IG, one of the best-known spreadbetting and CFD providers, has branched out with a new execution-only stockbroking service. At present, the firm offers dealing in stocks listed in the UK, USA, Germany, Ireland and the Netherlands, with other international markets likely to be added in the future.
I’ve added a page with details of charges to the broker directory and also included it in the execution-only and international broker comparison tables. Overall, it appears to be a competitively priced service with a handful of particularly notable points:
- IG offers the choice of Direct Market Access (DMA) for UK equities, as well as international markets. While DMA is common in many countries, it’s not widely available to retail investors in the UK, since British brokers tend to use a market maker-based system instead. This will be most relevant to active traders.
- The currency conversion commission of 0.3% is much lower than most other providers in the UK market. Currency commissions are a large and easily overlooked (well-hidden in the case of some brokers) cost of dealing in overseas markets, with some firms charging up to 2%. These costs are unjustifiable and it’s encouraging to see a new entrant to the market deciding to compete on this from the outset.
- Together with the option of a ISA with no annual fee, this should make IG a particularly competitive choice for holding international stocks in a tax wrapper. HMRC rules mean that it’s not possible to hold foreign currency in an ISA, so capital gains and dividends must be converted back into sterling each time. This makes high FX charges particularly onerous in this type of account.
IG are running a temporary promotional offer for new clients of one month’s commission-free online trading plus a discounted rate of £6 per trade on UK stocks thereafter until 31st December 2014. This could be a good deal for investors who want to set up a diversified portfolio quickly and cheaply.
Since IG’s stockbroking service is a new launch, I haven’t yet received any comments on it from readers. If you’re an early user and would like to provide some feedback, please leave a comment below or send me an email via the contact form.