What is a professional client and how do I become one?

What is a professional client?

A professional client is deemed capable of making his or her own investment decisions, and understanding the risks involved, with greater autonomy than retail clients. This means they can access favourable rates and benefits, but will waive some FCA protections afforded to retail clients.

Some clients may be eligible to classify themselves as professional clients. If you’re eligible, you’ll be presented with the option in My IG when you log in.

What are the benefits of becoming a professional client?

The benefits of being a professional client are:

  • A 10% reduction in your current margin rates, allowing you to trade with more leverage (eg the FTSE rate of 0.5% is reduced to 0.45%)*
  • Access to a dedicated account management team
  • A three-month free trial of ProRealTime, an advanced charting platform
  • Lower management rates on IG Smart Portfolios, starting from 0.25% instead of 0.65%
     

What are the risks?

You will waive some FCA protections as a professional client, such as:

  • Negative balance protections will not apply to you. You will have an obligation to make additional payments if your account falls into a negative balance
  • When talking to our retail clients we need to use clear language, and be very balanced when talking about the risks and benefits of leveraged trading. We can use more sophisticated language when talking to our professional clients
  • We may assume your level of knowledge and experience when assessing whether our products are appropriate for you
  • When executing your orders, we owe you a duty of best execution. For retail clients we must prioritise overall prices and cost of a transaction when giving best execution. As a professional client, we may prioritise other factors in giving best execution, such as speed and likelihood of execution if we determine they are equally or more important than overall price. In practice, we will not change the way we execute your orders
     

How do I become a professional client?

You can apply to be categorised as a professional client by logging in to My IG and selecting ‘settings’ and then ‘client and account status’.

To qualify as professional, you need to meet certain criteria related to your trading history, investment portfolio, and/or your employment history.
 

Other questions

Can I change my mind if I no longer want to be classified as professional?


Yes, you can contact us if you no longer want to be classified this way.

Will this change apply to all my accounts?


Yes, the change will apply to all your IG accounts.

What are the criteria to qualify for a professional account?


You’ll need to meet two out of the following three criteria in order to qualify as a professional client:
 
  1. Professional experience: You must have worked in the financial sector in a professional position (which requires knowledge of CFDs or spread betting) for at least one year. 
  2. Investment portfolio: You are required to have a ‘financial instrument portfolio’ (defined as cash deposits and financial instruments) of €500,000 or more. Acceptable instruments include cash, stock portfolios, stocks and shares ISAs, trading accounts, mutual funds, and SIPPs. Managed company pensions, non-tradeable assets, property, luxury cars, or physical gold are not acceptable. 
  3. Trading experience: You must have placed 40 trades of significant size in the last year. Significant size is £10,000 notional for equity trades and £50,000 for everything else. Buying £10 of FTSE and then closing it counts as one single trade. You do not need to have made the trades with IG. 

Does the experience I’ve gained trading with IG count towards the application?


Only in terms of trading experience. If you want to qualify on the basis of your professional experience, you’ll need to have held a role in the financial sector that required knowledge of spread betting or CFDs. 

What kind of proof may I need to provide?


We’re likely to ask for proof of an investment portfolio consisting of €500,000 in financial instruments or cash. This would normally be in the form of a bank statement or a ledger from a stock portfolio. 

For trades that have not been carried out with IG, we may ask for an account ledger showing enough trades of the required notional value.

We will need an in-depth description of professional experience which explains your previous role/s and how these gave you exposure to derivatives.

If I declare myself as a professional, will it affect my tax status?


IG is not aware of any impact this will have on your tax status. The change from retail to professional is a regulatory classification and it does not impact the underlying nature of the product being offered, which is still a spread bet or a CFD. If you are concerned about the impact this will have on your individual tax status, you should seek independent advice. Tax depends on a client’s individual circumstances and therefore IG is not able to provide advice or any assurance about your status.

Can I upgrade from a joint account?


Yes, you can. However, each of the account holders will need to qualify under the criteria for this to be possible.

Can I upgrade from a corporate account?


Yes, you can upgrade a corporate account. However, it’s important to note that if you’re applying on the basis of trading experience or the value of your investment portfolio, this would all need to be in the company’s name. If you’re looking to satisfy the criteria for professional experience, this will need to be based on the individual’s.

* European regulators have announced restrictions on the sale of certain products to retail clients, due to come into force in early July. This means minimum starting margins of between 3.33% and 20% (depending on the asset class) on CFDs and spread betting, and a ban on digital 100s.

If you meet the FCA’s criteria and you choose to be treated as a professional client, these rules will not apply to you – however you will lose other regulatory protections as listed above.

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Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 79% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.