Interactive Brokers Group (NASDAQ:IBKR) founder and Chairman Thomas Peterffy told investors at Bank of America’s 34th Annual Financial Services Conference that he expects a generally strong economic backdrop to persist, with only limited potential for short-term interest-rate cuts. He also outlined priorities centered on best execution, expanding global market access, and building out newer initiatives such as prediction markets and crypto capabilities—while emphasizing that the firm remains focused on organic growth rather than acquisitions.
Macro view and rate sensitivity
Peterffy said he believes “the economy is doing great” despite mixed signals in public narratives, and he does not expect interest rates to come down by much. He suggested a possible decline of “at most half a point,” adding that a 0.5 percentage-point drop in short-end rates would reduce Interactive Brokers’ net income by about $200 million for the year, which he characterized as not a huge impact. He noted the discussion was focused on the short end of the curve, not the long end.
Strategic priorities: best execution and client economics
Peterffy reiterated that Interactive Brokers does not sell order flow and does not trade its own account except in limited ways tied to facilitating services such as fractional shares or overnight orders, or when it can provide a better price than other available options. He also highlighted client-to-client crossing as a way to improve execution quality, particularly as volumes grow and as clients use limit orders more often.
He described several elements of the firm’s client value proposition, including:
- Paying interest on client cash holdings at 50 basis points under the Fed funds rate
- Paying interest on short-sale proceeds
- Maintaining low margin rates
- Lending fully paid shares and sharing interest with clients
- Continuing to build research and trading tools and adding products and venues
Account growth and client balances
In response to questions about whether account growth can remain elevated, Peterffy said he sees “no problem” maintaining account growth at around current levels, after the moderator noted growth had accelerated to around 30% and at times above 30%.
Addressing the idea that new accounts may be smaller and less active, Peterffy pointed to the company’s history of average account values. He said that over the last 10 years, the mean liquidating value of a customer account has fluctuated between $140,000 and $270,000, and is currently about $180,000. If new accounts were consistently smaller, he argued, the mean would be continuously falling, which he said has not occurred.
Regulation, global flows, prediction markets, and crypto
On the U.S. regulatory outlook, Peterffy said the industry “may be near passage of the Clarity Act this year.” He also described SEC Chairman Atkins’ approach as letting free markets and competition handle best execution, which he said “fits us perfectly.” He added that more detailed Rule 605 reporting “may help” IBKR, while noting his view that marking customer trades to market would provide more transparency, though he does not expect that to happen.
Internationally, Peterffy said his read of EU regulation is that it is largely focused on ESG and more on public companies than on brokers.
On asset allocation trends among non-U.S. clients amid a weaker U.S. dollar, Peterffy said stock holdings have not changed much and remain concentrated in large U.S. stocks, but he has seen movement in cash holdings away from dollars and “mostly” into euros in recent months.
Peterffy also discussed ForecastEx, calling himself “extremely bullish” on prediction markets and describing them as potentially the biggest development in the business in a century. He said sports betting is “a distraction,” though he left the door open to potential entry later if legal and regulatory friction eases. He argued that prediction markets will require clearer regulatory distinctions between securities and commodities, using examples that contrasted a company’s stock (a security) with questions about company-specific operating metrics (which he suggested raise classification questions).
On crypto, Peterffy said Interactive Brokers has partnered with Paxos and Zero Hash because crypto requires “dedicated expertise and institutional-grade controls,” adding that IBKR owns 30% of Zero Hash. He said crypto transfers in and out of the platform were expected to go live “within the next couple of weeks.” He also said the firm’s strategy is not to offer every new token or meme coin, but to provide “measured exposure” to established cryptocurrencies. Peterffy framed the initiative primarily as a way for existing clients to gain crypto exposure without going elsewhere, while also describing efforts to build a “seamless bridge between traditional and digital finance,” including account funding via stablecoins that will support crypto asset transfers.
Capital, M&A, margins, culture, and risk
On capital management, Peterffy indicated he expects the balance sheet to “keep…grow[ing],” offering little indication of a shift toward buybacks or other large-scale uses of capital. Discussing share float, he said he does not feel a need to sell additional stock, noting float increases modestly over time through employee bonus shares and potential selling by holders as prices rise.
Regarding mergers and acquisitions, Peterffy said the company is busy building organically and has repeatedly concluded it is better to “stick with what we know best” rather than pursue less well-defined external opportunities.
Peterffy also addressed profitability, saying he does not expect operating margins to rise above roughly 80% and suggested the firm “should probably start spending a little bit more money on new products and more white glove service.” While Interactive Brokers is known for its technology, Peterffy said the firm’s major advantage today is “the culture,” describing a long-tenured workforce that builds expertise and maintains responsibility for what it creates.
On leverage trends, Peterffy said margin loans have run at roughly 10% to 12% of client assets, adding that he becomes nervous when margin loans rise too quickly. He concluded by reiterating the firm’s intention to expand access to more exchanges and products globally, stating it is important that customers can access “all the products in the world that matter.”
About Interactive Brokers Group (NASDAQ:IBKR)
Interactive Brokers Group, Inc (NASDAQ: IBKR) is a global electronic brokerage holding company that provides trading, clearing and custody services to retail traders, institutional investors, proprietary trading groups and financial advisors. The firm offers direct access to a wide range of asset classes, including equities, options, futures, foreign exchange, bonds and exchange-traded funds across many international markets. Interactive Brokers emphasizes electronic order execution, automated trading and low transaction costs as core differentiators for its clients.
Its product suite centers on advanced trading platforms and infrastructure.
