List after list after list of the best trading brokers will include eToro and IG in them. It does not matter if it is for stocks, binary options, CFDs, foreign currency, or even cryptocurrency. These two are giants.
But they are such giants that they run into a problem: You really only need to use one. Anyone who is trading, whether they are new or experienced, will have to decide what broker they are going to learn eventually. Bouncing around brokers can be good to a point but settling down helps cultivate skill.
But there is a lot to consider when you are comparing brokers.
Let’s compare eToro and IG and see who has what.
Who is More Reputable? 🗯️
We are going to compare each broker from the outside and go deeper in as we go on. This is the best way to consider them, since this is the way that most consumers will consider them. And when people choose a broker, they are almost always going to see that broker’s reputation first.
When eToro was founded in 2007 online trading was in its infancy. This allowed them to build up slowly, incorporating more and more securities and markets into their broker until today, when they include almost everything that you can think to look for on the market, including cryptocurrency and CFDs.
In that time, however, they have only gotten a few licences from trading commissions. They are licensed in Australia and the United Kingdom but lack trading commission licences in Hong Kong and the US, as well as many other developed markets. But what does this mean?
They are clearly able to trade in Hong Kong and the US, so how important is trading commission licensing? While lacking a licence is not reason to keep a broker from operating within a country, it does mean that eToro has some issues that keep it from subjecting itself to the strictest scrutiny.
This is an upside to some people and a downside to others. The most obvious issue is that it creates a reputation for being unregulated. However, eToro does not go out of its way to avoid US licensing.
The issue eToro runs into is that it trades securities that disallow it from being licensed. Specifically, crypto currencies. Because of its wealth of crypto trading options, eToro cannot be licensed by trading commissions in many developed markets. This is simply because crypto is so new and unregulated itself.
Generally speaking, eToro also has a good track record for security. There have been eToro accounts hacked and sold on the black market, but these have universally been the result of users falling for phishing and ransomware scams. This means the broker itself has never had its encryption broken.
All in all, eToro’s reputation is not perfect. It is well above average however, especially given its size. The lack of regulation is reasonable cause for concern, but its security speaks for itself.
IG sits in interesting contrast to eToro. It was originally founded in 1974, long before internet trading was even conceived. In fact, the internet was barely conceived—everything was done in person.
This means that IG has a long history of trading. There are brokers that pop up, take people’s money, and then shut down a few years later. You do not have to worry about IG being one of those brokers. It has gone strong for more than 40 years. It is not going anywhere.
As a result, its licences reach far and wide. Trade commissions in almost every developed economy licence IG’s trading, supporting its reputation. It even carries certification in many smaller countries.
But of course, there is a catch. IG was slow to modernise, as is the case for many businesses founded in the 70s that found themselves still functioning as the internet rose to prominence. They have stepped up their modernization efforts lately, resulting in an app for their broker that is highly intuitive.
However, the issue they have is not that their tools are not new or shiny enough. The issue is that their security is known to be lesser than other brokers. This makes them a target for hackers.
Of course, while IG is known to score lower on security indexes, it has still never had a data breach.
The Winner: IG 🏆️
Both brokers have a reputation for never having a security breach and generally being trustworthy to their clients. IG, however, has more oversight from the various governments of the world. It also has seniority going for it, which will factor in heavily to most people’s surface-level appraisal of the broker.
Who has Better Securities? 🔒️
Once you know that a broker is secure and not a scam, your next question should be whether or not it even trades in the securities you are looking to trade. Most people are looking to trade stock, which IG and eToro both do. However, even by that metric there is disparity between the two brokers.
Not all stock markets are created equal. Some brokers have access to more than others. So, let’s take a look at what markets these two brokers connect to, as well as what securities they let you trade.
While eToro is known for its diversity of securities, it has a notable lack of depth in this department. It reports on its site exactly what it gives you: 2700 stocks, 55 different cryptocurrencies, 32 different commodities, 49 foreign currencies (and all the pairs therein), 13 indices, and 264 ETFs.
And naturally, the options, futures, and CFDs of the stocks that it trades are included in that 2700.
This is not a lot, especially considering that eToro connects with markets as big as the London Stock Exchange, the New York Stock Exchange, and the Australian Securities Exchange. The breadth is a lot more respectable than the depth. No matter what type of security you are looking for, eToro will have it.
