IG Broker Review

Prices

Globally, IG's cost (spreads and commissions as well as fees) is very competitive. This also holds true for U.S. clients.

Spread is how IG makes its money. This includes customer trades that "cross" IG's bid/ask spread. CFD traders will be subject to a commission. This is an additional charge on either side of market spread. Every trade in share-CFDs is subject to a commission. IG (UK) also charges a premium to guarantee stop loss orders. This applies only if the order is triggered. There are additional charges and third-party fees that are clearly documented on their U.K. website.

The minimum spread for majors on IG's U.S platforms is 0.8 pips. The advertised average spread ranges from 0.9 (EUR/USD and USD/JPY to 5.4 (GBP/CAD).

Swap fees will be applied to positions held overnight. Clients may also be subject to currency conversion costs if they trade outside of the base currency. This is standard in FX. Inactivity fees of $12 per month are charged if no trading activity has occurred for more than 24 months. For wire withdrawals, there is a $15 charge. IG's website provides a clear and comprehensive explanation of forex trading costs.

250 units in the base currency are the minimum account deposit globally. This translates into $250 for U.S accounts. According to CFTC regulations the maximum leverage available to U.S clients is 50 to 1. Rebates are available to traders who meet certain volume thresholds. There are three levels of rebates available. They range from 5% for minimum $100 million in monthly volume to 15% for $500+ millions.

Trade Experience

Globally, IG offers a range of platforms and API interfaces. The company's web-based offering is customizable and easy for users to use. This simplified trading platform is stable, accessible from any browser and simple to use. However, IG recommends Google Chrome. It is simple, especially in the U.S. version. This simplicity belies its functionality. It doesn't have all the bells, whistles and features that other interfaces offer. However, what it does lack in quantity, makes up for in quality. This is in addition to the industry-standard MT4 platform and functional mobile or tablet applications. This makes up IG's online offering for the U.S. market.

U.K. clients have the same access as their U.S counterparts. They can also upgrade to ProRealTime, a downloadable, fee-based advanced charting platform. This is free provided that certain trading activity requirements are met. Clients with technical knowledge can also attach their own software to the interface.

IG (UK) offers clients with larger accounts the ability to trade CFD shares or forex through L2 Dealer. This provides direct market access (DMA), which bypasses IG’s dealing desk. Clients must have ESMA professional designation to use the Forex Direct service. This service is free of charge, except for exchange fees.

The basic risk management tools offered by the web-based IG (U.S.), platform include price alerts, stop losses, and price alerts. Clients can also stream Reuters news and split charts into multiple times frames to improve their trading experience. The platform integrates Autochartist, which is a third-party signal provider.

There are three order types available on the interface. You can attach "take profit" or "stop loss" orders. Surprisingly, neither "trailing stoploss" nor "guaranteed loss" orders can be placed on web-based platforms.

• Market - This is the simplest way for a trader to indicate that they want their request to be executed at market rates.

• Limit - An order that is pending and the entry is at a predetermined level below or above the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.

• Stop - An order that is pending and the entry is at a predetermined level above or below the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.

IG Web Platform.

IG offers home-developed mobile apps for Android and iOS that can be downloaded on tablets. The basic features include price alerts and customized watchlists. Although the indicator list is sufficient, it has been removed from the menu structure to make it more accessible. Although the Trade menu does not offer advanced conditional orders, U.K. clients have the ability to place guaranteed stop-loss orders. They lack customization, but offer Face & Touch ID security.

The IG Community site offers active forums as well as numerous trade picks via blog entries and forum entries. There are thousands of tweets by @IGSquawk from IG dealers, sharing news and client sentiment. The broker site does not contain any client positioning data, and there is no dedicated social platform. However, IG Client Sentiment on DailyFX.Com offers useful forex positioning data that is updated in real time. Clients would benefit if this information were integrated into broker sites.

A wide range of offerings

Globally, IG maintains a vast catalog with over 17,000+ markets. Clients will not have any difficulty finding options and futures on many instruments. IG (U.K.), offers:

• Forex

• Indices

• Shares

• Commodities

• Cryptocurrencies

• Bonds

• ETFs

• There are many options

• Industries

• Interest rates

The U.S. product line caters to spot forex trading of more than 80 pairs. These are sorted under the following categories:

• Majors

• Minors

• Australasian

• Scandinavian

• Exotic

• Emerging Markets

IG (UK) offers a wide range of institutional and professional services that are well above industry standards. IG Smart Portfolios allows accounts of all levels to invest long-term through a basket that includes retirement and savings programs, as well as low cost ETFs.

Customer Service

IG customer support is available via a toll-free number (U.K.) from 8 a.m. Saturday through 10 p.m. Friday. Potential and active clients can speak to a representative of the company via live chat, which is available whenever the platform allows. Contact options include email, social media and a detailed FAQ. A well-documented customer grievance procedure can help in grievance resolution if all else fails. Online customer support is available to clients in many languages. This increases IG's appeal and makes it more appealing to a wider client base. Satellite offices are also available to assist licensed operations in different regions.

IG (U.S.A.) provides customer support via phone (24/5), email (or Twitter client help). The FAQs and support pages on the website are organized well and provide valuable information.

