0.7% hidden charge on every sale transaction

[David88]

Just lost £40 buying and then selling £4000 worth of US shares at the same price. I only noticed this because the share prices and exchange rate hadn't moved and I looked at 'my account' straight after. It may be harsh to describe this as a 'scam' as IG needs to make its profit somehow and a lot of its services are free. I thought IG took its profit purely from the trading margin between currencies USD/GBP which is an amazing deal for me as I invest lots of small amounts for fun, so a transaction fee is a killer. In fact there is a default setting tucked away somewhere which instantly converts any shares sold back to your base currency at a 0.7% mark up on the margin that already exists. I would be more than happy to pay 0.7% when withdrawing money from IG as a fee for using their services, but to pay it every time I sell a share is a complete sting, especially as this is a pretty well hidden charge. I would urge everyone to find the setting and switch to manual!

Edited May 20, 2020 by David88
punctuation

[David88]

Just realised from another poster they get you both ways!  I changed to 'manual' when I realised the above.  But now I see that incurs me a $15 charge on every transaction.  Putting the two together,   you should consider any purchase of shares up to about £4000 to incur an effective 1% transaction charge,  realisable on sale of your shares.  This means there is about a 1% bias against any transaction you do (you are starting 1% down),  so there is an advantage in looking for medium to longer term investments rather than attempting to make small gains of one percent here or there.  I am going to change back to automatic,  as I tend to invest small amounts,  and reconsider my whole approach.

 

Edited May 20, 2020 by David88

[BASA]

Thank you for this information much appreciated

[DannnoB]

yeah and in the positions tab it says you are in profit in $ and converts it to a £ profit  when your actually making a loss in £ when you check the £ paid for the shares.

 

ON US shares from UK they basically calculate the book value  in $ and show you a dollar profit converted to £. the book value isn't based on what you actually spent. I think this is very misleading.