The Interstate Group

What The Interstate Group does

The Interstate Group is a Charlotte, North Carolina-based institutional brokerage and independent research provider operating as a division of NatAlliance Securities, LLC since 1987, with roots dating to 1975. The firm functions as an agency-only broker-dealer — explicitly without proprietary trading, market making, or principal positions — and generates revenue entirely through transaction commissions on equity, options, and program trades routed through multi-venue execution (exchanges, Nasdaq market makers, ECNs, and dark pools). Its core product is the ISA Investment Services Account, a specialized structure that lets professional money managers credit a portion of gross commissions toward the purchase of independent third-party research, with balance carried forward year to year. A parallel Commission Recapture Program serves public and private employee benefit plans by rebating a portion of commissions or offsetting them against custodial, recordkeeping, or third-party administrative services.

The technology stack centers on FIX protocol connectivity for client integration, a library of execution algorithms (Time Slice, Participation, VWAP, TWAP, Liquidity Seeker, Implementation Shortfall), and an SEC-aligned best-execution framework assessing price, market impact, venue quality, and dark-pool performance on every order. Research offerings span equity, fundamental, quantitative, technical, credit, and economic analysis, plus expert networks and market data. The firm is a founding member of the Alliance in Support of Independent Research and has built substantial regulatory expertise around Section 28(e) of the Securities Exchange Act, including Senate Banking Committee testimony by its President in 2004.

The go-to-market is relationship-driven direct sales through four US offices — Charlotte (headquarters and trading), New York (trading desk), Atlanta, and Dallas (sales) — targeting institutional money managers and benefit plans with individually negotiated commission rates. There is no retail channel, no self-service onboarding, and no disclosed technology productization beyond the encrypted ISA Online Statement portal. The firm is privately held, with no external funding rounds and multi-generational family leadership (Grady G. Thomas, Jr. as President; Jay A. Thomas as COO).

Name

The Interstate Group

Legal name

The Interstate Group, a division of NatAlliance Securities, LLC.

Website

https://interstategroup.com

Company type

Private

Founded year

1975

Operating status

Operating

Headcount range

11–50 employees

Short description

The Interstate Group is an agency-only institutional broker-dealer (division of NatAlliance Securities, LLC) that since 1975 has provided independent research, multi-venue equity/options execution, and commission recapture programs to professional money managers and employee benefit plans via its ISA Investment Services Account.

Ownership category

akta.pro rank

Headquarters

HQ city

Charlotte

HQ country

United States

HQ region

North America

Offices4 records

Markets served

GTM type

B2B

Offering type

Services

Cost components

Personnel, Operations, Technology or R&D, Infrastructure, Marketing or Sales

Revenue model

1. Commission-based Execution Services: As an agency-only broker, Interstate generates revenue from commissions on equity, options, and program trades. A portion of gross commission is credited to client ISA accounts for research purchases. Commission rates are negotiated based on anticipated annual volume, average ticket size, and transaction type.
2. ISA Account Management Services: Monthly ISA statements reflecting account summaries, commission summaries, research services credits, and trade activity. Revenue derived from ongoing commission generation through client trading activity managed through these specialized accounts.
3. Commission Recapture Program: Provides public and private employee benefit plans ability to recapture commission dollars for benefit of plan participants. Services include custodial, record-keeping, or third-party administrative services; or rebating a portion of commissions to the plan.

Pricing tiers

Go-to-market motion1 record

Distribution channels1 record

Marketing channels2 records

Core offering

The Interstate Group operates as an agency-only institutional broker-dealer executing equity, options, and program/algorithmic trades on behalf of professional money managers. Through its ISA Investment Services Accounts, the firm channels a portion of gross commissions into client-funded purchases of independent third-party research. It also administers commission recapture programs for public and private employee benefit plans.

Product overview

The Interstate Group offers a unified suite of institutional brokerage and research services, operating as an agency-only broker with no conflicts of interest. The core offering centers on the ISA Investment Services Account, which enables professional money managers to exchange commission dollars for independent research. This is complemented by execution services including Equity Trading, Options Trading, Execution Only, and Program & Algorithm Trading (with strategies like VWAP, TWAP, and Liquidity Seeker). Best Execution Services ensure optimal trade routing across exchanges, ECNs, and dark pools. The Commission Recapture Program allows benefit plans to recapture commissions. All services are supported by Research Services spanning fundamental, quantitative, and technical analysis. The ISA Online Statement provides secure account access for clients.

