City Index Broker Review
City Index are, along with ETX Capital, probably in t
second tier of spread betting brokers in terms of industry recognition and user numbers. They have clear advantages in some areas - making huge efforts to provide market-leading analysis tools and with good third-party collaborations, but are let down by a surprisingly high spread on some key products. They also have a very nice front end - if you are more interested in the functionality and analysis on offer than in saving a half pip here and there on spreads then City Index are worth looking at. It is worth noting, however, that they have had a flew blots on their copy book in the recent past - with regulator fines and an ugly incident where they sued a profitable trader...
City Index Broker Review - Products and Spreads
Spreads are probably City Index’s weakest area. During our live test in normal London session trading hours we experienced some unexpectedly high spreads - 1.2 on EUR/USD (compared to 0.6 on IG Index and 0.8 on CMC Markets) and 1.8 on cable, (0.9 on IG and 1.3 on CMC). They are clearly no market leader here and when questioned the very well informed rep suggested that they trade these slightly worse prices off against the analysis offerings that they have. Presumably some of the tools and research they provide cost them significant amounts so this is a fair justification. In other words City Index feel they offer a premium product and charge a slightly premium price for it. If tight spreads are the thing you are looking for then you’d be better off looking elsewhere. However, if you like some of the analytical tools they provide and the alternative is paying large amounts of money for them 3rd party, then sucking up the wider spreads and getting the tools might be the way to go.
City Index Broker Review - Interface and Platforms
The City Index web based spread betting platform, Advantage Web, is very nice indeed. It is all bright yellows and deep blacks and is second possibly only to CMC Markets for sheer aesthetics. Some may prefer the gold and black of ETX Capital and if you are a sombre, whisky and cigars kind of person, maybe the slightly neon yellows and modern flat design won’t be for you. However, if like me you share most of your DNA with magpies then you may appreciate the shiny big glowing letters and super-bright graphs.
Actual navigability is not as strong on the web platform - some of the aforementioned analysis tools and charting package are actually quite hard to find. The menus don’t navigate that intuitively (for me at least) but once you work it out it is pretty good.
Similar to CMC, the other company that have a lovely-to-look-at front end, you cannot trade with City Index on MT4 and this is a disadvantage. If you want to make use of Expert Advisers as many MT4 users do, or are just a big MT4 lover then this won’t be the brokerage for you.
However, there is a downloadable version of their software, that has many similarities with MT4. It has the ability to use automated trading strategies and has loads more indicators. Similar to MT4 it is nowhere near as sexy as their web based front end, but if you like grey, boring and hyper-functional then this could be the solution for you.
Andrew Saks-Mcleod of Finance Feeds Comment: “Established for 30 years until its acquisition by North American retail FX giant GAIN Capital two years ago. Technologically and operationally, City Index lagged behind CMC Markets and IG Group, leading to it having become the UK branch of GAIN Capital rather than soldiering on as City Index under its original brand.”
City Index Broker Review - Service
Probably the keenest to call me of all the brokers upon initially opening the account. I was called several times to enquire when I may be depositing and how much I may be depositing and it was suggested that although there was a minimum amount I may wish to go higher than that, to at least £500, in order to not have issues with margin. A very true point but also a bit ‘salesy’ and may be off-putting to those who don’t like pressure calls. There was also an offer to do a platform run-through to show some of the analysis tools such as Recognia and demonstrate these. The catch being that your account has to be funded first, so if you wouldn’t mind putting some money in now then we can do the call… It was even suggested that I fund the account whilst I was on the call when it became clear I couldn’t be shown the features in a non-funded account!
Now, this is hardly pressure-selling Jordan Belfort style and, in fact, if you are looking to genuinely fund and use a City Index account then a platform run through is a good thing. Additionally the chap did make it clear that I could take the money out without a fee at any time. But, for those who don’t like to be called by someone with something to sell, especially when it comes to trading, it may not be everyone’s cup of tea.
The positives were that you really will get a personal account manager who will be at the end of a phone and talk you through anything you have questions on and who is clearly knowledgeable. I personally have no issue with ‘salesy’ and if you are happy to hold your own and not buy anything you don’t want to buy, then having a single point of contact can be useful.
City Index Broker Review - Safety
FCA regulated. Tick. Established broker. Tick. London HQ and dedicated UK based account manager. Tick. Fined £490,000 for transaction reporting failures. Tic- wait what? Yes, City Index are a long standing firm that are part of one of the largest global financial firms, Gain Capital but they do have this black mark against them. Whether a 2011 fine for ‘reporting failures’ has any impact at all on their ability to safely handle your money today is something you have to decide.
You may also wish to note that also in 2011 City Index sued one of their own clients for making money in a way they deemed unfair… You can google that.
But, again, all of that is ancient history really - they are under new ownership and operation so it is up to you whether you hold the above incidents against them.
City Index Broker Review - Conclusion
A largish broker owned by a massive conglomerate with OK spreads, a sexy front end and a slightly chequered recent history. Under new ownership since their 2011 problems and with some first rate analysis tools available for free to funded account holders, there is no doubt that City Index are worthy of your consideration but do have some drawbacks for certain type of traders - scalpers, MT4 addicts etc.