A relative has an LLC they use for trading and they would like to open a sub-account under my FA account. I will still be trading their account. Would having an LLC as a sub-account require switching to professional fees (even though I am not charging anything to manage their account)? I'd like to help them out but I don't want my own fees to go through the roof.... Does anyone know the answer or has done this? IB's response was just that I can open the account....DUH they never answered my question. SSB
Having an LLC sub account would not effect the professional status of the master account. It would not effect market data designations or advisor registration requirements.
You should be able to open the account easily, however, you probably will not be able to charge any fees.
It's no different than lying about pro status -- I could lie on my application and say I'm not a pro and avoid the fees but if I get nailed then I'm in trouble. Same here you could abuse it -- but if you're really a pro then you're in trouble....
Yes, at least that's what I've heard. An acquaintance set up an LLC and had to move to MB Trading to avoid pro fees despite the fact he was not a pro. I just wanted to make sure if I add an LLC as a sub-account that I won't be forced to upgrade to pro fees. SSB
The definitive answer: The pro/nonPro status is determined by status of the person actually viewing the data not by the status of the beneficiary account. If the FA is acting in a professional capacity, for example is a registered FA or is charging for the advisory service, then the data fees will be classified as professional. If it is a friends&family type of account, where no fees are charged, it is quite likely that the user classification would be nonPro (unless the FA himself is a registered dealer or some other obviously pro person).
Bumping this thread up a few years... I'm in this exact spot today - setting up an LLC, already have a FFA that I use for my current accounts (non-pro, no fees charged, no RIA, etc...). Could anyone with recent experience like this verify whether I will still likely be able to not pay pro fees at the FFA master account level if I roll the LLC underneath it? I asked a customer service rep and they told me that it would automatically classify the advisor as a pro if one of the umbrella accts is pro, but I'm willing to take the real live experience of an ET poster over a CSR. For the record, I'm not trying to game the system, just using a single member LLC for tax purposes.