IG has posted a pre-close trading update today showing an expected increase in net trading revenue of 9% versus the same period last year.
Marketing and advertising are one of the biggest costs for any online CFD broker globally, you can see what various brokers have spent on marketing versus their revenue here, (it’s about 14%).
One might say that the FCA’s clampdown on welcome bonuses and leverage has been beneficial to IG, who have never actually offered welcome bonuses or excessive margin to clients. The bonus cap has essentially, added a barrier to entry for smaller and start up forex broker to onboarding new clients as bonuses were a powerful tool to entice new customers.
With bonuses no longer being a conversion tool for IGs competitors, traders, that perhaps before would use another broker could be returning to IG as their primary broker and not putting a significant amount of business through a secondary account.
The IG share price opened higher this morning, but is now fairly flat on the news, suggesting the market was expecting steady gains.
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