SIPP Product at Interactive Brokers

This is a discussion on SIPP Product at Interactive Brokers within the Brokerages forums, part of the Commercial category; I don't think SIPP provision goes against the IB business model. They already offer IRA accounts in the US, which ...

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Old Jan 9, 2006, 2:38pm   #21
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I don't think SIPP provision goes against the IB business model. They already offer IRA accounts in the US, which are basically the same thing. The question is more likely to be can they make it pay, and/or find a suitable trustee/administrator.

CFDs I believe do not fit into the IB model. Their whole thing is about getting access to exchanges, not OTC. That might not stop them though ...
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Old Jan 9, 2006, 5:02pm   #22
 
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The US market is 6 times that of the UK hence why I personally think they may not do a SIPP wrapper.

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Old Jan 9, 2006, 6:04pm   #23
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Fair comment. What if all the charges can be put into the wrapper product though? Then it's essentially a no-risk deal from IB's perspective.

We'll just have to see. Personally I would lap it up if happens since my SIPP is currently stuck in a conventional brokerage account and I don't like CFDs. The IB account would be ideal.
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Old Jan 13, 2006, 4:11pm   #24
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Old Jan 13, 2006, 4:14pm   #25
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Sipps

Thank you for your comments. We are currently reviewing supporting SIPP accounts. We welcome your comments.

Sincerely
Interactive Brokers


Quote:
Originally Posted by Mattybuoy
I don't think SIPP provision goes against the IB business model. They already offer IRA accounts in the US, which are basically the same thing. The question is more likely to be can they make it pay, and/or find a suitable trustee/administrator.

CFDs I believe do not fit into the IB model. Their whole thing is about getting access to exchanges, not OTC. That might not stop them though ...
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Old Jan 15, 2006, 3:15am   #26
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OK here's another comment

I have been doing some serious reading of the IB website and forums trying to work out what it's all about. Mostly I like what I see, but some things are rather opaque.

Anyway ...

US IRA accounts at IB (or indeed at any brokerage) are apparently required by federal law to be "Cash accounts". This basically means no margin on stocks. I haven't investigated the futures and options rules closely but they are probably similarly restrictive.

Now as I understand it, in the UK SIPPs are allowed to borrow, and the scope of the borrowing is to be extended come "A Day" i.e. 6 April this year. However, it is not clear to me whether this only applies to property investments or also includes financial instruments.

To get to the point: If a hypothetical IB SIPP account were to be a "Cash account" only then there would seem to be little to differentiate it from the range of existing SIPP accounts.

---
Just musing ...
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Old Jan 15, 2006, 8:13am   #27
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Quote:
To get to the point: If a hypothetical IB SIPP account were to be a "Cash account" only then there would seem to be little to differentiate it from the range of existing SIPP accounts.
How about:-

1. The outrageous commissions charged on other SIPP accounts.
2. The outrageous charges on other SIPP accounts.
3. The restricted range of markets available on other SIPP accounts.
4. The restricted trading times available on other SIPP accounts.
5. etc, etc, etc.

If IB get it right they will attract £m(b)illions. They will certainly get my few £1,000s.
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Old Jan 15, 2006, 4:07pm   #28
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I currently have a SIPPDeal account. There are no admin charges and the dealing charges are 0.75% for stocks with a GBP 15.00 minimum. Not suitable for trading but it's fine for investing, which is all you can sensibly do with the allowable investments anyway.

As to the point about restricted range of markets. The IB multi-currency facility is implemented using margin loans. No margin = no multi-currency = no foreign markets.

I'm not saying an IB SIPP wouldn't have some advantages, cheap commisions being the main one, but without margin they would be limited.
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Old Jan 15, 2006, 6:38pm   #29
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Mattybuoy, You may find better value using one of the brokers via the Sippdealxtra product (and better execution too). I think you get charged an admin fee but 0.75% dealing charge these days really isn't on.
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Old Jan 15, 2006, 6:50pm   #30
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Yes there are definitely better offers around. However, I am going to wait until after A Day to move at which point there will probably be some new offerings and substantial changes to those of existing providers.

--
If I were to change now it would be toss-up between Idealing and Squaregain. Idealing has direct access to LSE but their non-SIPPDeal wrappers have higher charges. Whereas Squaregain does not have direct access but does offer more coverage of foreign markets, and the cheap SIPPdealextra wrapper is available.

Etrade may be another possibility but the information about it is thin.

Last edited by Mattybuoy; Jan 15, 2006 at 7:00pm.
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