Firms look to woo wealthier clients

At the centre of the trading floor at IG Group is a state of the art television studio, with two full-time presenters whose careers include stints with Bloomberg TV.

The company, which has a market capitalisation of more than £2.8bn, runs regular broadcasts online as part of efforts to educate customers on the most salient trades and trends in the market.

The programme complements a broader push by IG — as well as by rival CMC Markets — to target and retain more sophisticated and deep-pocketed traders. These customers are becoming increasingly attractive as they will be exempt from forthcoming European regulations that could reduce trading.

The move reverses the trend over the past five years by smaller companies to entice “have-a-go” punters to bet on financial markets, which has driven rapid industry growth.  “This is not the death of [spread betting],” says Sam Tyfield, a partner at London-based law group Vedder Price. “It’s a maturity of the market and those who use it.”

IG and CMC say they already host a typically moneyed and experienced clientele: former traders, specialists in particular assets and IT programmers who code their own trading strategies, for example. Day traders are trickier targets — many banks ban employees from spread betting to prevent potential conflicts of interest or insider trading.

The winnings can be large. Peter Hetherington, IG’s chief executive, says some 3,000 customers — about two per cent of its total — generate about half of the company’s non-US revenue. These high-earners will typically pay £85,000 a year in transaction fees to the platform, meaning they pocket many multiples of that.

“A defining characteristic is that they are all self-made people who are used to making their own decisions,” Mr Hetherington says.