Why Is Trading So Complicated?

[undercover]

Why do so many banks and trading platforms require you to have experience investing in stocks and companies before you can open an account with them?

I tried signing up for an account with IBKR, but I had to give up, there were just too many questions I couldn’t answer!

I can trade securities through my local bank, even internationally, and it works just fine. Plus, I don’t have to go through a bunch of crazy questions first.

 

[Sols]

Because they are required by consumer protection laws to put up these barriers, to keep people from losing money on financial products that they don't understand.

Your bank might not be subject to the same consumer protection laws as a non-bank broker/trading platform. Another possibility is that your bank doesn't offer more complex products and stick to the basics only.

 

[daniels27]

The usual game:

• Banks wanted revenue
• Managers were incentivised to sell investment products (mainly their own funds) to clients (mainly today who have no clue but believe in prospected returns)
• Clients lost their money
• Clients sued and won

Now you are paying the bill with your time as you have to fill questionnaires for nothing.

 

[JackAlabama]

Why do so many banks and trading platforms require you to have experience investing in stocks and companies before you can open an account with them?

I tried signing up for an account with IBKR, but I had to give up, there were just too many questions I couldn’t answer!

I can trade securities through my local bank, even internationally, and it works just fine. Plus, I don’t have to go through a bunch of crazy questions first.

well maybe look for some execution only brokers where you can with one click just forfeit their oversight (and hence take on the complete risk yourself).
Not every broker offers this and in order to play in their turf you need to follow what they require.

 

[undercover]

Not every broker offers this and in order to play in their turf you need to follow what they require.

I'm well aware of it, but why all these questions and why refuse people to use their platform for investments if you could just put up a message that trading is on your own risk blah, blah blah... like kraken has on the top of their website when you login !?

 

[Sols]

I'm well aware of it, but why all these questions and why refuse people to use their platform for investments if you could just put up a message that trading is on your own risk blah, blah blah... like kraken has on the top of their website when you login !?

Because law.

You'll start seeing it on Kraken and other VASPs as laws and regulations catch up.

 

[JohnnyDoe]

If you can’t answer IBKR’s questions you should not use this platform. You risk to hurt yourself.
Either study the subject or buy some mutual funds through your bank.
Of course once you have acquired a good level of knowledge, you can always ask GPT to answer all questions if you are in a hurry