Interactive Brokers Account Transfer

I was an Interactive Brokers client over a decade ago. I used it to create a separate trading account from my primary ThinkOrSwim (TOS) account before TD Ameritrade acquired TOS. As I mentioned in my previous post, I’ve been thinking about what to do with my TD Ameritrade account because TD Ameritrade was acquired by Charles Schwab and while Schwab is one of the few brokerages that supports US expats, it doesn’t operate in Canada. While I could try to hide the fact that I’m in Canada, they already know that I live in Canada because my equity awards are handled by Schwab. I watched a pre-recorded webinar on investing for expats and they recommended using Interactive Brokers. So I went ahead and created an account.

These instructions don’t apply to everyone since I know that not everyone is in the same situation. I created an account using the US address of a relative because:

• My TD Ameritrade account uses the same US address. It might be paranoia, but I didn’t want anything to prevent the account transfer from processing. I’m pretty certain that the only things that need to match are the account type, the account title, and the social security number. But I didn’t want to risk it. I plan to change my address at Interactive Brokers to my Canadian address once all accounts are transferred.
• I wanted to make sure that my accounts were domiciled in the US before I change my address to my Canadian address. Again, just my paranoia.
• I wanted to be eligible for IBKR Lite, which offers commission-free stock trades. I read that you don’t lose IBKR Lite when changing your tax residence, so we shall see.

Creating an account was dead simple. All I had to do was:

• Choose which type of account to create.
• Enter personal information.
• Enter employer information, presumably to ensure that you’re not making insider trades.
• Specify the amount of personal trading experience.
• Designate primary and contingent beneficiaries.

The account creation process took less than 5 minutes. If you need to create additional accounts, you can do so once your existing account is created. While the first account was created without review, any additional accounts that I created required account review. The review process was quick and the accounts were approved by the following day.

It has been a long time since I transferred accounts. The last account I transferred was my US 401k to a Traditional Rollover IRA and that was a painful process that required sending a physical cheque. Before that, I had transferred accounts a couple of times using ACATS, the Automated Customer Accounts Transfer Service. In the past, it required filling out a form, signing, scanning, and uploading or emailing. Technology has advanced significantly since those days. In order to transfer an account from TD Ameritrade to Interactive Brokers, all I had to do was choose the source broker, how I wanted to transfer, and specify the account type and account number. It took less than a couple of minutes. Here are a few screenshots of the process.

I read stories on Reddit about the account transfer process taking 1-2 weeks, so I wanted to test the waters first before I brought over my primary account. One of my accounts was transferred in 1 business day. I’m impressed. I’m still waiting for the cost basis to be transferred over. Additionally, TD Ameritrade hasn’t charged a transfer out fee yet.

The Interactive Brokers client portal looks modern. A decade ago, it looked like a giant spreadsheet. I tried out the desktop applications and I am not impressed. It is a far cry from being usable and nowhere near the ThinkOrSwim desktop app. That’s one thing that I will miss.

I thought the account creation and account transfer process at Interactive Brokers was smooth.