IG is a CFD broker, an ISA and a pension provider.
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Capital at risk, investments may fall
IG has been around for a while – since 1974 to be exact and has almost 200,000 clients. It’s a CFD broker, an ISA provider and a pension provider all rolled into one.
Despite what it says on the tin, 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.
That being said, IG does offer hand-holding “Smart Portfolios” for those who would prefer to have their investments managed for them. IG has been listed as one of our best trading apps of 2020.
(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. If you’re an experienced investor and came here to read about these, we’ve covered them below.)
IG offers three product choices:
Once you’ve decided on the product, IG then offers two main ways to invest:
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 hours as well.
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 Portfolio review
IG’s Smart Portfolios are available if you don’t fancy managing your own portfolio, such as if you’re a beginner or not very in-the-know about investing. It gives some helpful insight into what you are invested in, sorted by asset class, sector and location, and lets you make decisions on your attitude to risk and your financial goals.
The mobile app can give you some information on your investments, but don’t tend to be as helpful as the browser view for those with a Smart Portfolio, as it appears to have been designed with share dealing in mind.
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 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:
IG ISA review
On the whole, IG’s ISA is a strong competitor. It offers exactly what most people are looking for in am ISA, but only if you plan to make several trades each quarter. Its main drawback is the custody fee, which is only waived if you make more than three trades in a quarter. It could set you back £96 per year, which is considered to be pretty pricey compared with other ISAs.
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:
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:
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.
Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.You can trade contracts for difference (CFDs) with IG. A fair warning, in case you didn’t see it earlier: CFDs are complicated and risky, so aren’t really suitable for beginners. We won’t be offended if you skip this section, honestly.
Now we’ve got that out of the way. The CFD section of IG’s site is a bit overwhelming with all the blue and red flashing as the buy/sell prices change, but it’s really just a sign of how comprehensive it is in this area. It’s got loads of live data and newsfeeds to keep you up to date on what’s going on in the market to help you make better decisions.
You can trade on indices, foreign exchange (forex), shares and commodities with IG and never have to own the underlying asset. Main benefits include:
The only direct charge you really need to worry about is the spread (a commission in the case of share CFDs). IG charges its own spread on top of the market spread as its fee for the trade.
Ultimately, this depends on market conditions. You can see the spread, as it’s the difference between the bid and ask prices.
Overnight funding
This is the charge for keeping your CFD positions past 10pm UK time. This charge is added to your account as an interest adjustment. You don’t pay overnight funding for futures or forwards as it’s built into the spread.
Guaranteed stop premiums
You can attach guaranteed stops to your position to help protect your investments. IG charges a fee if it is triggered. This is called the premium.
Extra services
There are some extra services that IG charges you for if you use them. These are listed below and you can find details on the website.
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.
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 in more detail below.
| 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% |
Cost of shares
| Type of share | Standard | 3+ trades per month |
|---|---|---|
| US shares | £10 | Free |
| UK shares | £8 | Free |
Explanation of what each fee is for
Other fees
| Fee description | Fee |
|---|---|
| Quarterly account fee | £24 |
| Foreign exchange conversion fee | 0.5% |
| Commission on trades placed over the phone | £40 |
Demo accounts allow you to get an idea of share trading before you start investing real money. This is often popular with beginner investors who are hesitant while they don’t know exactly how it works.
Annoyingly, IG’s demo account is only available for its spread betting and CFD trading services, which is pretty complicated territory. You can try it out with £10,000 in virtual funds to see how it works and get an idea of what the platform allows you to do. We liked that the platform is customisable. It allows you to choose your layout and watch markets that you’re interested in.
The charts are helpful, as they give detailed information on the movements. That is, if you know how to read them. This is where IG Academy can come in handy, as it gives you the opportunity to learn how they work. We briefly cover IG Academy below.
If you’re planning to stay away from spread betting and CFDs (a wise choice if you’re a beginner!) then IGs demo account won’t be of any use to you. A nice alternative is Trading 212‘s demo account, which lets you try out share trading with £50,000 in virtual money. There’s no requirement to use Trading 212 for the real thing, so you’re more than welcome to come back and use IG when trading in real life, if you wanted to.
“IG Academy” is IG’s educational offering. It has online trading courses, webinars and seminars to give you a little leg-up in investments. This is handy, as investing can be complicated, especially when you have as many options available as IG offers.
The online trading courses have videos and interactive quizzes and exercises. There are frequent live sessions, which are webinars where IG’s experts share their knowledge and insight. This gives you the chance to ask questions about share trading.
IG Academy has its own app, which means that you can learn about share trading and investing on the go. It’s pretty simple to use and gives you info on how long each section will take.
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.
IG has mostly positive reviews online, particularly for its app.
The wealth of information and ease of use received praise from customers, whereas the app’s interface and the customer support levels left some unimpressed.
Here are the company’s scores across a number of review platforms (updated on 28 May 2020):
| Trustpilot | Google Play | Apple App Store |
|---|---|---|
★★★★★ 3.5 out of 5 | ★★★★★ 4 out of 5 | ★★★★★ 4.6 out of 5 |
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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