IG’s efforts to protect loyal clients post-Brexit hit margins

A bid to protect loyal clients from wild market swings around the EU referendum cost spread-better IG, the business revealed today with a fall in UK revenues.

IG put up margins for clients in the build-up to the vote — in effect, making it more expensive to trade currencies and indices — to “preserve long-term relationships” while financial markets were “increasingly subdued” in July and August.

The 1.8% fall in UK revenues in the three months to August 31 contrasted with a 5.1% rise across the group overall and came despite a big marketing push for new customers. At £55.4 million, UK trading accounts for half the group’s £111.3 million revenues.

IG — led by boss Peter Hetherington — saw shares fall 5% or 50p to 876p after the update, although the FTSE 250 company avoided issuing a profit warning, unlike smaller rival CMC Markets.

Shore Capital’s Paul McGinnis said the company would need to accelerate over the remaining nine months of the financial year.

“This means that an improvement in trading conditions will be necessary to meet our full-year numbers.”

IG is helping some clients manage risks to ensure they can never run into debt with the company and it is also rolling out a stock-broking business in Australia after a UK launch three years ago.