Press Release

Greenwich, Conn. – June 27, 2024 - Results from a new survey by Interactive Brokers (Nasdaq: IBKR), an automated global electronic broker, reveal that independent financial advisors believe robust technology, coupled with multiple custodial relationships, will drive firm growth. The survey also found that advisors consider growing their business to be their biggest challenge in 2024.

The 2024 Interactive Brokers Advisor Insights Survey found that advisors believe technology – and specifically automation – can transform their work with clients. Seventy-nine percent of respondents agree that automation gives them more time to cultivate client relationships. Six in 10 say that automated processes enable new team members to get up to speed faster. And a similar percentage (58%) say that automation in account management reduces overhead costs.

“Automation in day-to-day operations makes processes more efficient, so advisors have more time for clients and cultivating new relationships,” said Steve Sanders, Executive Vice President of Marketing & Product Development at Interactive Brokers. “Advisors want robust technology that keeps costs low so they can manage their firms the way they want – this is why we’ve leaned into automation since the beginning and it’s why others are now doing the same.”

The survey revealed that advisors are asking for more automation specifically in the tools they use to manage client accounts.  Sixty-five percent of respondents want more automation in the new account opening and client onboarding process.  Advisors say client reporting and portfolio management could benefit from increased automation as well.

Multiple Custodians to Serve More Clients

Using multiple custodians makes good business sense for advisors, the survey also found. The main reason advisors go the multi-custodial route is client preferences, with service availability and diversity in investment product offerings rounding out their top three reasons.

In fact, the multi-custodial model seems to be the norm. Most advisors surveyed (64%) report using at least two custodians, with 34% using three or more. Sixty percent of advisors who only use one custodian say they are open to using more.

Advisors are price-sensitive when considering custodians. Those surveyed cite cost as the overriding reason for choosing one custodian over others. A custodian’s operations, including its customer support, along with its trading platform are other factors that weigh heavily on the decision.

“It makes sense that most firms use a multi-custodial model. With a second – or even third – custodian, fiduciary advisors can access products that serve their clients best more easily,” said Sanders. “Portfolio aggregation tools like PortfolioAnalyst can link accounts regardless of where they are held, so today’s advisors are very well-equipped to provide truly holistic, financial planning advice.”

For example, in today’s environment, advisors are paying close attention to how client cash balances are handled. Seventy-six percent of those surveyed say theyare more focused on utilizing high-interest rate accounts for cash balances than they were three years ago. In fact, 80% agree that as fiduciaries, advisors should manage client cash balances in accounts that offer high interest rates.

Room to Grow

Advisors are getting more aggressive with their marketing in 2024, citing winning new business as the biggest operational challenge of the year. They are also asking for more client referrals and doing more industry networking in order to spur firm growth.

This desire to grow may be tied to plans for team expansion down the road. Thirty-nine percent of advisors surveyed say that recruiting and training young talent to take over the business is part of their long-term succession plan.

About the 2024 Interactive Brokers Advisor Insights Survey

In its first-ever survey of its financial advisor clients, Interactive Brokers asked respondents to weigh in on the impact of technology and custodial relationships on firm operations and their ability to grow. The global email survey, conducted in April 2024, was completed by 100 fee-based, independent advisors with an average of 24 years of experience and $72 million in assets under management. Twenty percent of these advisors report managing an average of $278 million in client assets.

About Interactive Brokers Group, Inc.:  

Interactive Brokers Group affiliates provide automated trade execution and custody of securities, commodities, and foreign exchange around the clock on over 150 markets in numerous countries and currencies, from a single unified platform to clients worldwide. We serve individual investors, hedge funds, proprietary trading groups, financial advisors and introducing brokers. Our four decades of focus on technology and automation has enabled us to equip our clients with a uniquely sophisticated platform to manage their investment portfolios. We strive to provide our clients with advantageous execution prices and trading, risk and portfolio management tools, research facilities and investment products, all at low or no cost, positioning them to achieve superior returns on investments. Interactive Brokers has consistently earned recognition as a top broker, garnering multiple awards and accolades from respected industry sources such as Barron’s, Investopedia, Stockbrokers.com, and many others.

Contact for Interactive Brokers Group, Inc. Media: Katherine Ewert, media@ibkr.com