Investment Trends 2016 UK Leverage Trading Report

Investment Trends: IG Group Leads UK Brokers, FXCM Endorsed for Brexit Handling

The client retention efforts of CMC Markets were impressive, while Plus500 leads in conversion and digital presence.

One of the most prominent research houses in the industry, Australian firm Investment Trends has released the latest batch of data delving into the UK margin trading industry. The company has published its 2016 UK Leverage Trading Report, which includes data from over 12,000 UK traders and was sampled before and after the Brexit vote.

Speaking of the latter event, Brexit has predictably caused interest in margin trading to spike substantially higher. The number of traders shot up in the aftermath of the vote with a total of 124,000 traders estimated to have placed a bet on the markets. The figure is a record for the past five years and stands higher by 14 percent when compared to July last year.

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Commenting on the news, the Research Director at Investment Trends, Dr Irene Guiamatsia, said: “The UK leverage trading industry latched onto last year’s momentum and continued to grow at a record pace. This trend should continue given the generally subdued outlook for direct equities among retail investors.”

According to Investment Trends, there were a lot of first time traders that have converted their demos into real accounts, however the biggest increase came from 30,000 dormant traders that have returned to the markets in the aftermath of Brexit volatility.

IG Group in the lead, but FX and CFDs strongly contested by Plus500 and FXCM

IG Group has remained the undisputed leader on the speed betting market, however when it comes to FX and CFDs trading, the firm’s lead has been strongly contested. Plus 500 and CMC Markets have trailed in second and third spot amongst market leaders in CFDs trading, while FXCM was the runner up in the FX segment of the market.

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FXCM was a distinguished winner amongst clients who were grading their broker’s performance during Brexit. The adequate margin requirement changes which the company adopted in response to prospective volatility resulted in great execution and a very high rate of client satisfaction.

The UK subsidiary of the US-listed company however might face some more challenging times ahead, as according to Investment Trends, the DailyFX asset of the company has been a key driver in attracting new traders to the brand. FXCM sold this asset to IG Group earlier this year for $40 million.

In spread betting, clients of CMC Markets have been the most loyal to the firm, primarily due to the firm’s continued investment into the trading platform which its clients have come to love. The company’s proprietary solution has become a strong selection driver with the brokerage substantially improving retention of its customers.

Plus500 has continued to be the best company at on-boarding new clients with strong digital presence and effective conversion. From what the survey’s data is showing, Plus500 is probably one of the best companies in this area not only in the UK, but also globally.

Client satisfaction rising thanks to competition

UK clients have been very satisfied with the services that their brokerages are providing with satisfaction scores increasing across spread betting, CFDs and FX traders. When it comes to the broad market perspective, client satisfaction levels were at 89 percent. The metric used for this figure includes all ‘good’ or ‘very good’ answers.

“Overall client satisfaction levels were steady, while satisfaction in nearly all individual service areas lifted, sometimes substantially. This is symptomatic of an arms race, where providers must continually improve and innovate to remain competitive,” said Dr Guiamatsia.

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