opening and permissions process is chief among them.

 

There are also a lot of rules that help them but are not customer friendly, like the rule against partial IRA conversions. They also just banned MLPs from IRAs (FELP anyone?), presumably because they just brought IRA custodianship in-house and they can't be bothered to file tax returns for IRAs.

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Yea some things with IB can be annoying. Account permissions among them. I hate the 2 factor login. I understand security and all but I have a stack of those cards on my desk and it's a pain in the ass. I will admit that the tax free accounts are more annoying and an inferior offering compared to margin accounts. I use another broker for a lot of tax free accounts.

 

All that being said I absolutely love them! They have fantastic execution, great margin rat, an excellent product offering and FX, and global access (even though I'd like more EMs). You get all of this at a fantastic price! No-one really comes close. I hope they only improve from here. :)

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Was going to start a thread asking this question, but decided against it. Now just saw this so I'll raise the topic. Is their entire super low margin rate thing a bait and switch game? I figured I'd give them a shot and tried ACATing over a small account. The account was about 70% equity so by no means a crazily margined account. I get notified that IBKR has rejected my transfer, and that I need to send additional money in order for them to accept the account. I then follow up, and just about every stock I own in this account requires 100% margin, so in other words, their really cheap margin rates are useless to me because they have obscenely high margin requirements for individuals stocks. Is this something others have seen too? I'll admit I have some weirdo stuff, but it surprised me they require 100% for stocks that are frankly pretty boring and conservative.

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They are cheap but it seems you get what you pay for.  This conversion process is ridiculously over-complicated and will end up costing me thousands in extra taxes if it doesn't get done in time.  Doing this conversion should be a simple process of clicking a few buttons and an e-signature, or maybe mailing in a form.  That's how it was when I did it before at Vanguard.  This is a multi-step process and each step involves days of waiting between steps.  BTW, after my initial post I checked some of the changes the guy recommended.  For one of them there is no box available to check to make the recommended change.  So now I fear that even after jumping through all of these hoops there is still going to be a snag that stops this from getting done.

 

So I am currently in the market for a new broker.  I'm looking for one with access to foreign markets and pink sheet stocks.  The second criteria is getting tougher to meet these days as a lot of brokers have apparently decided they don't want to be involved in that market.  If anyone has any recommendations I'd love to hear them.

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They are cheap but it seems you get what you pay for.  This conversion process is ridiculously over-complicated and will end up costing me thousands in extra taxes if it doesn't get done in time.  Doing this conversion should be a simple process of clicking a few buttons and an e-signature, or maybe mailing in a form.  That's how it was when I did it before at Vanguard.  This is a multi-step process and each step involves days of waiting between steps.  BTW, after my initial post I checked some of the changes the guy recommended.  For one of them there is no box available to check to make the recommended change.  So now I fear that even after jumping through all of these hoops there is still going to be a snag that stops this from getting done.

 

So I am currently in the market for a new broker.  I'm looking for one with access to foreign markets and pink sheet stocks.  The second criteria is getting tougher to meet these days as a lot of brokers have apparently decided they don't want to be involved in that market.  If anyone has any recommendations I'd love to hear them.

 

If you are US-based, look into Fidelity. They have about the same foreign markets as IB and I've never had any issue with pink sheets or otc stocks.

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Was going to start a thread asking this question, but decided against it. Now just saw this so I'll raise the topic. Is their entire super low margin rate thing a bait and switch game? I figured I'd give them a shot and tried ACATing over a small account. The account was about 70% equity so by no means a crazily margined account. I get notified that IBKR has rejected my transfer, and that I need to send additional money in order for them to accept the account. I then follow up, and just about every stock I own in this account requires 100% margin, so in other words, their really cheap margin rates are useless to me because they have obscenely high margin requirements for individuals stocks. Is this something others have seen too? I'll admit I have some weirdo stuff, but it surprised me they require 100% for stocks that are frankly pretty boring and conservative.

For most micro and small cap stocks you don't get margin space.

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My main problems with IB:

 

1. You can't even purchase a stock with an outstanding ask for the ask price if there is only one ask outstanding for a certain stock cause IB won't even send the order to the exchange (this sucks so much).

