Thanks so much for your detailed reply. One thing unclear to me is why you didn't choose route 1, the RIA route. From your explanation it appears that the RIA route requires much less paperwork and maintenance, but is still able to generate client income on IB. You have even passed series 65, but didn't end up being a IAR/RIA. Is there any particular disadvantage of managing client money on IB by creating an LLC as a RIA and the trader becoming an IAR. Could you please give some more insights? This is actually the route I am seriously considering, thinking that it requires less administrative work/costs than a hedge fund (or is it not the case?). I am also in California. Thanks again.