Interactive Brokers updates mobile app to fit financial advisors’ needs

Maria Nikolova

The enhancements are released as Interactive Brokers seeks to bolster its RIA business segment, while exiting options market making.

Given that electronic trading firm Interactive Brokers Group, Inc. (NASDAQ:IBKR) updates its mobile applications regularly (about once a month on average), it is barely surprising to announce that a new version of its IB TWS mobile application for iOS devices was released on April 21, 2017. The interesting part is not the latest update itself, with the improvements to working with charts and the notification center, but the focus of this update – financial advisors.

Indeed, Version 8.34 of IB TWS for iOS devices enables financial advisors and other multi-account users to route mobile orders to their allocation groups and profiles as well as to single accounts.

This effort to suit the needs of financial advisors in terms of mobile technology comes as Interactive Brokers is building the capabilities of its Registered Investment Advisory (RIA) business segment. According to Interactive Brokers’ latest financial report, the RIA segment accounts for 19% of the group’s overall customer accounts.

Last summer, Interactive Brokers launched Greenwich Compliance, which assists RIAs with legal and regulatory needs. The company enables RIAs to set up their own businesses using its platform, which has contributed to the growth of this segment. Interactive Brokers assists advisors through the registration process of setting up their own firm at a reasonable cost, and then helps with the ongoing compliance questions at no cost.

The beefing-up of Interactive Brokers’ services for advisors comes as it is winding down its options market making operations. The plans for the halt of these activities were first announced on March 8, 2017. Subsequently, in its financial report for the first quarter of 2017, Interactive Brokers said it expected approximately $25 million in one-time restructuring costs due to the wind-down. A significant portion of these costs are set to be defrayed by continuing certain market making activities until the restructuring is complete.

During the conference call accompanying the release of the first-quarter report, Thomas Peterffy, Interactive Brokers’ CEO said:

“We are currently in negotiations to transfer the bulk of our market making business to another firm. While we are pretty far along in the process, we are not yet done. Should that not work out, we have other parties who have expressed their interest. One way or another, we plan to be out of this business and hope to have this completed by the third quarter of this year.”

He hinted at more efforts being dedicated to Interactive Brokers’ Electronic Brokerage business in the future.

“Without the market maker, we will focus all of our attention and energy on building our brokerage business. We think our greatest opportunity and the best use of our strength is in Electronic Brokerage.”

We are curious to see how these plans will materialize and whether they will have any impact on the Forex offering of the company. Also, it will be interesting how the building of the RIA segment will combine with the further development of Electronic Brokerage.

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