Interactive Brokers review

Our verdict

Our verdict

On the whole, Interactive Brokers (also known as IBKR) has a lot to offer. It has everything you need for investing and trading - plenty of tools and resources plus a vast range of investments and markets.

However, the devil is in the detail, and Interactive Brokers has one of the most complex fee structures we've seen. The fees do actually work out quite cheap, but deciphering them is more complex than reading Morse code.

Interactive Brokers is definitely geared more towards traders than investors. Still, it has been expanding its offering in the UK by launching educational resources and introducing a stocks and shares ISA account. We think beginners may find IBKR slightly overwhelming, but experienced investors will rejoice at the sheer depth of assets and trading tools on offer.

Pros

• Low fees
• Demo account available
• Lots of trading tools and learning resources
• Huge range of access to investments and global markets

Cons

• Complex fee structure
• Platform is most suitable for experienced traders
• Strong emphasis on trading
• Not the easiest app and website to navigate

★★★★★

Finder score

Interactive Brokers, or “IBKR”, is a comprehensive trading platform that lets you trade on stocks in more than 200 countries. It claims to offer the lowest trading fees – albeit in a bit of a complicated way, which we’ll get to later. Interactive Brokers has four trading platforms to choose between, letting you decide how much detail you want to see your investments with. Find out if this sophisticated investment platform is suitable for you and what we thought.

What is Interactive Brokers?

Interactive Brokers is an investment broker designed for experienced investors. It’s got all the tools you need to understand your investments, including:

• Advanced charting. You can customise your charts, add technical indicators and display volume charts.
• News. You can stay on top of news that’s relevant to specific products.
• Key metrics at a glance. You can see essential information like your Net Liquidation Value and buying power.
• Quick trade. You can quickly place orders, manage ones you already have open and view recent trades.
• Notifications. You can turn on notifications and FYIs.
• Order types and algos. These help you limit your risk.
• Risk management. Interactive Brokers has a risk navigator and other technology to help you manage your risk.
• Paper trading. Interactive Brokers’ demo account. You can try out strategies without using real money.
• Ethical investing. Interactive Brokers has great tools to help you choose investments that match your values.

Who is Interactive Brokers good for?

Interactive Brokers is good for experienced investors looking for a sophisticated platform. It’s great for active traders looking for something advanced.

Interactive Brokers isn’t really for beginners. It’s quite intimidating, with lots of different tools and a lot of jargon, which is exciting for experienced investors but is enough to put a beginner off.

If you’re just starting out and want something a little less intimidating, check out Hargreaves Lansdown or IG.

What can I invest in with Interactive Brokers?

International Brokers has one of the largest ranges of financial instruments available from the providers we’ve reviewed.

Here are some of the financial instruments you can trade with Interactive Brokers:

• UK stocks
• International stocks
• Options
• Futures
• Forex
• Bonds
• Funds

Stock exchanges covered

If you’re looking for international stocks, Interactive Brokers may be a contender for the amount of stock exchanges it covers. You can browse the exchanges covered by their region below:

• Americas
• Europe
• Asia Pacific

Ethical investing with International Brokers

International Brokers has a pretty impressive ethical investing feature that lets you see how your investments line up with your values. This lets you endorse the companies that you believe are contributing to the world.

You can tell International Brokers what matters to you, such as racial equality or clean air, and what you’re against, such as animal testing or greenhouse gases. Interactive Brokers will then tell you if your current and future investments reflect these values – it even gives you an overall score.

It also shows you the company environmental, social and governance scores (ESG scores). You can compare the scores against other companies and see which ones rank higher than the company you’re looking at. It’s got the ESG scores in more detail too, so you can see the individual factors that make up the environmental, social and governance of each company.

From our knowledge, this is one of the first brokers that gives you this much detailed information about company ethics in a trading platform.

What products does Interactive Brokers have?

Interactive Brokers currently only has one account: a general investment account. This means that you can’t make use of your annual ISA allowance and can’t save in a dedicated pension for your retirement.

Is Interactive Brokers safe?

Interactive Brokers is regulated by the Financial Conduct Authority (FCA). Client money is segregated from Interactive Brokers’ own money and your deposits are protected by the Financial Services Compensation Scheme (FSCS), which means that £85,000 of your deposits are covered if Interactive Brokers were to go bust.

Interactive Brokers fees

Interactive Brokers buries its trading fees in a complicated jungle of tables, so you could be forgiven for thinking it’s trying to hide something. But the crazy thing is, it’s prices are very competitive… if you can actually decypher them!

It’s designed to be one of the cheapest platforms on the market. The popular trading platform Degiro used to operate in a similar way before opting for a more simple approach. Fees vary according to the location of the exchange (not according to your location, as we established on a 30-minute live chat with IBKR!). IBKR makes a lot of noise about its Smart Routing service, which routes your trade to the exchange offering the best price. You can pay a little extra if you want to stipulate which exchange is used.

It’s also got different fees for different sized orders, which is its tiered structure. But unless you’re Elon Musk, trading £40m+ each month, you can just focus on the fixed pricing.

Fixed pricing

With fixed pricing, the amount you pay for each share is fixed, no matter how many you get. That said, a minimum per trade will apply.

Tiered pricing

With this type of pricing, the amount you pay per trade can be reduced based on the number of shares you buy (kind of like bulk buying toilet paper – the more you buy, the cheaper you get them per roll… except with IBKR you’d have to buy warehouses and warehouses of the stuff to access cheaper pricing). The tiers change depending on the currency and stock exchange, so it’s a good idea to check out its pricing page for what you want to trade. Unfortunately, right now, you’ll need to be trading millions each month to access the tiered pricing, so, er, maybe only a benefit to the super-high rollers!

Summary of Interactive Brokers fees

Of course, a complicated fee structure can be hard to summarise, so here’s some of the main instruments and their average fees. If you want more detail, take a look at the Interactive Brokers website.

Other fees

• Exchange fee. This is a 2% fee for exchanging your money from your currency to the one that you’re buying the shares in.
• Regulatory clearing fee. This is a fee from a clearing house for completing a transaction.

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