The firm that is known to many for its spread betting and online services for investors is getting into wealth management, it says.

UK-based spread betting and online trading house IG Group is launching a range of model portfolios as part of a push into the “digital wealth management industry”.

The company has launched IG Smart Portfolios, a range of model investment portfolios constructed by IG using asset allocation insights from BlackRock, the world’s largest listed asset management house.

The portfolios are constructed by IG using iShares exchange traded funds. There are no set-up, dealing, rebalancing or exit fees, IG said.

“Our research shows that many investors are confident handling their own investment choices, but even so, a number are still being blindsided by fees. Hidden charges materially eat into investment returns and it is crucial that providers are transparent about all fees upfront, so that investors know the exact costs they will incur,” said Ian Peacock, head of UK and Ireland at IG Group. 

“As we join the digital wealth management industry, we are keen to show that a low cost online service leads to greater consumer control and clarity, without compromising at all on quality. There will be no hidden fees when you invest with IG Smart Portfolios, meaning our client’s investments will work harder for them. Every charge an investor may incur is fully disclosed prior to opening an account and at all times while they invest with IG,” he said. 

A number of online trading and spread betting firms offer clients access to exchange traded funds, a sector that has surged in recent years, with investors attracted by their relatively low fees and ability to access whole market segments in one hit. Firms such as City Index and Spread Co, for example, also offer ETFs as part of the menu. 

The average total expense ratio - the typical way ETFs express their charges - is 0.25 per cent. 

The launch follows IG Group’s development of a share dealing offering in September 2014, built on its technology platform, including Individual Savings Accounts and the introduction of its self-invested personal pensions offering in May last year. 

Research undertaken by IG on investor demands shows a substantial market opportunity for online investing, with half of investors (52 per cent) currently preferring to manage their investments online and four in five (83 per cent) saying they could be persuaded to switch online in the future. Research was carried out from 23 - 29 August 2016, with 500 UK investors/high earners.