Interactive Brokers (IBKR) Q3 2016 Earnings Call

Interactive Brokers (IBKR) CEO Thomas Petterfly said the less than normal volatility towards the end of summer hurt results

“This summer, specifically July and August, were dismally slow months. Intraday volatility was practically zero. We saw the market open and find its level for the day within the first few minutes of trading and then it would just sit there until the close. Looking at my screen, I often felt that I must have lost connection. But no, the market just stopped moving.”

They are starting to gain larger accounts

“Returning to our brokerage business, while commissions were low in July and August for the quarter, our number of accounts were up at an annualized rate of 16% and customer assets rose by an unprecedented annualized rate of 48%. This is due to our ability to attract larger accounts mostly comprised of larger accounts of the four major online brokers and the smaller prime brokerage accounts of the big banks.”

Interactive Brokers (IBKR) CEO Thomas Petterfly believes their low cost operating model will help them benefit as the industry moves to lower costs as a result of the Department of Labor regulations which come into effect in April

“So, we run a very pristine shop and we don’t take anything from customers other than commissions and we tell them exactly what it is and it’s much lower than anybody else you would compare us to. So, we think that especially from the point of view of registered advisers, it is going to be helpful for them to cope with that rule when they bring their accounts over on to our platform.”