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 brokers in Australia first hand. When talking to groups of traders at trading expos and seminars around Australia I frequently get asked who’s 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 traded with first hand, when writing this review I took into consideration four major things which as a professional trader I feel are the critical requirements to think about when picking a CFD provider, they are:
1. Customer Service
2. Platform stability and ease of use
3. Product range
You must to note that there are CFD provider reviews performed by a number of internet sites and magazines in Australia a lot of which are biased with the winners frequently being selected by journalists not traders and determined by the amount of cash spent on marketing in the magazine or on the web site 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 carry out a review of Etrade or Comsec as these companies are simply resellers of MF Global’s CFD offering.
In this review I discuss my real life experiences with each of the companies mentioned above whilst bearing in mind the four essential elements that I view as essential when deciding on a CFD provider.
Customer Service: I’ve had an account with IG Markets for the previous three years I use this account as my backup account. Over this time I’ve found that their customer support has declined a lot, in-fact at on one occasion I was unable to contact 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 platforms and have had troubles with both. Lately I experienced the problem of being unable to look at my positions and free equity stopping me from buying and selling all morning. I would not consider either of their trading platforms as appropriate for a professional trader.
Product range: IG Markets has a fantastic product range, this is certainly one of their strong points. One thing I would 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 have a tendency 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 main 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.
Customer Service: Out of all of the 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 choose a number from 1 to 10 just to speak to someone. I have also found their support staff to possess only a basic understanding of their platform. General queries and problems frequently must be escalated to more senior staff, not the kind of support an experienced trader demands.
Platform stability and ease of use: In recent times the stability of their trading platform Market Maker has improved drastically, however the trading platform still lacks functionality such as course of sales for share CFDs, something a professional trader demands.
Product range: CMC’s product range is extensive 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 currency pairs, precisely what is missing from IG Markets product offering.
Pricing: Like IG Markets CMC markets provides 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’d give them ago. My experience to this point has been second to none. Their customer support is top notch. In spite of the size of my trading account I have my own dedicated account manager that knows the market and what I want, this is very 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 diverse range of clients. They have a trading platform for newcomers, intermediate and advanced traders. As I am an experienced trader I chose their advanced trading platform Pro Deal which provides all the functionally a professional trader needs. Though I can not speak for all of their trading platforms their advanced trading platform continues to be trouble free and I’d unquestionably recommend it to anyone.
Product range: All of the products missing from the two major providers like futures, DMA functionality and exotic forex pairs are offered by these guys. Whilst writing this review I couldn’t think of a product that these guys could not 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 arrangement for frequent traders. As I am an active day trader they were prepared 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!
Customer Service: At first I believed that these guys would take the cake on the customer support front, however regrettably their high level of service did not last for more than one week after funding my trading 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 kind 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 platform they don’t offer anything else, in comparison with IC Markets who offer webIRESS along with many other platforms. Their product offering is basic and not what a professional trader demands.
Product range: MF Global can offer you all the futures contracts you could ever imagine 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 pricey, 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 rates are pricey I am sure that if you were only trading futures you could possibly get some great pricing from MF Global
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 most traders. There was really just one CFD provider from those reviewed that was able to give me what a professional trader would demand, the rest of the CFD providers have great offerings that might suit an regular trader but when pushed to their limits might falter, this is something a professional trader can’t afford to have happen when money is on the line. Besides my number one choice IC Markets I would chose IG Markets as my backup, regardless of their shortfalls they do have reasonably good platform and a broad product range. There is however a huge difference in customer service and pricing of IG Markets offering in comparison to my first choice, IC Markets.