Interactive Brokers - all eggs in one basket?

In the end everyone has their own opinion on security. Security can mean different things for everyone

Account security -: availability of 2FA etc

Investor security -: (in case of brokerage bankruptcy)

Psychological security-: Brick and mortar / personal vs. Online only

Geopolitical security -: Swiss broker vs International

If you can rank IB, SQ, Swiss banks, Swiss Fintech, Saxo and Cornertrader on all of the above , everyone will come to different conclusion. Only a real finance + cybersecurity professional might be able to an objective comparison

What I have realized over the years is that it’s very easy to go down the rabbit hole and find issues with everything. What normally helps is data to differentiate between Anecdotes and larger picture.

Bottom line is following

  • Swiss banks (UBS, ZKB, etc) have very high AUM , so if you are with them, you are going to be fine
  • IB is one of the largest brokers , you will also be fine
  • SQ is one of the best Swiss brokers , I don’t think you will have problems
  • Saxo is one of the top European brokers with Swiss license , it is also going to work out fine
  • same might be true for others too

There is always a cost to get added level of „security „ and comfort level changes with growth in wealth. When someone is new, 200 CHF per year custody looks ridiculous, but when someone has 5 million, maybe they will also be fine with 0.3% custody fees.

I just think we should always be objective in our information sharing because it can put someone else down the rabbit hole of over analyis. I also think I need to be careful myself.

What might help is diversification of brokerages and banks. In the end it’s all about money. So if someone has spread their money across 4-5 companies (including brokerage + banks+ deposits) , it is more than enough.

10 Likes