 

2. You can't buy grey market shares

 

3. They often withhold too much tax on dividends at the source for non-US stocks even though there are tax treaties in place (and if you ask them to enforce these they refer you to the company who in turn refers you back to your bank/broker).

 

4. The low margin ability of many stocks is a bit annoying. Also weird that OTC equivalents of stocks are non-marginable. For example I probably should not have bought ATUSF but bough ALS.TO directly instead (30% margin req for Toronto versus 100% for the OTC).

 

Despite all this I really love them as a broker. Does any other broker even come close?

 

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Hopefully a competitor emerges.  As pissed as I am at them right now there is a reason I am with them, their combination of costs and access isn't matched anywhere else that I know of.  However I am at the point now where I would be willing to pay up for a broker with access to foreign stocks and pink sheets who doesn't jerk me around with ridiculous rules.

 

So again, if anyone has any recommendations I'd love to hear them.  I already have a fidelity account and I would probably move over there at this point but they have recently restricted access to a lot of pink sheet stuff.

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If you are US-based, look into Fidelity. They have about the same foreign markets as IB and I've never had any issue with pink sheets or otc stocks.

 

All my accounts except the one that I SMA'd to a manager are on Fidelity. SMA'd account is on IB.

 

I love Fidelity.

 

However, there are drawbacks:

1. They don't allow you to buy "No Info" OTC stocks.

2. They may not allow you to buy "Grey Info" OTC stocks. This varies I think. You may have to go through broker.

3. You may have issues buying penny stocks, may have to go through broker.

4. Foreign markets accessible are not the same ones as IB. There's significant overlap, but YMMV.

5. Foreign commissions are high.

6. XXXXF shares sometimes have added $50 fee for trade. YMMV.

7. You cannot buy foreign stocks on foreign exchanges in IRA/401(k). Some people here say that they can, but I never got Fido to allow me this.

8. People say that bond purchases are better on IB, since they sell you bonds cheaply from some kind of market (???) while Fido mostly sells only from their inventory. But then bond market is a separate f&ckup discussion.

 

I'm sure I'm forgetting something more about Fido. Will post if I remember.

 

I still prefer them to IB mostly because IB does not directly import to TurboTax Online which is a f&cking pain when your SMA manager trades like heck. Entering 200 trades manually at tax time - I'll kill myself in April.  :'(

IB report interface also sucks to high hell. IB to Quicken import is a bit painful too, but that's a lot because of the trades in foreign currencies.

 

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I still prefer them to IB mostly because IB does not directly import to TurboTax Online which is a f&cking pain when your SMA manager trades like heck. Entering 200 trades manually at tax time - I'll kill myself in April.  :'(

IB report interface also sucks to high hell. IB to Quicken import is a bit painful too, but that's a lot because of the trades in foreign currencies.

IB does statement is csv

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I still prefer them to IB mostly because IB does not directly import to TurboTax Online which is a f&cking pain when your SMA manager trades like heck. Entering 200 trades manually at tax time - I'll kill myself in April.  :'(

IB report interface also sucks to high hell. IB to Quicken import is a bit painful too, but that's a lot because of the trades in foreign currencies.

IB does statement is csv

 

Yeah, I think there are ways to import into TurboTax standalone, but not into TT Online. If someone knows a way, please let me know.

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The saga continues. I add funds to get my account transferred in, and upon the account settling I find out that if my account falls less than 2% they will just randomly start selling(yes this is what the rep told me in regards to how they decide what to do when below the margin maintenance, Its completely random!). My account currently sits at 79% equity. It was also odd being told that despite oddly high margin maintenance requirements, IB "does not have margin calls. Your account is vulnerable to being liquidated the second it goes below maintenance". Are these guys for real?

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You can set which positions to liquidate first.

 

Automating margin liquidation and conservative margin requirements are two of the reasons they are able to offer lower costs than other brokers.

 

Any help on where to set the liquidation preference. Their customer service is probably the worst I've ever encountered, and they are still telling me it is impossible because the computer selects this...