But you will run into an issue if you are looking for a certain stock from a certain company that just happens to not be available on eToro. Now, it is worth noting that eToro does have a saving grace to help mitigate this. And that is the broker’s communication tools.
Simply put, many trades that are not technically supported by the app can be made by communicating directly with other traders. There are even tools on eToro for finding other traders in this way.
It can take some maneuvering with eToro’s support teams to make really unique trades, but it is possible. This is not always easy, however, so it cannot be considered to completely save eToro.
It is easy to look at IG’s market offerings and think that IG goes for depth where eToro goes for breadth. That is not actually the case. In reality, IG has greater breadth as well, at least when it comes to stocks.
You might think “at least when it comes to stocks” to make that a highly qualified statement. But since stocks represent something like 90% of all transactions on the marketplace, a breadth of stock means a breadth of trading in general. This is accomplished by IG having access to more than 17,000 markets.
These 17,000 markets include industries from countries all over the world. The United Kingdom, the United States, the European Union—these regions all have multiple markets within them which themselves contain multitudes of different companies trading in different stocks.
It is not exactly true to say that IG connects them all, but it connects far more than almost any other broker, and certainly more than eToro. And as always, the breadth of the market is not linear, but exponential; as IG incorporates more stocks, it also gives you access to more options, futures, and CFDs.
The one blind spot that IG has in its securities is crypto. You may remember earlier how eToro was not able to be licensed in some regions due to trading crypto, while IG was licensed in most regions. This is why: IG has no tools for trading cryptocurrency, even when interfacing directly with other traders.
The Winner: IG… Most of the Time 🏆️
Nine times out of ten you are going to want to use IG to trade. Most people are getting into trading to use stocks, and IG has the stocks to trade. However, there is a good number of people who are interested in crypto as well. For them, eToro is always going to be a better option.
This should be a strong indication to you that the difference in many trade brokers is kind, not quality.
Who has Better Commissions and Fees? 💰️
Brokers have to make money somehow. That phrase seems to imply that they have trouble making money, but that could not be further from the truth. IG and eToro both make money through commissions and account fees. What are these fees? Why would they charge you for making money?
Commissions are a charge made to your account to pay the broker for facilitating the trade. Technically speaking they are an artefact from the old days of in-person trading.
Account fees are similar, and have a purpose in both in-person trading and online trading. Account fees are levied against you for being inactive, withdrawing your funds, and making certain risky trades.
These fees exist to help levy the risk the broker is taking by allowing you to trade. Account fees do not always end up in the pocket of the broker that charged them—if you overtrade massively and end up with a negative balance, the account fees are usually used to help pay the people you owe money to.
So, between IG and eToro, which broker has the better commission fees and account fees?
eToro’s Commissions and Account Fees
Technically speaking, eToro does not have commission fees. That is a suspicious statement if ever there was one, so let’s elaborate: eToro does not have fees for the broker’s facilitation of trade.
Do not panic, the fees they do have come in small quantities. If you buy or sell crypto, eToro will take 1% of the trade. If you are inactive for more than a year, then they will begin charging you £10 per month.
Some people consider eToro’s minimum balance a kind of fee; they require you have £200 in your account before you can trade. They also require that you trade CFDs and options in amounts of £10 or more. But these do not actually subtract money from your total capital, so they are not really fees.
It can be tempting to look through every contract and every page of their website to look for where some fees might be hiding, but those that we referenced are basically it. eToro has very few fees.
IG’s Commissions and Account Fees
The fees associated with IG are a little more complicated. Although they start strong in that they also have no commission fees. What they have instead are lots of small fees for different situations.
To begin with, if you have an ordinary stock trading account then you will never be charged an inactivity fee. You also do not have to pay anything to withdraw your funds. But not every account is like that.
If your account trades in CFDs or is opened as a CFD trading account, then it will have a £12 inactivity fee applied to it after 24 months. You have to leave the account open and do nothing for two years for that to happen, so it is not like it is easy to do. But that means that you cannot blanketly say that IG has no account inactivity fees. Similarly, there are other types of accounts that also take on unique fees.
You can open an account with IG that is considered a “management account”. This is an account that IG accountants can manage for you if you do not want to trade yourself. This does require a “management fee” (a commission fee by another name), with the fee being determined by a few different variables.
