Ever heard of the Interactive Brokers of Canada? Ever wondered what they do specifically? All you need to know about them is contained in this article.
If you are considering taking trading more seriously or you have a fairly sizable portfolio, then the Interactive Brokers of Canada are a great choice to put into consideration.
Not only can they be useful when trading shares. You can also engage in options trading in Canada, alongside futures, forex, bonds, and funds on 135 markets all from a solitary integrated account.
Also known by the acronym IBKR, they’re an establishment you should definitely read up on if trading is something that you are interested in.
Stick around and find out all you need to know about them in this Interactive Brokers Review
What Is Interactive Brokers Canada and How Does it Work?
Interactive Brokers (IBKR) is a brokerage firm that was founded in the United States in 1978, and it expanded into Canada in 2000.
IBKR serves institutions and individuals through 12 trading platforms and has a presence in 125 markets in 31 countries; powered by its proprietary SmartRouting technology which finds and delivers the best prices.
In addition to Canada, IBKR operates in the US, Hong Kong, Japan, India, UK, Switzerland, Estonia, Russia, China, and Liechtenstein.
IBKR is regulated by a number of authorities and is also a member of both the Industry Regulatory Organization of Canada (IIROC) and the Canadian Investors Protection Fund (CIPF).
Interactive Brokers Canada Pros and Cons
- Beginners and veteran investors alike have different platforms to work with
- The number of order types is remarkable
- Investment products are multiple and diverse
- Different available account types
- When it comes to sites that are user-friendly, they're not rated high
- The rating of the mobile app is not impressive
- If you are in Canada, don't expect trades that have no commission.
Accounts Offered by Interactive Brokers Canada
First, let’s start with their most popular, the Tax-Free Savings Account (TFSA). If you’re a Canadian resident over the age of 18, you can put money in this account tax-free.
Another popular option is the Retirement Savings Plan (RRSP), which is great for saving for retirement. You can claim all deposits into your RRSP as deductions on your tax return.
The other accounts supported are:
- Individual Accounts,
- Joint Accounts,
- Registered Retirement Accounts (RRSP),
- Friends and Family account for groups of up to 15 people,
- Family Office accounts for individuals who are family office managers,
- Small Business accounts for small corporations and businesses,
- Advisor accounts for individuals who manage both client administration and money,
- Money Manager accounts for individuals hired on behalf of an advisor that is different.
Interactive Brokers Portfolio Analysis
You will love to learn that the Interactive Brokers of Canada’s Portfolio Analyst consolidates, tracks, and analyzes your complete financial performance.
You can link your investments, checking, savings, annuity, incentive plan, and credit card accounts to get an overall view of your financial situation—and plan for the future.
The tool is free for all to use (even if you don’t have an IBKR account), but only customers get to use PortfolioAnalyst’s advanced features and real-time portfolio updates.
All balances, margin, and buying power calculations are in real-time. You can calculate your internal rate of return in real-time, as well.
IBKR’s proprietary Tax Optimizer tool lets you set a default matching method, which you can override for specific symbols if desired.
To help you maximize tax efficiency, the Tax Optimizer provides a “what-if” capability, which provides a preview of P&L for each of the matching methods.
IBKR’s TWS offers the Trader’s Journal, a note-taking feature that lets you record and save trading notes and ideas on any product.
You can save screenshots as part of a note, attach notes to trades, and configure charts to display both orders and executed trades. This is one of the more comprehensive trading journals available from any brokerage.
Interactive Brokers Canada Platform Ease of Use
Their Trader Workstation (TWS) desktop platform is great for professional traders, but not the best choice if you are new to investing.
As a Canadian investor, you will have to use their IBKR Pro platform because they do not offer IBKR Lite in Canada. This will give you access to the TWS platform, which is a powerful tool that supports the trading of any kind of equity, including global assets.
If you are a casual investor and are looking for an easier-to-use desktop platform, consider their WebTrader or Mobile Trader platforms.
Interactive Brokers Education
Interactive Brokers of Canada provides a broad range of investor education programs for customers and the public.
Traders Academy (revamped in 2020) is an online, on-demand resource that features a structured, rigorous curriculum intended for financial professionals, investors, educators, and students who want to learn about asset classes, markets, currencies, tools, and functionality available on IBKR’s trading platforms.
Quizzes and tests benchmark student progress against learning objectives and allow students to learn at their own pace.
Examples of course offerings include introductions to asset classes such as options, futures, forex, international trading, and bonds, and how to use margin.
Some courses cover the various IBKR technology platforms and tools. The website includes a trading glossary and FAQ.
IBKR and industry experts offer daily webinars. These events cover various topics, including how-tos for platforms and tools, options education, trading international products, and more.
There are hundreds of recordings available on-demand in multiple languages, including English, Spanish, Chinese, Italian, and French.
Interactive Brokers Canada Research
If you are a seasoned stock trader or investor, then you probably have a lot of data and research to sift through.
TWS gives you access to several advanced research tools that traders love, like back-testing and scanning. And if you want to use third-party research tools, there are plenty of options available.
While the platform does not come with embedded research tools, it does work with dozens of third-party providers, including Morningstar. But keep in mind that these services can be quite expensive.
If you are new to trading stocks and would like more straightforward research tools, then TWS may not be the best option for you. Many experienced traders find the platform confusing and difficult to use.
You can check out our extensive list of options If you can’t make up your mind about what you think the best trading platform in Canada is.
