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Investment

Opinion: Interactive Brokers Trading Platform for Self Managed Super Fund (SMSF) Investing

Interactive Brokers is basically the industry standard when it comes to a trading platform that is accessible to the everyday SMSF investor. It caters for retail level traders all the way up to hedge fund managers which is why Interactive Brokers is considered the most advanced and accessible trading platform available today.  It is a popular platform because: 

  • Active traders enjoy very competitive commissions (when compared with the likes of Commsec and others)
  • The trading platform is advanced, and it caters for all levels of traders 
  • There is a large selection of assets to trade all around the world. 

Interactive Brokers recently released IBKR Lite, which is a simpler version of the platform and a different pricing plan, which provides SMSF investors with equity trades with no commissions on most exchanges. 

Any advanced tools to help your investing?

There are a plethora of tradable assets from all around the world on the platform and lots of in-depth market research available and market analysis tools. 

If you’re looking for advanced trading and order execution functionality for a range of assets then you won’t be disappointed. 

- The Accountant (semi-retired)

Bells and whistles is not everyone's cup of tea.

I found the website is highly technical and somewhat difficult to navigate. The trading platform can be a little overwhelming at first and requires a level of research to gain confidence in use. Inactivity fees are charged for IBKR Pro platform users when the account has been inactive for some time.

- The Marketing Executive (mid-30s)

Suited to advanced level investors?

Interactive Brokers is a trading platform that caters to a range of investors from beginners to pros but it will require some advanced knowledge to operate the platform. It offers SMSF investors a level of technology that many could only dream about and is priced very competitively compared to other conventional brokers in Australia.

- The Small Business Owner (early 60s)

IBKR Lite might be a better starting point?

Only recently, Interactive Brokers launched a more simplified version of their trading platform called IBKR Lite which caters for more casual investors who don’t need all the bells and whistles of the IBKR Pro platform. IBKR Lite offers users unlimited free trades for equities and ETFs listed in the US, which is pretty impressive. If you want to dive a bit deeper into the market by trading things like futures, options, bonds and much more, Interactive Brokers offers 125 markets in 31 different countries, and they can be traded on the Interactive Brokers Pro or Lite accounts.

- The Thrill-seeker (late-20s)

It's jam-packed with advanced trading features.

Offering a vast selection of in-depth analysis, market research and news services, Interactive Brokers gives investors the news that matters most in real-time. It will display news and information relevant to the assets you are trading to ensure you are always kept up to date. If you want to take it to the next level, there are over 100 additional news and market data providers that can be added by subscription to the trading platform which is very handy for the savvy SMSF investor.

- The Accountant (semi-retired)

I heard about brokerage-free trades.

Interactive Brokers offers the broadest range of assets to trade than any other broker in the world. SMSF investors will enjoy commission-free trades on over 4300 mutual funds and 98 commission-free ETFs. Better still, Interactive Brokers Lite customers get commission-free trades on all US-listed ETFs. There’s also tiered commission pricing to lower brokerage fees even more. SMSF investors who trade over 300,000 shares a month can pay as low as $0.002 or less per share. Market data and regulatory fees come into play on this plan. You can also trade options on both the Pro and Lite versions of the platform with a minimum options trade commission of $1 per trade.

- The Marketing Executive (mid-30s)

No minimum account balance?

It is worth noting that both the Pro and the Lite accounts have a $0 account minimum and offer investors the ability to purchase fractional shares, meaning you can now own a piece of Berkshire Hathaway Inc without having to pay the $420,000 per share price at the time of writing! The Lite trading platform does not charge maintenance or inactivity fees to account holders. The Pro version does charge an inactivity fee, which you can get around if you trade regularly.

- The Small Business Owner (early 60s)

The trading platform is next level.

The platform is considered the industry standard for investors around the world. The advanced platform includes features such as alerts, watchlists, real-time data and a fully customisable dashboard which you can adjust to suit your trading style and assets of interest. IBKR Pro is much more advanced than your average Commsec platform, so it’s worth doing your research before making the switch. The mobile application is also pretty special and available to both Lite and Pro customers. Investors can create preset order templates, which makes executing orders a breeze. Better yet, any presets which are set up on the desktop platform will flow through to the mobile app.

- The Marketing Executive (mid-30s)

Inactivity fees apply on Pro accounts?

Catering best to active traders, Interactive Brokers has very low commissions, but you need to trade regularly; otherwise, you have to pay a small fee. It all comes back to your account balance, with accounts with a balance of $2,000 or less must trade commissions of $20. Balances of $100,000 or less must trade a minimum of $10 a month in commissions. The Lite version of the platform does not charge inactivity fees which is positive.

- The Accountant (semi-retired)

It's not right for every SMSF investor.

The Pro platform supports active traders with their highly competitive commission structures. The Lite version of the platform caters to everyday investors, as the platform is simple and easy to learn. If you are an absolute beginner investor, you might be better opting for a broker that offers some additional training and educational resources. Still, if you want to experience what is widely considered the best trading platform for SMSF investors, you can sign up here.

- The Small Business Owner (early 60s)

General Advice Warning

Kind words from Aussies managing
their own self funded futures

  • SMSF Mate is a unique website because it has ideas about how to approach SMSFs, insurance and other financial topics that come straight from first hand experience. It's much more useful than what you find on all the other financial websites that just offer generic info that you could easily get on the ATO's website. It's also nice to know there's no financial incentive behind the information, it's legitimately there to help people understand self-managed super funds and how to get the most out of them, not to get an affiliate commission from a broker or other financial services provider. The investment product information is also incredibly useful, I've never seen this kind of functionality on any other website that let's you look at such a wide range of products, sort by what info is most interesting or important to you, and subscribe to updates for different funds and financial products all in one place. Definitely worth checking out if you own or are considering an SMSF!

    David G, Self-Employed, SMSF Owner
  • SMSF Mate provides a unique insight into superannuation and financial topics in a way that is easier to understand than conventional websites. The colloquial nature of the site makes it easy to understand and they often speak about complicated topics in lamens terms so I can wrap my head around them. The investment product information is a great way to research funds that I am interested in investing in with my SMSF and there is a lot of helpful information on the site for better structuring my investment portfolio. In comparison to other websites which offer similar information, SMSF Mate excels as the information is free to access whereas many other sites charge a subscription fee for the same thing. Overall, I think SMSF Mate is a great resource for SMSF trustees and is worth looking at for a variety of super-related topics. Thanks.

    Tim B, Business Owner, SMSF Trustee