IB advisor accounts, what does this mean?

Discussion in 'Professional Trading' started by crgarcia, Oct 24, 2007.

  1. What the CAPS mean?

    IB caps the amount of advisor fees earned in any 360 day period to 25% of the client's average equity over this period, with additional cap limits at 30 day increments in-between (i.e. 7.2% over the last 30 days, 17.7% over the last 180 days). When any fee cap is exceeded for a client, the advisor will not receive any client fees until the fee cap is no longer exceeded. IB will continue to charge its standard commissions when the fee cap limit is exceeded. Please be aware that advisors are solely responsible for ensuring that the fees they charge are reasonable and in accordance with regulatory requirements. The complete cap schedule is as follows:

    Period Fee Cap %
    30 days 7.2%
    60 days 10.2%
    90 days 12.5%
    120 days 14.4%
    150 days 16.1%
    180 days 17.7%
    210 days 19.1%
    240 days 20.4%
    270 days 21.7%
    300 days 22.8%
    330 days 23.9%
    360 days 25.0%
  2. JackR


    Dictionary definition:

    An upper limit; a ceiling

    Example- The agreement placed a cap on credit card interest rates.

  3. Even if you had massive profits for your client (and thus for yourself as performance fees), IB limits how much you can charge?
  4. JackR


    Yes. 25% of the massive profits.