Interactive Brokers Security and Reliability
IBKR meets or exceeds industry security standards. This includes:
- Mobile app users can log in with biometric (face or fingerprint) recognition.
- Multiple forms of two-factor authentication.
- Client securities accounts at Interactive Brokers LLC are protected by the Securities Investor Protection Corporation (SIPC) for up to $500,000, with a cash sub-limit of $250,000. Excess SIPC coverage provides up to an additional $30 million (with a cash sub-limit of $900,000), subject to an aggregate limit of $150 million.
- Interactive Brokers’ Bank Deposit sweep program enables clients to supplement their existing $250,000 SIPC coverage with $2,500,000 of FDIC insurance on eligible cash balances.
- Through 2020, there were no significant data breaches at any IBKR location reported by the Identity Theft Research Center.
IBKR Securities Class Action Recovery Service
The IBKR Securities Class Action Recovery service was launched in May 2020. It’s an automated service designed to remove the administrative burden of participating in a securities class action lawsuit.
The service automatically detects if you are eligible to file a claim for securities you bought or sold at IBKR in the past.
When applicable, the service submits filings to claims administrators on your behalf and seeks to recover funds for compensation.
Any recovered amounts are electronically deposited to your IBKR account—less a 20% contingency fee.
Interactive Brokers Canada Fees
Interactive Brokers Canada has a system of pricing that is not difficult to understand and grasp.
You can choose to pay either tiered or fixed rates. The tiered price is a low broker commission Interactive Brokers charges you. They decrease the commission depending on the volume, exchange, regulatory, and clearing fees.
If you get a rebate from the currency exchange, Interactive Brokers passes some or all of the savings back to you. The fixed-rate is a fixed low commission per share or a set percentage value of the total trade amount.
Interactive Brokers Customer Service
IBKR has a reputation for being underwhelming as regards customer service, but the company is working to improve its reputation.
A feature added not long ago is an IBot service, powered by an artificial intelligence engine, which answers questions asked in plain English.
IBot is available throughout the website and trading platforms and can help customers find answers—without having to endure long wait times.
- Toll-free telephone support is available 24 hours a day, six days a week
- Callback service lets you request a call back if you need to hang up and don’t want to lose your place inline
- Online chat with a human agent (available from within the trading platform or website)
- Secure message center (available from within the trading platform or website)
- AI-powered IBot directs customers to online FAQs and resources
Is Interactive Brokers Canada Safe?
Yes. Interactive Brokers Canada is covered by CIPF, which offers insurance in the event that your broker fails.
This type of insurance covers your account balance, the market value of securities in your account, and cash owed to you by the broker.
Your resources are further protected by IIROC, the Investment Industry Regulatory Organization of Canada.
This organization provides a transparent environment for brokers and investors alike. Its members must adhere to a set of rules designed to protect investors and to make sure that the industry works for everyone.
Interactive Brokers Transparency
On August 10, 2020, the Financial Industry Regulatory Authority (FINRA) announced it had fined Interactive Brokers LLC $15 million for widespread failures in the firm’s anti-money laundering (AML) program.
The same day, the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) also announced disciplinary actions and fines, resulting in a total of $38 million in penalties paid to the three agencies.
IBKR’s pricing structure is complex, but details are readily available under the Pricing menu on the website. Commissions are broken down by asset class (e.g., Stocks, ETFs, and Warrants; Options, Futures, and FOPs) and by plan—whether that’s tiered, fixed, or free (IBKR Lite) pricing.
Alternatives to Interactive Brokers Canada
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The following are prominent alternatives to the Interactive Brokers of Canada:
Qtrade is undoubtedly one of the best Canadian online brokerage platforms that gives its clients access to bonds, mutual funds, and the stock market. The company was founded in 1999.
Qtrade is renowned for its low fees and impressive customer service, and you can use Qtrade on the web or on their app (which is available on Android or iOS devices).
This is a top independent online brokerage service in Canada with $25 billion in assets under management. It offers free ETF purchases and low fees when you buy and sell stocks ($4.95 to $9.95 per trade).
New customers get $50 in free trades when they open an account on Questrade and fund it with at least $1,000.
3. Wealthsimple Trade
The next alternative to Interactive Brokers of Canada is Wealthsimple.
The Wealthsimple Trade app is one of the most popular ways for self-directed investors to buy and sell thousands of stocks and ETFs on their mobile devices.
It’s Canada’s only no-commission broker for stocks and ETFs trades as of this writing. The app is free to download and use, and it has no account minimums or setup fees.
Final Thoughts on Interactive Brokers Canada Review
If it is not already, Interactive Brokers will soon become the go-to for Canadian investors.
They offer powerful trading tools and a plethora of choices, making it easy for you to find the option that best fits your investment style.
Their rich features come at a fair price, making them accessible to traders of all experience and wealth levels.
Investing can be difficult for the novice, and it can be even more daunting with all the jargon used. However, Interactive Brokers does an excellent job of simplifying and breaking down the experience.
You can access Interactive brokers from anywhere in the world and invest in almost every stock instrument or asset class one can imagine.
FAQs on Interactive Brokers Canada Review
How can I send feedback to Interactive Brokers?
- Log in to Client Portal.
- Click the Help menu (question mark icon in the top right corner) followed by Provide feedback.
When was Interactive Brokers founded?
Interactive Brokers Group, Inc. was founded by its Chairman Thomas Peterffy. Over the last 43 years, it has built itself up to become one of North America’s biggest securities firms with over $9.4 billion in equity capital.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
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