Frequently Asked Questions

Covestor was acquired by the Interactive Brokers Group in May 2015. In 2017, the company began using a new business name to reflect that it is part of the Interactive Brokers Group family.

Covestor Limited doing business as Interactive Advisors has been registered with the US Securities and Exchange Commission since May 2008. Please see our Informational Brochure (Part 2 of Form ADV) for further information on the Forms and Agreements page. Registration as an investment advisor does not imply a certain level of skill or training.

Yes. You need to be a Registered Investment Advisor (“RIA”) in order to manage a portfolio on our marketplace.

We do not impose limits on the amount of compensation you may earn on our platform but your compensation depends on the amount of assets our clients decide to invest in your portfolio. Portfolio managers determine the annual management fee for the portfolios they offer on our marketplace after consulting with us. Management fees range from 0.10% to 0.75%. We retain just 0.25% of the management fee and pass the rest to the portfolio managers.

Interactive Advisors supports stock trading. We do not offer currency, futures or options trading.

Yes. Non-US citizens can manage portfolios as long as they can open a US-dollar-denominated brokerage account with Interactive Brokers LLC, and they are registered as an investment advisor in the US with either the Securities and Exchange Commission or one or more US state securities regulators and their jurisdiction does not prohibit us from opening an account for them. You will be able to establish positions only in US listed equities (including ADRs) and ETFs.

Portfolio managers may submit fact sheets or other information about their strategy that do not contain performance information, which we will analyze and consider displaying on the portfolio page with appropriate disclaimers. Due to the difficulties associated with meaningfully presenting and explaining historical performance information for portfolios on our platform, we no longer accept or display such information on our website.

To enable us to replicate trades in your brokerage account you must open a managed account with Interactive Brokers LLC and authorize us to trade in it on your behalf. Once you sign up for an account with us, we send you all information needed to open an Interactive Brokers LLC account linked to Interactive Advisors.

US residents can open Interactive Advisors accounts. We also accept residents of Switzerland and India as clients, without active solicitation, subject to local regulatory restrictions. Your country of legal residence is the country where you maintain your permanent home or the country you plan to return to if you live abroad for a short period of time. Advisors registered with the US Securities Commission or a state regulator can establish accounts for clients that are US residents.

Interactive Advisors only charges fees on investments you make in your account. There are no fees on uninvested cash in your account or fees to redeem your investments. Many of the portfolios on our platform invest in ETFs. For these portfolios, in addition to the management fees (Interactive Advisors charges you), the issuer or sponsor of the ETF will also charge you fees and expenses (expense ratio). Neither we nor our affiliated broker-dealer benefit from the fees and expenses charged by the ETF issuer, and for the in-house Interactive Advisors portfolios that we select the ETFs for we try to invest in ETFs with lower fees. Information on ETF fees are disclosed in the prospectus for each ETF. Learn more about Interactive Advisors fees.

To open an Interactive Brokers LLC brokerage account for your Interactive Advisors investments, you need to fund it with a minimum of $100. If you plan to invest in a number of portfolios, or in portfolios that trade heavily, we recommend that you fund the account with a minimum of $25,000 to prevent your account being locked under SEC pattern day trading rules. Otherwise your instructions to us to invest in a portfolio, or divest from a portfolio, may be subject to a delay of up to two trading days after they are received in order to avoid your account being locked under pattern day trading rules.

Yes. You can invest in as many portfolios as you want in a single account. When you sign in to Interactive Advisors you can see your positions, both in aggregate and broken out by investment.

We call this drift. There are a number of causes of drift including risk score, stock exclusions, and cashflow behavior. Drift is typically caused by portfolio managers trading outside of the trading rules, or in securities that are not replicated for clients due to stock restrictions specified by clients. Learn more about performance drift.

Interactive Advisors offers a large selection of portfolios to its clients including a diversified Asset Allocation portfolio. To ensure clients pick suitable investments for their risk profile, Interactive Advisors limits clients’ selection of portfolios using the following two criteria:

• Clients need to have a client account risk score that is greater than or equal to the portfolio they want to invest in.
• Clients need to have enough funds available in their Interactive Advisors-linked brokerage account to invest at least the minimum investment amount, which varies by portfolio and is specified on each portfolio page.

Some Portfolio Managers have opted for accounts with extended trading capabilities (e.g. immediate settlement of trades etc.). If your account does not possess the same abilities, Interactive Advisors would not be able to replicate the Portfolio Manager's trades in your account. This is why some portfolios could be unavailable to you. For further details on account types, please contact us.

Portfolios are managed either by our Chief Investment Officer and his Investment Management team or by carefully selected Registered Investment Advisors. We also offer portfolios we oversee that are built on data provided by industry leaders, such as FTSE Russell, Legg Mason, State Street Global Advisors, Global X and Wisdom Tree.

Stocks cannot be traded in fractions on public exchanges, which means that you need a counterparty willing to transact with you in fractional shares.

Harvesting a tax loss is the action of selling an asset in your portfolio at a loss to offset a gain, which can potentially reduce your year-end tax liability. The asset sold is replaced with a different asset, which provides similar exposure to your initial position. This value-add strategy of selling assets at a loss to harvest tax losses will be implemented algorithmically in your IA Asset Allocation portfolio if you choose to activate this algorithm for your account. By activating the tax loss harvesting functionality for your account, you acknowledge you have received and reviewed the tax-loss harvesting disclosure picture_as_pdf

Interactive Advisors cannot provide tax advice or prepare tax documents for you. Please consult an accountant or tax attorney to determine the tax-related obligations associated with investing in these portfolios. Please note that Interactive Brokers LLC provides certain tools to assist you with your tax filings, but these tools may only be able to support a limited number of trades.

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