Differentiator

Problem solved

Functional benefit

Products and services

• ISA Investment Services Account Specialized account for professional money managers that allows them to utilize commission dollars in exchange for investment research services, with a portion of gross commission applied as credit for purchasing research products.
• Equity Trading Agency equity trading services providing institutional clients access to all major exchanges, Nasdaq market makers, and electronic networks, with client anonymity preserved and no proprietary positions held.
• Options Trading Institutional options trading services for portfolio risk adjustment, liquidity seeking, and pricing optimization across electronic networks, exchanges, and off-exchange capital pools.
• Execution Only Execution-only trades at competitively negotiated rates for institutional clients who do not wish to utilize commission dollars for research.
• Program & Algorithm Trading Customized algorithm strategies including Time Slice, Participation, VWAP, TWAP, Liquidity Seeker, and Implementation Shortfall with intelligent execution venue selection based on order flow and trading goals.
• Best Execution Services Trade execution services assessing major exchanges, market makers, ECNs, and dark pools to secure the best available price for clients, compliant with SEC best execution requirements.
• Research Services Independent research products and services including asset allocation, economic analysis, equity analysis, expert networks, fundamental and quantitative research, market data, credit research, portfolio analytics, and technical analysis.
• Commission Recapture Program Program enabling public and private employee benefit plans to recapture commission dollars for plan participants through custodial, record-keeping, or administrative services, or commission rebates.
• ISA Online Statement Secure online statement access for ISA Account holders providing account data as of the prior business day, updated on Tuesday through Saturday schedule.

Named customers3 records

Segments3 records

Ideal customer profiles2 records

Technology focussed Yes

API detail

Has API

No

API docs

API detail

Core technology

AI maturity

App detail

Feature4 records

Partnerships

One partnership is on record.

• Alliance in Support of Independent Researchfounding memberStrategic or Co-development PartnerThe Interstate Group was a founding member of the Alliance in Support of Independent Research. Members share a common interest in fostering a favorable regulatory environment in which independent research services may be furnished to the institutional investment community. The Alliance submitted comments to regulators including IOSCO, Financial Conduct Authority, FINRA, SEC, and DOL on matters affecting independent research and soft dollar arrangements. The Alliance is currently inactive as recent regulations support Independent Research.

Scale indicators3 records

Recent moves2 records

Expansion highlights5 records

Direct peers

• Liquidnet: Agency-only institutional equities trading network with a dark pool and execution algorithms — comparable business model emphasizing best execution without proprietary trading conflicts.
• G.research: Independent institutional research and execution firm focused on long-standing relationships with money managers — closely matches Interstate's independent research proposition.
• Needham & Company: Mid-tier institutional broker-dealer offering agency execution, equity research, and capital markets — overlaps with Interstate's institutional research and trading franchise.
• Instinet: Institutional agency-only broker owned by Nasdaq providing electronic equities trading, algorithms, and liquidity access across global venues — the closest large-scale analog to Interstate's agency execution model.
• Loop Capital Markets: Institutional broker-dealer with agency execution, research, and commission recapture for institutional clients — a comparable mid-tier institutional platform.
• BTIG: Mid-market institutional broker-dealer offering agency execution, research, and commission recapture-style services to asset managers and plan sponsors — closely mirrors Interstate's target client base.
• Cabrera Capital Markets: Institutional broker-dealer offering agency execution and research to money managers and plan sponsors — comparable scale and client base to Interstate.

Broad incumbents

• Robert W. Baird: Larger, diversified mid-market broker-dealer with institutional equity research and execution — competes for the same buy-side research and trading wallet but offers a much broader product set.
• Piper Sandler: Diversified investment bank with institutional equities execution and independent research — comparable institutional research positioning but at much greater scale and broader service offerings.
• Virtu Financial: Large-scale electronic liquidity provider and execution venue; competes for institutional execution flow with sophisticated algorithmic and venue-routing capabilities — sets the technology benchmark smaller agency brokers must match.

Market position

Strengths4 records

Weaknesses5 records

Competitive moat4 records

Key risks7 records

Key highlights6 records

Customer concentration

Revenue estimate

Valuation estimate

Number of profiles

Profiles2 records

Funding overview

Funding rounds

Investors

Funding detail is available on the Subscription and Enterprise plan.Contact sales →

M&A

Investments

M&A and investment is available on the Subscription and Enterprise plan.Contact sales →

Frequently asked questions about The Interstate Group