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Separately Managed Accounts at Interactive Brokers


Mjs3382
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I’ve been managing Separately Managed Accounts at Interactive Brokers for some friends and family.  Since it is less than five people, I’ve been exempt from state registration as a Registered Investment Advisor in the state I/we are located (also I’m not currently charging fees).

 

As I’m close to exceeding five “clients”, I’d like to formalize the structure and form probably an LLC that will act as the Registered Investment Advisor.  I’m just trying to get a sense from anyone whose managing money under this structure currently, what their start-up and ongoing expenses are/were?  Just general figures.  I’ll obviously hire a lawyer but would love to have some more concrete idea of expenses before starting down that route.

 

Any info on this would be extremely appreciated.  Thanks.

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2 hours ago, Mjs3382 said:

I’ve been managing Separately Managed Accounts at Interactive Brokers for some friends and family.  Since it is less than five people, I’ve been exempt from state registration as a Registered Investment Advisor in the state I/we are located (also I’m not currently charging fees).

 

As I’m close to exceeding five “clients”, I’d like to formalize the structure and form probably an LLC that will act as the Registered Investment Advisor.  I’m just trying to get a sense from anyone whose managing money under this structure currently, what their start-up and ongoing expenses are/were?  Just general figures.  I’ll obviously hire a lawyer but would love to have some more concrete idea of expenses before starting down that route.

 

Any info on this would be extremely appreciated.  Thanks.

 

As I understand, IBKR's friend and family advisor account requirement is up to 15 accounts. You are just 5. Still a lot of wiggle room.

But this requires that you don't charge management fees. If you do, then you do need to be an RIA for your state.

I don't think the expense is too bad. Setting up the LLCs could be the worse part. If you are managing external accounts who may sue you, then it is worth setting it up with a two tiered LLCs. have your parent LLC in Wyomin, and have your lower tier LLC soly owned by that Wyomin LLC. In this case, your client has to sue you and win in both states to actually win, and the Wyomin LLC provides privacy. It will never tell anyone who the owner is.

 

 

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