Initially, the company provided a free service that allowed investors to repeat the transactions that portfolio managers executed automatically. When Interactive Brokers Group purchased the Robo-advisor Covestor in 2015, it marked the beginning of the debut of the typical Robo-advisory platform. Professional money managers to outperform market returns are the target audience for Interactive Advisors. We will investigate Interactive Broker's Robo-advisory in further detail so that you may determine whether or not it is suitable for the requirements of your investment portfolio.
Pros
- A diverse assortment of investment portfolio formats
- Portfolios with a focus on social responsibility, including those that emphasize value, sustainable goods, and conscious business, among other things
- An educative instrument for keeping track of goals
- There are several portfolios available with affordable fees.
- The transparent fee estimate calculator
Cons
- There is no tax-loss harvesting done automatically.
- Some managed portfolios feature prohibitively expensive fees and investment thresholds.
- There is a possibility that using the IBKR mobile app will make it more difficult to access IA accounts.
Creating an Account
To become a member of Interactive Advisors, you will first have to register for an account with Interactive Brokers. Following that, you will be asked to complete a brief questionnaire similar to the goals, time frames, and risk tolerance questions presented by other Robo-advisors. Customers may reach members of the customer support department by phone Monday through Friday from 9:00 am to 5:00 pm Eastern Time. There is also the option to send inquiries through chat and email. In addition, customers have the option to consult with certified Investment Advisors. Investors may begin investing as little as $100 in the IA portfolios. However, the managed portfolios may need a greater initial commitment from investors. You are only allowed to invest in portfolios suitable for the level of risk they provide.
You can check the various portfolios, complete with performance information, before joining the service. Potential customers may examine portfolios depending on their level of comfort with risk and the fund families they are interested in. A diverse spectrum of investors, from the most risk-averse to those looking to outperform the market's average return, may choose from various investment portfolio possibilities.
Goal Setting
The tool IA uses for goal formulation, and monitoring is called Goal Tracker. You can save for a wide range of objectives, including retirement, purchasing a house, medical bills, or even a trip. The software will then provide a screen that summarises the first and subsequent contributions and a graph of the average predicted returns, and risk, including both the best-case scenario and the worst-case scenario. You can find how the chance of achieving the goal is affected by modifying the inputs, such as the contributions, objective target dates, and expenditures associated with the goal.
Services for Accounts
The Interactive Advisors platform is not the same as the larger Interactive Brokerage company, where you may engage in self-directed trading, download downloadable trading platforms, and choose from a wide range of financial assets. Customers who already have an account with IA's Robo-advisor can upgrade to an IB Universal Account to access all of the self-trading tools.
Despite the availability of customer support, this platform is most beneficial for investors looking for digital investment management with no assistance from other people. The remarkable characteristic of this platform is the extensive selection of investment portfolios that are offered. IA customers are not permitted to use margin, and none of the portfolios includes margin trading in their trading techniques. There are no charges associated with trading, including commissions. Withdrawals do not incur any further costs either.
Management of Cash Flow
On the IA platform, Cash Management Accounts are not a feature that can be accessed. Consequently, Interactive Advisors does not provide clients with automatic cash management sweeps.
Cash Management Accounts are readily available for anybody looking for them at Interactive Brokers.
The Construction of Portfolios
The digital customer interested in managed investment portfolios with minimal fees and various management methods will find Interactive Advisors an excellent choice. Both IA-designed offerings and many investments managed by third parties are included in the accessible portfolios. The topic of portfolio management will be discussed in more depth in the section that follows this one in this review.
Portfolio Management
There are two primary classifications for investment advisory portfolios: those managed by the IA themselves and those handled by independent advisers. There are numerous possible portfolios within each category, and these portfolios all have different account minimums and costs associated with them. Screening for portfolios may be done by investors based on the following criteria:
- Risk ranges from Conservative to Speculative, while management costs range from 0.20% to 1.50%.
- Minimum investment
- Asset type: Stock, ETF, or mixed Management firm
