Rules for Three-Level Advisor Accounts
Instructions
Advisor accounts with Advisors as client accounts (three-level Advisor accounts) are subject to the following rules.
| Function | Advisor Account | Proprietary Trading Group STL Account |
|---|---|---|
| Trading |
Trading criteria can be different for top-level Advisors and their second-level Advisors. Top-level Advisors can trade on behalf of all clients in their Master account, but only second-level Advisors can allocate trades to their clients. Second-level Advisors can only trade on behalf of their own clients. Advisors at both levels can impose trade restrictions, but second-level Advisors can only do so on behalf of their own clients. Second-level Advisors can only trade products for which their top-level Advisors have trading approval. |
The top-level Advisor can trade for the STL Master account and any STL sub account. The top-level Advisor or the STL Master account can apply trading restrictions to STL sub accounts. Trading criteria are applied in the same manner as for single accounts. |
| Margin |
Top-level Advisor Master accounts are margined separately from their second-level Advisors. Second-level Advisors and their clients are margined in the same manner as standalone Advisors and their clients. |
Advisor Master accounts are margined separately from their client accounts. STL Master and sub accounts are margined in the same manner as standalone STL accounts. |
| Markups and Fees |
Top-level Advisors can enter fee and markup schedules for all Master sub-accounts: clients’, second-level Advisors’, and second-level Advisors’ clients. Second-level Advisors, however, can only enter fee and markup schedules for their own clients. All fees are collected under the Master account then swept back to each second-level account. They appear separately on client statements, and because each client must sign-off on all fees they should be labeled by type, not Advisor (“Percentage of Assets Fee” and “Percentage of P&L Fee, NOT “Advisor One Fee” and “Advisor Two Fee.”) |
Advisors enter fee schedules for STL Master accounts in the same way they do for organization accounts. Fees are collected under the STL Master account then swept back to Advisor accounts at the end of each day. |
| Funding |
Top-level Advisors cannot perform funding functions on behalf of second-level Advisors or second-level clients. Second-level Advisors can perform all funding functions for their own clients, including Additional Advisor Authorizations. |
Advisors fund STL Master accounts in the same way they fund organization accounts. Deposits and withdrawals must be made from the STL Master account and transferred to/from the sub accounts. |
| Reporting |
Top-level Advisors can see reports on all accounts held within their Master account, including clients, second-level Advisors and second-level Advisors' clients. The reports can be sorted by Advisor or listed by client. Second-level Advisors can only see reports on their own clients. IBKR handles tax reporting for all accounts. |
An STL account under an Advisor has access to the same reports available to a standalone STL account. The reports can be consolidated or sorted individually . IBKR handles tax reporting. |
| White Branding | IBKR supports white branding for top-level Advisors, and for second-level Advisors who are registered. | IBKR supports white branding for STL accounts under Advisors if the Advisors are registered. |
| Manage Clients > Dashboard | Second-level Advisors can access the same Dashboard functions as top-level Advisors. |
STL Master accounts provide Advisors the same access to sub accounts and tools as they have for any other client accounts. |
Additional Resources
Learn About Advisor Portal Client Applications at IBKR Campus