Home Interactive Brokers Is Interactive Brokers a Legitimate Broker?

Is Interactive Brokers a Legitimate Broker?

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Interactive Brokers is a leading provider of professional trading services, and it has licenses from the IIROC, FINMA, FSA, FCA, SFC, MAS, and CFTC. Selecting a secure broker contributes to a premium online trading experience.

Each brokerage firm has strengths and weaknesses. This article answers the question, “Is Interactive Brokers legit?”

Interactive Brokers Saxo Bank TradeStation Global
Banking backgroundNoYesNo
Broker listed on stock exchangeYesNoNo
Annual financial statements on websiteYesYesYes
Mobile two-step authenticationYesYesYes
Broker ownership transparencyYesYesYes
Broker management transparencyYesYesYes
Broker is audited by the Big FourYesYesYes

Regulation & Investor Protection

The foundation of a brokerage firm’s trustworthiness is its licenses. Top-tier licenses are granted by top-tier regulators and require years of consistent safety practices. Interactive Brokers is regulated in the USA, UK, Ireland, Luxembourg, Hungary, India, Australia, Canada, Japan, and Hong Kong. It has licenses from the IIROC, FINMA, FSA, FCA, SFC, MAS, and CFTC.

Interactive Brokers
Country of regulation:USA, Ireland, UK, Luxembourg, Hungary, India, Australia, Canada, Japan, Hong Kong
Investor protection amount:£85,000 or $500,000 (but only $250,000 for cash) in the UK depending on the assets you hold; $500,000 ($250,000) in the US; €20,000 (IB Ireland & Luxembourg) or €100,000 (IB Central Europe) in the EU, CAD 1 million in Canada; HKD 500,000 in Hong Kong

A second important variable is a broker’s investor protection programs. The FCA in the UK provides the Financial Services Compensation Scheme (FSCS) with protection for £85,000 for each covered account. The investor protection amount for non-UK residents is €20,000.

Other aspects that contribute to a broker’s trustworthiness include its banking background, stock exchange presence, transparent fee structure, two-step authentication, ownership transparency, and auditors.

Banking Background

A banking history adds to the safety of an online broker. Interactive Brokers doesn’t have a banking background.

Stock Exchange Presence

A brokerage firm present on a stock exchange is trustworthy. This tells investors that a broker complies with strict reporting requirements. Interactive Brokers is listed on the NASDAQ stock exchange.

Transparent Financial Statements

Financial statements show valuable information about an online broker’s practices. Interactive Brokers publishes annual financial reports.

Two-Step Authentication

Online trading accounts must have access to the best safety measures. Interactive Brokers offers two-step authentication on all its platforms.

Ownership & Management Transparency

Interactive Brokers publicly shares details about its ownership structure. The basics of its management structure are available on its official website.

Big Four Auditors

The “Big Four” are international financial auditors that performs audits on financial brokers. These auditors are WC, KPMG, Deloitte, and EY. The Big Four audit Interactive Brokers.

Final Verdict

Interactive Brokers is a leading brokerage firm with professional platforms and services. It is a secure broker with top-tier licenses. You should check our in-depth reviews to learn more about brokerage firms and safety features.

Interactive Brokers compared to other brokers:


Methodology 

The mission of Business24-7 is to provide comprehensive, unbiased ratings and reviews of online providers. User experience, the mobile experience, customer service, costs and fees, security, the quality of trade executions, the products available on their platforms are all part of our six-month evaluation of a providers’s platform. The rating scale was based on thousands of data points that have been weighted into the scoring system.

Providers were also required to fill out a multi-point survey regarding every aspect of their platform. In-person demonstrations and evaluations were provided by the majority of the online providers we reviewed.

Stefan Grasic, along with our team of industry experts, conducted our reviews and developed this methodology for ranking what form is used in online investing.

Business24-7 maintains high editorial standards and provides the best advice and recommendations. The products and companies that we review may compensate us when you click on the links on this website. Click below to find out more about our review process and methodology.

Disclosure

All trading involves risk. More than 80% of investors lose in spread bet and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.

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Stefan Grasic (Dipl.-Jur) is the World Wide Director of research for Buisness24-7 and has considerable experience in the financial and investment niche, but also enjoys writing articles for the general readership. Stefan is an active Crypto, Forex and general investment researcher advising blockchain companies at their start up level. He keeps fit by mountain biking, surfing, skiing and lots of other adrenaline sports.

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