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How Interactive Brokers terminates

Updated: Jul 26, 2021

Today I learned how Interactive Brokers terminates RIA's. But first I must tell you that after 8 hours, and countless conversations with very nice people from the Interactive site, not one of the employees knew. I ended up finding it myself. Maybe I am just talking to the wrong people. I have attached the relevant contracts that provide the authority for the IB to terminate, but no where does it say how they do it.


They do it by issuing an email to the RIA and the account holders. The accounts are place in a Closing Only State and no reason is given to the account holder for that action. The account holder is told he must go with the RIA, or stay as a retail account but must "de-link". I pressed for examples of what would create such a step and got zilch....Nada.................


I located, on my own, the forms from the IB site that give the authority, or at least the claimed authority for IB to contact the RIA clients. I have attached the two relevant contracts I could find, and added my comments and an image to identify the sections. (I figured an image of a guy being held hostage was appropriate). There is the contract between the RIA and IB and the contract between the account holder and IB.















Interactive Brokers Client Agreement Editable Copy Highlighted
.pdf
Download PDF • 1.00MB

Interactive Brokers Advisor Client Agreement After Edit
.pdf
Download PDF • 153KB

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Comentários


Broker Dealers seem quite casual, if not indifferent, to informing RIA clients that they have terminated the contract with their advisor. Almost like telling a motorist he left his car lights on. Broker Dealers refer to these individuals as account holders, while RIA's refer to them as clients. If you ask a compliance person at a Broker Dealer how the recipients of the notice of termination are likely to "feel" after receiving notice, they will show you that they have not given the matter much thought, and really don't care. 

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