Massive changes at IG Group: NADEX CEO out, new direction for Daily FX and the US division

Almost two years have passed since FinanceFeeds was the first resource in the world to publicly announce that British FX and CFD giant IG Group was doing what we have been advocating for many years – re-establishing itself in the United States.

Back in December 2017, FinanceFeeds conducted detailed research which demonstrated that IG Group was to re-enter the US market once again, at a time at which there was very little competition in the world’s most stable and customer-friendly markets for electronically traded instruments.

In 2011, just after the implementation of the Dodd-Frank Wall Street Reform Act which required various structural changes to all aspects of the financial services sector in America, and at approximately the same time at which the United States authorities implemented a minimum capital adequacy requirement for retail firms at $20 million, many companies exited the market, IG Group being one of them.

IG Group had been extremely well recognized in North America until its exit in 2011, and had benefited from some extremely strong leadership, notably that of Rod Drown, an industry figure very highly regarded by FinanceFeeds, who was CEO of IG Markets US division from 2007 until 2010.

A year later, in January 2019, IG Group’s bold and absolutely astute move back to the Chicago heartlands of its original US head office among the stalwarts of the global listed derivatives industry had been well underway, and the company launched a new website, telling America that it was time to turn FX trading on its head.

IG believed that its retail FX offer in the US would be able to compete successfully in what is currently a limited competitive market with only three other providers. IG has the added benefit of the lead generation provided by the DailyFX website.

It is worthy of note that effective November 30, 2018, FX Publications Inc, doing business as Daily FX, became registered as NFA Member, Forex Firm, and Introducing Broker. IB is guaranteed by IG US LLC.

This was clearly a lead up to something important for the extremely analytical American audience that IG Group needed to serve.

Thus, here we have a British publicly listed retail trading giant which had the reputation, stability and expertise to rival the high street firms such as ScotTrade or Charles Schwab – IG Group has its own retail stock trading platform – as well as the distinctly retail-orientated domestic giants such as OANDA and GAIN Capital.

Since then, however, the company has maintained an almost impeccable silence, and FinanceFeeds has been asked by many FX industry executives what the current situation and direction is at IG Group’s North American arm given its huge advantage, yet tumbleweed has been blowing across the Western shore of Lake Michigan.

Until yesterday.

Late last night, FinanceFeeds was contacted by a very prominent senior FX industry executive in Chicago who explained that there was a major development taking place.

“I have it on very good authority that CEO Tim McDermott was terminated from NADEX. As I understand it, Ian Peacock is now the head of IG Group USA. IG Group’s US division has now absorbed NADEX, the Futures Commission Merchant and it has also absorbed DailyFX” said our source.

Whichever way this is viewed, it is very big news indeed for IG Group. DailyFX was acquired by the company from FXCM in 2016 for just shy of $40 million.

At that time, its purchase price appeared to be a princely sum, however IG Group, being a solely British company whose former CEO Peter Hetherington had explained to FinanceFeeds that 80% of the firm’s customer base were retail CFD and spread betting traders in the United Kingdom, with the remainder being in Western Europe. DailyFX at the time was – and still is – Britain’s most popular economic calendar, therefore this could be seen as a de facto onboarding and engagement tool for IG Group in its home market.

Now, just three years on, things are somewhat different and IG Group has Trans-Atlantic aspirations for DailyFX, and is structuring that division of the firm alongside its long-established derivatives venue NADEX which has until now been known as an on-exchange binary options platform, one of two NFA licensed venues of this nature in the US, the other being Cantor Exchange which has since moved away from binary options altogether, and had very little volume during its time in that market.

NADEX had been somewhat different. Led by the late Yossi Beinart for quite some time until the beginning of this decade, its recent leadership had been under Tim McDermott, who steered NADEX during the period of time that IG Group was absent from the US market, thus giving the distinct impression that IG Group’s core activities in the United Kingdom were a different matter from its derivatives exchange for binary options in the US, despite many perspectives that NADEX relied on IG as its counterparty.

Now, with Mr McDermott having moved on, and the amalgamation of Daily FX and NADEX into IG Group’s US division, the company’s approach in the Land of the Free is somewhat different.

Ian Peacock, who has taken over that division and is now responsible for the leadership of NADEX, IG Group LLC US and DailyFX had joined IG Group in London in 2015 as Head of UK and Ireland, before being promoted to Chief Client Officer in June 2017, just at the time during which IG Group’s NFA membership application had been submitted.

Becoming President of IG Group North America in June, his division was based in the same Chicago office as NADEX, with the two entities under separate leadership, as Tim McDermott was still CEO of NADEX, and DailyFX was firmly rooted in the Square Mile on the British side of the Atlantic.

A Sloan Fellow of London Business School, Ian Peacock has a highly elevated career in institutional financial services behind him, having spent 9 years at Credit Agricole in New York and London, his final position having been CEO for the UK and Global Head of Execution.

Prior to that, he had been Head of Equities at REFCO for 3 years, and had spent the prior 4 years as Head of Business Development for the US and Europe at London Stock Exchange.

FinanceFeeds spoke to senior executives at IG Group here in London this morning, in order to look at the corporate rationale behind the decision to place NADEX and DailyFX in the hands of IG Group’s US division and run it as one unit.

“Ian Peacock was appointed President of IG’s US region in the summer” said the IG Group senior executive.

“This includes having oversight of our three US businesses, those being Daily FX, that offers high quality news and analysis with 1.7 million unique global monthly visitors, NADEX, our binary options exchange, which serves a demand for retail focused options and IG US, our FX business that launched in Jan 2019” continued IG Group’s senior executive.

“We are particularly excited by the potential opportunity here. We’ve seen early positive signs and believe our brand, high levels of customer service and tighter spreads. As discussed, the US FX market has been historically underserved with 3 providers in the retail margin FX market before IG entered – we estimate there are 90,000 active margin FX traders in the US” continued the member of IG Group’s senior management team.

“As we announced at our strategy day on May 22 this year, we are executing on a growth strategy that includes targeting an increase in revenue of £100 million, to around £160 million in the 2022 financial year from growth opportunities. The US has been identified as one of our significant growth opportunities, in addition to launching new products in the EU, focusing on Japan and Asia and further developing our institutional offering.”

Speaking about Mr Peacock’s leadership of the now unitary US division which includes IG Group US, NADEX and DailyFX, the company explained to FinanceFeeds today “Ian has significant experience and has moved to the US to help drive our US businesses and provide strategic and joined up oversight. We are grateful for everything Tim did during his time with us and wish him well for the future.”

“I would like to point out that this is definitely an exciting time for IG Group and Ian Peacock’s appointment points to our commitment and the great potential we see in the region” explained IG Group’s senior executive.

Yes, indeed it is. FinanceFeeds has been advocating a quality approach to the US market by brokerages who have the capital and credentials for quite some time. For those with the aptitude, it is clearly a destination to take very seriously indeed.

Video: FinanceFeeds advocated a move to the American market some time ago. Following our report, IG were the first to re-enter the market since the mass exodus of brokers in 2011.