Buy and sell US shares commission-free, and UK shares for £3 per trade with IG
- Low dealing costs
- Huge choice of investments
- Out of hours US share dealing
- Dedicated support
- Capital at risk, investments may fall
IG review | Smart portfolio, share dealing and ISA explained
We take a look at the investment platform to see what you can do with it.
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What's in this guide?
What is IG?
IG is not really for novices. It’s got incredible depth in its web app and platform, which could be a bit overwhelming if you’re new to investing. IG has been listed as one of our best trading apps of 2020.
That being said, IG does offer hand-holding “Smart Portfolios” for those who would prefer to have their investments managed for them.
(Word to the wise – steer clear of the spread betting and CFD options IG is offering if you’re new to investing! This is risky territory.)
IG offers three product choices:
- IG General Investment
- IG Smart Portfolio ISA
- IG Smart Portfolio SIPP
Once you’ve decided on the product, IG then offers two main ways to invest:
- Share Dealing. You make your own investment decisions.
- Smart Portfolios. Lets you pick a ready-made portfolio which is managed on your behalf.
IG Share Dealing
If you opt for IG Share Dealing you can buy and sell shares, funds and investment trusts, with over 10,000 to choose from.
The prices are pretty low. US shares have no commission, while UK shares can cost as little as £3 if you trade three or more times in the previous month (£8 usually). You can trade outside of the US stock market’s trading house as well.
What can I invest in with IG Share Dealing?
- Companies. There are thousands of different companies that you can buy shares in.
- Exchange traded funds (ETFs). IG has 2,000 eligible ETFs that you can invest in to allow you to get exposure to the UK equity market from just 0.4%. IG has an ETF screener on its website, which lets you track sectors and find what you are looking for. If you’re not sure what an ETF is, we have a handy guide.
- Investment trusts. IG has investment trusts to give you exposure to a wide range of markets.
IG Smart Portfolios
If you choose IG Smart Portfolios, you can invest in a managed portfolio that matches your attitude to risk. You answer a set of questions about your knowledge and experience of investing and your investment goals. You are matched to a portfolio based on your answers to these questions.
Once you have taken the questionnaire, IG will ask about how much you intend to invest and how long you want to invest it for. It also asks how much money you have set aside as an emergency fund and won’t match you to a portfolio if you have less than three months worth.
IG Smart Portfolios vs IG Share Dealing: Which should I go for?
If you’re new to investing, you might be wondering what the difference is between the two types of investment with IG.
It depends on what you want to do. People would usually choose IG Share Dealing if they wanted to buy and sell shares in companies and are happy to spend time making adjustments on their investments. You don’t have to be an experienced investor to go for this option, but you’re much more likely to be one.
Meanwhile, IG’s “Smart Portfolios” offer some help in your investments by matching you up to a pre-made portfolio. There’s a risk questionnaire that you can fill out to find out more about your risk appetite and to help IG understand what you want to get out of your investments. IG forms your portfolio on your behalf with this information.
IG ISAs
IG stocks and shares ISA are available via a share dealing account or a ready-made IG Smart Portfolio.
As with all ISAs, you have an allowance for the tax year which you can use to invest tax-free. The allowance for the 2019/2020 tax year is £20,000. This means that you can invest up to £20,000 tax-free.
Features of IG’s ISA include:
- Flexibility. You can withdraw funds without reducing your ISA allowance.
- Free to open. There aren’t any transfer or exit fees either.
- Wide choice of investments. Choose from over 12,000 global stocks and exchange traded funds (ETFs).
- No custody fee. Buy or sell trades three or more times in a quarter and IG will waive the custody fee (usually £24).
IG SIPPs
IG’s SIPP allows you to invest in your future with tax benefits. Your pension is locked until you turn 55.
Features of IG’s Share Dealing SIPP include:
- Invest up to £40,000 in the 2019/2020 tax year with at least 20% tax relief on your contributions and no capital gains or income tax to pay.
- Invest in domestic and international shares and ETFs.
- Transfer one or more pensions from other pension providers.
- IG’s technology helps you find lower prices when buying shares.
If you want to invest for your future but don’t want to play around with share dealing, IG offers a Smart Portfolio SIPP.
Features of the IG Smart Portfolio SIPP include:
- Invest up to £40,000 with at least 20% tax relief on your contributions.
- Get diversified global exposure.
- Benefit from regular adjustments made by BlackRock.
- Administered by James Hay.
- Portfolio is matched to your risk profile.
IG General Investment
You can open a General Investment account with IG that allows you to make taxable investments outside of your ISA allowance. People usually go for this option if they’ve used up their annual ISA allowance as they may need to pay capital gains tax on their profits.
Does IG have an app?
You can use the IG app or the website to manage everything – check stock performance, set alerts and find out about significant events when they happen. IG has made it customisable to suit your preferences and has integrated a live news and Twitter feed to keep you up to date with the stock market.
IG fees
The fees you are charged to use IG depend on whether you choose to use IG Smart Portfolios or IG Share Dealing. The additional fees, such as fund costs, transaction costs and foreign exchange costs are explained below:
Management fee
There are management fees on IG Smart Portfolios, IG ISAs and IG SIPPs. These costs are for:
- Portfolio management
- Portfolio rebalancing
- Customer service
- Fractional dealing technology
Fund costs
These are the costs to trade with exchange traded funds (ETFs). ETFs have an ongoing charge, which IG deducts from the value of your fund. This isn’t a set amount, but usually averages around 0.15%.
Transaction costs
Transaction costs cover the difference in price when IG buy and sell the funds to rebalance your portfolio. It estimates this to be 0.07%.
Foreign exchange fees
When converting dividends paid in foreign currency back into GBP, IG charges a 0.50% foreign exchange fees.
IG Smart Portfolio Fees
| Investment amount | IG Management Fee | Average fund costs | Transaction costs | Total (annual) |
|---|---|---|---|---|
| Up to £50,000 | 0.50% | 0.15% | 0.07% | 0.72% |
| Over £50,000 | Free | 0.15% | 0.07% | 0.22% |
IG Share trading fees
Cost of shares
| Type of share | Standard | 3+ trades per month |
|---|---|---|
| US shares | £10 | Free |
| UK shares | £8 | Free |
Other fees
| Fee description | Fee |
|---|---|
| Quarterly account fee | £24 |
| Foreign exchange conversion fee | 0.5% |
| Commission on trades placed over the phone | £40 |
Is IG safe?
IG is regulated by the Financial Conduct Authority (FCA) and your investments are covered by the Financial Services Compensation Scheme (FSCS), so if IG were to go bust, you are covered up to £85,000. IG is a trusted provider and is an established FTSE250 company that’s been running for 45 years.
Pros and cons of IG
Pros
- Suits beginner and experienced investors
- Low fees
- Mobile app lets you manage your investments on the go
Cons
- Opening your account is a slow process
- Fees charged for inactivity
Our verdict
IG has a simple structure and caters for experienced investors and those with less experience that want a bit of help in managing their portfolios. The fees are relatively low, depending on what you plan to do. For share dealing, you pay a set amount when you buy and sell and with the portfolios, you pay a percentage based on how much you are investing.
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Updated March 28th, 2020
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Capital is at risk.
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