No. of Recommendations: 3
I haven't really looked into this, but I thought it was removed only for their new entry-level account type "IBKR Lite" which had other disadvantages? Different interest rates, etc.
The headline of that account is "no commissions", but (there ain't no thing as a free lunch) it doesn't include the usual "smart routing" which is what gets you the best executions. Payment for order flow??
But at a quick glance, maybe you're right, it seems there is no longer a minimum maintenance fee for either account tier.It turns out it's 2 separate things.
First, IBKR introduced IBKR Lite in the US in 2019, without the $10 minimum monthly fee. They were responding to their competitors' moves to no commission trading, where their competitors made it up by selling order flow, something IBKR has always refused to do. In order to remain competitive, they split their service into 2: their traditional service that they renamed IBKR Pro in the US and Canada, which still had low commissions (usually $1), low interest rates charged on loans, minimum monthly fee, etc., and IBKR Lite, which had no commissions, but charged higher rates, sold order flow, etc, like their competitors. At the time, I remember they actually encouraged their clients to remain with the 'Pro' version which would provide for lower overall costs for most clients, but they didn't want to lose market share of people for whom no commissions was the overriding concern. European clients apparently have continued to only have the equivalent of IBKR Pro, so this isn't an issue for them.
Then, in July 2021, they removed the $10 minimum monthly fee from IBKR Pro in North America and in accounts outide NA as well:
https://www.financemagnates.com/forex/brokers/inte...BTW, I should have mentioned that this is of interest to me both as a client of about 15 years' standing and as an investor for the past 10 years or so. As a client, I think they are wonderful, similar to the way I feel about Costco, Amazon, Apple and CoucheTard, and it may be no coincidence that these have turned out to be great investments. IBKR trades at about 25 times earnings, grows its assets under management by about 20% a year like clockwork, has a low-cost advantage that makes their margins improve as they get bigger, and it is an investment I intend to hold onto for a long time.
If anyone can think of other companies that combine fierce customer loyalty, a dedication to providing low cost to the customer (doesn't quite apply to Apple!), and honest conservative management, I would be delighted to add them to my list of companies to follow as potential investments.
