IB Advisor Friends & Family account

Discussion in 'Retail Brokers' started by NKNY, Oct 14, 2005.

  1. NKNY


    Hi guys...

    I have an account with IB already but may need to open an additional 2 accounts. The reason behind this is to give myself the ability to track different models over time.

    Now I was just simply planning on opening 2 new accounts, all with their own user ID and password but was wondering if the friends and family account would allow me to bypass the separate logging in while trading all three accounts from the same interface.

    The question... Would I see 3 different statements when logging in to the accounts area..?... I would like to be able to download three different statements for three different accounts. I cant think of any other way to do this without separate statements...

    Any help would be appreciated....

  2. danoXP


    I opened a Friends and Family account with IB w years ago with the same thinking (at the time I had 4 IB accounts).

    Unfortunately, at that time, the FFA account did not have the same capabilities as the Individual account. That was surprising then.

    So I closed down the FFA and setup seperate computers for each account.

    Look closely at the TWS manual for the differences before going through the trouble of setting the account up.
  4. NKNY


    Thanks for the help guys....

    Really appreciate it...

  5. I've been using a friends and family account for about a year, I've never had a problem doing anything -- as near as I can tell F&F accounts now have all the capabilities of an individual account, except the ability to use their webtrader interface (trade via web pages vs. their Java TWS interface).

  6. jsmith


    How does stock allocation work for a FF Account?

    What if you buy 2000 shares of stock XYZ.
    You only get filled for 1200.

    Are you buying the stock for each account in the main account?
    Does the sub-acc try to buy the same stock at their ratio?
    Do you decide at the end of the day how much stock is allocated to each account?

    Example Plz.

    Thanks to anyone that can help me understand how this works.
  7. JackR


    IB offers a number of allocation methods, fixed ratio, percent of availability equity, and something else, the name of which I don't recall. Go to the main IB web page. Type in "allocation" in the search function and you will get all the details. Allocation is done at time of trade.

    You can set up different account groups. Say you have three accounts that are cash-type such as IRA's Roth's, and your mother's portfolio. You also have your trading account in which you do everything and anything. You can set up the "safe" account as a group and set it to do a 1/3, 1/3, 1/3 allocation of a trade or set it to allocate based on available equity or if you do a fixed share size all the time, say 100, you could set 46, 36, 18.

    You can trade against any individual group or all groups. When you want to trade your trading account you set the active account (group) to that group, when trading the safe group and using its allocation method, you select that group.

    One problem I have with the auto allocation and sizing is that you have the capability to set a default size (either $ or number of shares/contracts/etc). I like to risk-manage by doing a fixed percent of total account value when entering a position, but IB will not do this automatically. You must compute and manually enter. The default size feature, as currently working, always rounds down to the lower 100 shares when you ask for a Default $ amount. Thus if you have a $5000 default amount and you enter an order to buy XYZ and XYZ is trading at $27 you will buy 100 shares not 200, nor do they compute the number of shares and provide for an odd-lot purchase very close to $5K. Round lots may make a difference in execution in a day trading account but they make little difference in a swing or longer-term account and execution spedd is the only reason I can think of for not allowing odd-lots. Why no rounding up is also beyond me..

    Another caveat. IB gives you 100 different data quotes for $10 if you trade less than $30 worth of commissions in a month. If you currently have three accounts, each with 40 positions and you watch some indicators like the S&P, DOW, TRIN, Advance-Decline, etc., you can see them all for "free" as long as you generate $30 in commissions in each account. If you go to a F&F account you will get only 100 data quotes. The same $30 rule covers as many accounts as are in the F&F account. You'll only pay $10 no matter how many accounts. Make the $30 any which way and the fee is waived. However, you cannot get more data until you generate more than $800 in commissions in a month. Then you get one additional data quote per $8 above the $800.

    If you open a F&F account with a total of 120 issues in the combo you'll only get 100 quotes. What quotes you get depends on the sequence in which you look at the sub-accounts, if you open the entire F&F account (consolidated account) the quotes appear to be some random show/no show process. If you have an external data feed it obviously will not matter except that you may not see an IB TWS quote when you enter an order. IB may have changed this since I opened my own F&F account, discovered the problem, and took action to fix itl. Then again, they may not have done so.

  8. Sanjuro


    I think I get it.

    If you get a partial fill, the part that is filled is allocated to each account based on the method you picked.

  9. You are correct it will be allocated based on the method specified but be careful. You can specify a ratio, percentage or share amounts, it may not work the same for all types (if you use shares for example -- which I've never used -- it may go by your exact allocation and if it runs out of shares the accounts at the end get nothing.

    Another thing to be careful with -- I have several profiles set up and I've chosen the wrong allocation a few times, once ending up short 1 share of a stock in an IRA, which IB immediately closed out since you cannot short stock in an IRA. It was 100% my fault but I wish their software could detect this -- it would be a nice to have but I know I need to be more careful!!!

  10. timmyz


    make sure you are able to open 3 separate accounts under your name. the idea of a friends and family account is that you are the advisor and you manage your friends' and family's money, so each of the sub-accounts should belong to someone else.

    also, i don't think you will be able to freely transfer fund between the three accounts. if one of your models had awesome performance and you want to rebalance the cash in each account, i don't think you can do that freely (especially if each of the accounts is under a different name).
    #10     Oct 23, 2005