I have been buying and selling CFDs in Australia since they were initially introduced in 2003. Over this period I have dealt with all the main CFD brokers in Australia first hand. When talking to groups of traders at investing expos and seminars around Australia I regularly get asked who is the best CFD provider? I wrote this review to help answer this million dollar question.
This review covers all the major CFD providers in Australia that I've dealt with first hand, whilst writing this review I took into consideration 4 major points which as an expert trader I believe are the critical requirements to think about when selecting a CFD provider, they 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 conducted by a variety of internet sites and magazines in Australia a lot of which are biased with the winners often being selected by journalists not traders and determined by the amount of cash spent on advertising in the magazine or on the website that performed 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 did not conduct a review of Etrade or Comsec as these companies are purely resellers of MF Global’s CFD offering.
In this review I talk about my real life experiences with each of the companies mentioned above whilst taking into consideration the 4 critical elements that I view as crucial when selecting a CFD provider.
IG Markets
Customer Service: I have had an account with IG Markets for the last three years I use this account as my backup account. Over this time I have found that their customer service has declined drastically, in-fact at on one occasion I was unable to reach a dealer as they were all busy. On the whole I consider 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. Lately I experienced the problem of being unable to view my positions and free equity preventing me from buying and selling all morning. I wouldn't regard either of their platforms as appropriate for a professional trader.
Product range: IG Markets has a good product range, this is definitely one of their strong points. One thing I'd say is that if you are looking to trade CFDs on exotic futures contracts and currency pairs IG Markets is definitely 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 are an active trader and are searhing for volume discounts don’t bother trying to negotiate with IG Markets their commission schedule is fixed.
CMC Markets
Customer Service: Out of all the CFD providers that I've ever traded with I have found CMC Markets to have the worst customer support, with CMC Markets your problems start from the moment you call them up for support and choose a number from 1 to 10 just to speak to someone. I've also found their support staff to have only a basic knowledge of their platform. General queries and problems continually must 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 significantly, however the platform still lacks functionality such as course of sales for share CFDs, something an experienced trader demands.
Product range: CMC’s product range is broad and not dissimilar to that of IG Markets though it's worth noting that CMC provides an exceptional range of CFDs over exotic futures contracts and foreign exchange pairs, precisely what is absent 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 dealing 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 chatting with one of their sales staff I thought I would 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 need, this is incredibly different to the call centre operations of IG and CMC Markets.
Platform stability and ease of use: They offer a number of trading platforms to cater for a diverse range of clients. They've got a trading platform for newcomers, intermediate and advanced traders. As I'm an experienced trader I selected their advanced platform Pro Deal which provides all of the functionally a professional trader needs. Although I cannot speak for all of their trading platforms their advanced trading platform continues to be trouble free and I'd definitely recommend it to anyone.
Product range: All of the products missing 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 many of the CFD providers reviewed these guys offer excellent 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 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 did not 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 sort of customer service leads me to rate them as the worst of the lot.
Platform stability and ease of use: These guys offer one trading platform for CFDs, webIRESS. Even though webIRESS is a great 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 an expert trader demands.
Product range: MF Global can give you all the futures contracts you could ever 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 your 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 right down to 0.08%, this is still a far cry from the 0.04% offered by IC Markets. Although the CFD commission rates are costly I am sure that if you were only trading futures you could get some great pricing from MF Global
Conclusion
As a professional trader I am quite demanding in what I expect from my CFD provider, I'm sure that this isn't the norm for many traders. There was actually only one CFD provider from those reviewed that could give me what a professional trader would demand, the remainder of the CFD providers have great offerings that may suit an regular trader but when pushed to their limits might falter, this is something a professional trader can't afford to have occur when capital is on the line. Besides my number one preference IC Markets I'd chose IG Markets as my backup, regardless of their shortfalls they do have reasonably good trading platform along with a broad product range. There is however a huge difference in customer service and pricing of IG Markets product offering compared to my primary choice, IC Markets.
Author Resource:
Matthew Jones is a professional CFD trader with over 15 years experience in the market. Matthew has been buying and selling CFDs on-line since their introduction to Australia in 2003. Matthew has written assessments on a number of CFD providers for a variety of trading magazines and online publications. Matthew has also held several seminars on day trading and scalping CFDs for a living.
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