We could go on about the different accounts, trades, and the fees IG associates with them. But that is not what we are here for, nor what you are here for. You are here to know whether IG or eToro has better fees. The answer is probably obvious by now.
The Winner: eToro 🏆️
Not only does eToro have fewer fees, but the fees that it does have are smaller and far easier to understand. This is related to eToro being easier to operate in general. IG simply has more to worry about. That being said, you are unlikely to actually run into a vast majority of fees IG issues to you.
But a majority of the problem is that IG’s fees are so complicated that you cannot make certain statements about all of them. If someone asks, “Does IG have commission fees?” the answer is not going to be yes or no. Not only is the answer to that question more than one word, it’s more than a paragraph.
Who has the Better App? 📱️
This is a bit of a trick question as “better” is highly subjective. Is the simpler app the better app? Is the more complex and nuanced app the better app? Well, that is actually a false dichotomy.
The value judgement we are making is how much the app of each broker helps you achieve your trades. This evaluation takes into account what kinds of securities they offer, the markets they connect to, but most importantly the ease with which you are able to execute these trades and explore others.
Most people consider eToro to be a “digital native” broker. This means that it was basically built to be used in the information age. Its app is responsive and well-organised. It was not always like that—there was a time when you had to search to find basically anything on eToro’s app. But that time has passed.
Part of eToro’s app design is to make navigating it fast. That means no load times, very few button presses separating actions, and easy access to functionality from any given screen of the app.
This is partly to make it more usable, obviously. But another advantage is that it makes it easier to program bots to do algorithm-based automated trading. Because the buttons are responsive and the design consistent, both man and machine can easily use the app to trade rapidly.
When we take a look at IG’s app, it is a slightly different story. Let’s get one thing straight: It is not a bad app. It is an app dealing with representing an absolutely daunting amount of data and tools.
The IG trading app is responsive and clearly built with the same efficiency in mind that eToro’s has. But it is wielding a double-edged sword: Remember, IG connects to thousands upon thousands of markets. It features far more securities and account tools than eToro. That means its app is going to be less usable.
The Winner: eToro 🏆️
Judging purely on usability, eToro has to take it. IG puts up a good fight, but it suffers under its own complexity. Many people will probably read that and not be dissuaded from using IG’s app. Good! It is not a bad app. But there is a hard, clear line between how easy eToro’s is to use over IG’s.
Who has the Better Trading Tools? 📊️
For those who are uninitiated, “trading tools” sounds like another word for “securities”, but this is not the case. Trading tools does not refer to the different ways of trading. Rather, the tools are programs that help you know when, where, how, and with whom to execute your trades the most optimally.
eToro’s Trading Tools
The tools eToro gives you are charting tools, indicators of trends, and alerts. They also allow you to customise “trade autosaves”, essentially letting you build a history of the trades you made to pull from and execute automatically. The issue is that while the tools are good, they have limits on them.
Frankly, the charts, indicators, and alerts can only be set on so many different securities. This means that it will not let you track too many variables at once. This is meant to help you keep your interface clean and focused. The result, however, can make it hard to maximise your trades.
IG’s Trading Tools
In sharp contrast, IG has the same charting, indicators, and alerts that eToro does, but allows you to make far more complex use of them. Most frequently this means simply including more securities in them. But it also means using these tools as their own trading interface.
That’s right: You can trade straight from the charts IG helps you make.
The Winner: IG 🏆️
While the tools each broker uses are the same, IG makes far more expansive use of them. It reflects the broker’s focus on advanced users, allowing you to even make trades using the tools themselves.
As usual, eToro’s horse in the race is not bad. But it is hard to optimise these tools when there are arbitrary limits put upon them.
These two brokers are in tight competition and seeking to determine the right one for you is wise for that reason. But if there has to be only one broker, then it should be IG.
It is a simple matter of IG giving you more to work with. It is not always intuitive or easy to manage. But you can trust IG to have what you need it to have. And more importantly, you can learn IG over time.
The bad first impression given by IG’s complexity will fade with time as you learn it. The shortcomings eToro has—the limited number of stocks, the less trustworthy certification—will be there for a while.
Of course, if you need cryptocurrency trades then eToro is a necessity, since IG does not have that. But since you are more likely to decide on which broker will help you trade stocks the best, IG has to be considered the winner due to its superior market access and trading tools.
The Winner: IG 🥇️
You Might Also Like: