I can see the benefit for those wanting to properly balance/re-balance portfolios of all account sizes. This is optimal in Friends & Family accounts, like IB has, or even financial advisors who have some smaller accounts. If you create an algo that can generate long signals on 20 stocks, say SPY’s top 20, then an account is mandated to have around a 10k minimum to even get a position of AMZN/GOOG along with equally weighting smaller prices, like AAPL at 132.
Having these small accounts often leads to other, bigger accounts. The FA’s with the most AUM I know are always willing to take on small accounts for this purpose.
@clumma I disagree that it attracts non-serious traders. I agree Alpaca can’t be building features for every 1k account that comes on-board, but I don’t often find API capable traders who don’t have the technical sophistication to be serious; just that they may still be working to accumulate wealth.
Here is Alpaca’s own outreach regarding hedge funds and why Alpaca is beneficial for them. It isn’t often someone is a fully registered hedge fund from day 1. A common process to becoming a fund is:
- Personal success ->
- Small family/friends success ->
- Financial advisor success ->
- Dedication to a full hedge fund
This is what IB has in place for the up-and-comers. Steps 1 & 2 require the usage of smaller accounts.
P.S. is there a forum/way for Family & Friends accounts? I see the closed ticket for multiple sub-accounts for paper trading, but nothing explicit on a master account.