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Well look... basically IB isn't for everyone. If you're only investing domestically and in low volume you'll get a better deal somewhere else. If you do higher volume or global investing and you're not looking to pay a fortune to Morgan Stanley then IB is really the only game in town.

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Update: my conversion finally went through, but they definitely made me sweat it.  I think I had around 15 chat sessions probably totaling 12 hours or more over the past 10 days if you add up all my sessions.  Maybe they just got tired of dealing with me and pushed it through.  Lesson re-learned, don't ever count on anything going smoothly, especially with these guys.

 

Still listening if anyone has a broker recommendation for trading pink sheets stocks.

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Update: my conversion finally went through, but they definitely made me sweat it.  I think I had around 15 chat sessions probably totaling 12 hours or more over the past 10 days if you add up all my sessions.  Maybe they just got tired of dealing with me and pushed it through.  Lesson re-learned, don't ever count on anything going smoothly, especially with these guys.

 

Still listening if anyone has a broker recommendation for trading pink sheets stocks.

 

Tell me about it. The online customer service is outrageously slow, and 30% of the time it is "undergoing maintenance and will be back up any minute" only to be down for hours.

 

Don't know about broker, but Cor Clearing is notorious for letting you do whatever you want with pink sheeters and low priced securities.

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Gotta post on this due to all the negativity.  I certainly have had some issues over time with IB but they are by far my favorite broker.  All of my personally managed large accounts are there. Their main drawback is that they have been working in certain spaces and are not focusing on a lot of these deep interface issues.  Also they do not handle niche account types because their philosophy is so heavily tilted towards automation.

 

Over time they will support more and more, and we've already seen this.  The most recent example is them taking over IRA administration from their previous third-party advisor and hopefully allow better integrations over time.  I love the smartphone two-factor authentication--they've finally gotten that working smoothly. 

 

I've not had any trouble with configuring the reports interface to get done what I need to.

 

I've actually had good experiences with customer support in the past, but this definitely seems like another area for improvement.

 

I have had the annoyance with the IRA conversion as I do a yearly backdoor Roth IRA, which is much more painful than via other brokers.  But while it's annoying it is straightforward.  (If they would just let me keep open the traditional IRA as an empty stub account with no fees it'd be just fine).

 

I think a lot of it comes down to your particular needs and how much they've focused on those particular needs so far.  I wouldn't open any small accounts there (<100k) for example, unless you're going to do a lot of trading.

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Sounds like you had a PITA IRA issue.  IB isn't perfect but I really like them. 

 

Super low fees, transparent fees and for me generally good execution.  Customer service has generally been fine.

The fee savings can be a lot both on commissions and hidden fees. 

 

As a general rule - if you are on the phone with a customer service idiot call back and get someone good.  This applies for any organization.

 

I like them having tough margin requirements because that make for a more conservative financial institution.  IB could be more conservative in margin IMO.

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You can set which positions to liquidate first.

 

Automating margin liquidation and conservative margin requirements are two of the reasons they are able to offer lower costs than other brokers.

 

Any help on where to set the liquidation preference. Their customer service is probably the worst I've ever encountered, and they are still telling me it is impossible because the computer selects this...

 

Here is how to do it in TWS - not sure if it can be set in WebTrader. https://www.interactivebrokers.com/en/software/tws/usersguidebook/realtimeactivitymonitoring/portfolio.htm

 

I hope you're also planning to reduce your leverage to give you more breathing room.

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You can set which positions to liquidate first.

 

Automating margin liquidation and conservative margin requirements are two of the reasons they are able to offer lower costs than other brokers.

 

Any help on where to set the liquidation preference. Their customer service is probably the worst I've ever encountered, and they are still telling me it is impossible because the computer selects this...

 

Here is how to do it in TWS - not sure if it can be set in WebTrader. https://www.interactivebrokers.com/en/software/tws/usersguidebook/realtimeactivitymonitoring/portfolio.htm

 

I hope you're also planning to reduce your leverage to give you more breathing room.

 

Thanks.

 

Its a small account and was more exploratory in regards to getting familiarized with IB so I'm just going to add funds and leave it for a while. They've also told me I am not able to buy anything unless all the securities are 100% paid for(even though I have an approved margin account). So much for a useful margin account...

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