I have been buying and selling CFDs in Australia since they were initially launched in 2003. Over this period I have traded with all of the main CFD providers in Australia first hand. When speaking to groups of traders at trading expos and seminars all-around Australia I regularly get asked who’s the best CFD provider? I wrote this review to help answer this million dollar question.
This review covers all the main CFD providers in Australia that I have dealt with first hand, whilst writing this review I took into consideration four main points which as an expert trader I believe are the critical requirements to think about when deciding on a CFD provider, these are:
1. Customer Service
2. Platform stability and ease of use
3. Product range
4. Pricing
You must to note that there are CFD provider evaluations performed by a number of websites and magazines in Australia many of which are biased with the winners frequently being selected by journalists not traders and determined by the amount of cash spent on advertising in the magazine or on the website that carried out the review. Only real traders with real life experiences are able to carry out a fair an unbiased review.
The main players in the CFD industry in Australia are:
· IG Markets
· CMC Markets
· International Capital Markets (IC Markets)
· MF Global
I didn’t conduct a review of Etrade or Comsec as these companies are simply resellers of MF Global’s CFD offering.
In this review I talk about my real life experiences with every one of the companies mentioned above whilst bearing in mind the 4 essential elements that I consider as critical when choosing a CFD provider.
IG Markets
Customer Service: I’ve had an account with IG Markets for the last three years I use this account as my backup account. Over this time I’ve found that their customer service has declined significantly, in-fact at on one occasion I was unable to reach a dealer as they were all busy. On the whole I regard their customer service to be inadequate and would not recommend them.
Platform stability and ease of use: I use both their Pure Deal and L2 trading platforms and have had problems with both. Recently I experienced the problem of being unable to view my positions and free equity stopping me from buying and selling all morning. I would not consider either of their platforms as appropriate for an experienced trader.
Product range: IG Markets has a good product range, this is definitely one of their strong points. One thing I would say is that if you’re looking to trade CFDs on exotic futures contracts and forex pairs IG Markets is certainly not the CFD provider for you as they tend to stick to a fairly mainstream offering.
Pricing: On Australian share CFDs IG Markets has competitive pricing, their minimum commission on share CFDs is low and their spreads are tight on the major currency pairs, however if you’re an active trader and are looking for volume discounts don’t bother trying to negotiate with IG Markets their commission schedule is fixed.
CMC Markets
Customer Service: Out of the many CFD providers that I have ever traded with I have found CMC Markets to have the worst customer support, with CMC Markets your problems start as soon as you call them up for support and select a number from 1 to 10 just to talk to someone. I have also found their support staff to possess only a basic knowledge of their platform. General queries and problems frequently need to be escalated to more senior staff, not the type of support a professional trader demands.
Platform stability and ease of use: In recent times the stability of their trading platform Market Maker has improved considerably, though the trading platform still lacks functionality such as course of sales for share CFDs, something an experienced trader demands.
Product range: CMC’s product range is huge and not dissimilar to that of IG Markets though it’s worth noting that CMC provides a very good range of CFDs over exotic futures contracts and forex pairs, precisely what is missing from IG Markets product offering.
Pricing: Like IG Markets CMC markets offers good entry level pricing but lacks the pricing flexibility required when it comes coping with high volume traders.
International Capital Markets (IC Markets)
Customer Service: I had not heard about these guys until about one year ago. After calling them up and speaking to one of their sales staff I thought I’d give them ago. My experience so far has been second to none. Their customer service is top notch. Despite the size of my trading account I have my very own dedicated account manager that is familiar with the market and what I want, this is incredibly different to the call centre operations of IG and CMC Markets.
Platform stability and ease of use: They provide a number of trading platforms to cater for a varied range of clients. They have got a trading platform for newbies, intermediate and advanced traders. As I’m an experienced trader I selected their advanced trading platform Pro Deal which offers all the functionally an experienced trader needs. Although I can’t speak for all of their trading platforms their advanced trading platform continues to be trouble free and I would unquestionably recommend it to anyone.
Product range: All of the products absent from the two major providers such as futures, DMA functionality and exotic forex pairs are offered by these guys. Whilst writing this review I could not think of a product that these guys couldn’t offer.
Pricing: Like most of the CFD providers reviewed these guys offer good entry level pricing, however the difference with these guys is that they also have a flexible pricing structure for frequent traders. As I’m an active day trader they were willing to drop their minimum charge and offer me a commission rate of 0.04% on DMA CFDs, the very best rate offered to me by the other providers was 0.08%, they’re 50% more affordable!
MF Global
Customer Service: At the start I believed that these guys would take the cake on the customer support front, however unfortunately their high level of service didn’t last for more than one week after funding my account, this was quite astonishing and not something that I’d have expected. Once I was up and trading these guys did not want to know me, this type of customer service leads me to rate them as the worst of the lot.
Platform stability and ease of use: These guys offer one platform for CFDs, webIRESS. Although webIRESS is a superb trading platform they do not offer anything else, in comparison with IC Markets who offer webIRESS as well as many other trading platforms. Their offering is basic and not what a professional trader demands.
Product range: MF Global can offer you all the futures contracts you could ever think of however when it comes to forex, CFD and share trading they cannot compete with the likes of IC Markets. If it’s only futures you want than these are the guys to speak to, but for CFDs you should give them a miss.
Pricing: The entry level pricing for CFD trading at MF Global is expensive, they do however offer packages for frequent traders with discounts down to 0.08%, this is still a far cry from the 0.04% offered by IC Markets. Even though the CFD commission charges are costly I am sure that if you were only trading futures you could possibly get some great pricing from MF Global
Conclusion
As an expert trader I’m quite demanding in what I expect from my CFD provider, I’m sure that this is not the norm for many traders. There was actually just one CFD provider from those reviewed that was able to give me what a professional trader would demand, the remainder of the CFD providers have great offerings that would suit an normal trader but when pushed to their limits might falter, this is something an experienced trader can’t afford to have occur when money is on the line. Apart from my primary preference IC Markets I’d chose IG Markets as my backup, despite their shortfalls they do have fairly good platform along with a broad product range. There’s however a big difference in customer service and pricing of IG Markets product offering compared to my number one choice, IC Markets.