IG Customer Service

Education

The educational tools offered by IG are better than any other online broker that "Broker Review", has reviewed. The impressive "IG Academy" will quickly get new traders up to speed, while seasoned practitioners will find the advanced trading strategy articles very useful. There are many webinars that cover "topics ranging from platform walk-throughs to upcoming trade opportunities."

IG Education.

The course at IG Academy is intended to provide material for traders at all levels. The IG Academy mobile app allows clients to access articles and courses. DailyFX.com was purchased by IG in 2016. It's odd that it is not integrated with the broker website, other than the live seminar section. Prospective clients may not be aware of this great resource. A comprehensive glossary and a search function that is efficient enhance the value of IG's educational portfolio.

Portfolio Analysis

Although the order interface for IG's U.S.-based web platform is simple and intuitive, it can best be described to be mediocre. The order ticket can only be used to initiate basic market and pending orders. There are provisions for stop-loss or take-profit orders. There are no guaranteed stop loss or trailing stop loss orders. Before trade execution, "Pip Value", notional trade size and margin requirements, stop loss, take-profit, and stop-loss amounts are displayed.

Clients can choose the size of trades. These are denominated in increments equal to 100,000 of the base currency, which retail FX terminology refers to as a standard lot. The default currency for IG's American order tickets is the U.S. Dollar, while the U.K. ticket offers the option of choosing between the U.S., U.K., Japanese yen, British pound and the U.S. dollars. Although the U.K. site offers a guaranteed stop loss option, there is no trailing stop-loss order. This is quite odd.

The broker's "My IG” page provides basic information on client activity such as balances and transaction activity. Profit/loss breakdowns can also be found. IG (USA) is currently testing a built-in tool called "Trade Analytics" that allows you to analyze trading activity. However, it is only available for live accounts. This tool allows clients to drill down beyond the basics of trading activity. The broker does NOT offer a trading journal or tax accounting tools.

Investigate Amenities

It is notable that IG has a commitment to providing clients with accurate and informative research. Both those who like to read and those who prefer to listen or view are able to find something. One criticism is that links to the U.S. site lead to the U.K. site, which contains information that is inaccurate for U.S. clients. For example, advertising "guaranteed stops losses".

IG Research.

IG owns the DailyFX website. This provides news, research and education. There are also in-house analysts and hundreds of market topics. In-house news covers all major currency pairs. Numerous live webinars help you to improve your trading skills, highlight important events, and identify news triggers. The Trading Strategies section provides short-term buy/sell signals, analyst picks and pivot points as well as technical data.

Security

IG US LLC is a registered RFED at the CFTC. It is also a member the NFA (#0509630). IG Markets Ltd, (#195355), and IG Index Ltd are also authorized and regulated in the U.K. by ASIC in Australia. It is also listed on the U.K.'s FTSE 250. Additionally, it has signed up to the "FX Global Code of Conduct," which provides a set of guidelines that promote good market practice.

IG (U.K.), also follows the FCA client money rules to ensure client funds do not mix with corporate funds. Client assets are protected in the event of IG becoming insolvent by keeping them in separate accounts at regulated banks. Additional asset protection is available through the Financial Services Compensation Scheme, (FSCS) which can provide up to PS85,000.

IG (UK) offers clients a guarantee that they won't lose more than what they have in their accounts through the negative balance protection rules that were mandated by ESMA and that came into effect in 2018. Also, guaranteed stop loss orders can be offered to protect against potentially catastrophic losses in extreme market conditions such as the 2015 Swiss Franc currency shock.

IG (U.S.A) does not offer negative balance protection or guaranteed stop loss orders. FDIC and SIPC do not insure client funds.

Software security at IG is up to par with industry standards. The user will be log out of both web-based and mobile apps for inactivity.

A counter-party dealing desk is provided by the broker for clients with large accounts who want to trade directly with inter-bank systems through a dedicated platform.

Note about dealing desks. Dealing desks have been stigmatized over the evolution of online retail brokerage. This is likely due to the inherent conflict-of-interest issues. Beginners believe that the dealing desk is "trading against" them, and their poor performance. Although there are instances where this has occurred, it is rare and not part of any successful business model.

The firm's dealing desks are staffed to ensure that the platform(s) works properly. Without it, revenue generation and profitability will suffer. Clients should be able to manage trades even if the online interface is not working properly. Apart from being regulated and licensed by respected entities, an online broker can be legitimized through a dealing desk.

Verdict

IG is a great fit for small traders as well as market professionals. It offers competitive spreads, thousands trading instruments and a state of the art news, research and education portal. Clients have the option to choose from many platforms and can easily upgrade their accounts as they build equity. Direct market access (DMA), which bypasses the deal desk, is a great benefit for professionals.

Being NFA/CFTC/FCA regulated gives IG credibility and reinforces IG’s commitment to being a global brokerage. The inconsistency in offering guaranteed stop loss protection or negative balance protection in the U.S. is somewhat disconcerting. Both the former give clients security and the latter provides a risk management tool for volatile markets.

Overall, IG's track record is one of high quality and reliability. Their entry into the U.S. forex broker market should be a blessing for American customers.