Interactive Brokers and Halifax Investment Management

[Anonymous]

can anyone shed some light on the story in the SMH today reference the financial affairs of Halifax who – I wasn’t aware of this – operates Interactive Brokers in Australia.

Should we be worried?

https://www.smh.com.au/business/banking-and-finance/nearly-60-million-in-customer-money-mixed-up-at-collapsed-broker-20190212-p50x9a.html

[Nick Radge]

This occurred a while back.

Will not impact us.

If you want a full background you can call me in the office sometime.

[RobGiles]

related to this topic, how solid / safe / legit do you think IB’s client segregation of funds is Nick, should there ever be another market meltdown? Is there any revised thinking as to who to use for low trade frequency systems if one wishes to diversify counter party / broker risk?

[Nick Radge]

The main difference is that Halifax was a small backyard operation with a few outposts. It had a single director.

Interactive Brokers is a very large corporate entity that is listed on the NYSE.

Apples and oranges.

That said, any and every broker is potentially susceptible to fraud or compliance breaches. We only need to look back at MF Global a few years ago.

As usual, the safest course of action is to diversify. I have my SMSF, which trades the Growth Portfolio, housed at Macquarie and is protected with the HIN based system. I’m actually looking at Open Markets as a new provider. They’re 0.07% rather than the Macquarie 0.12% and have the same HIN protection.

PS; I dealt with the Halifax owner many years ago when I was launching managed accounts. I ran for the door after we spoke – he was clearly dodgy.

[#REF!McGrath]

Nick, did you take a look at Open Markets? if so what were your thoughts.

I use my work super fund which has a self invest facility which I use for the Growth Portfolio. However their brokerage rates have increased such that they are charging brokerage $29.50 (order value up to $10,000) & $46.50 (order value $10,000 to $27,500).

I now have to option to move funds from my work super fund into my SMSF so was also looking at Macquarie.

[Nick Radge]

I’m helping my daughter set up an account and we decided to go with CMC Stockbroking. Very easy to setup and very good customer service.

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