Online Broker Reviews 10/2020

In today’s world, shopping around for the right expert in any area of expertise can seem like daunting task. With so many self-proclaimed experts boasting years of experience coupled with the fact that many experts aren’t exactly who they say they are, the challenge to find the right professional for your needs and goals only grows. Due to this, many people have lost complete trust and faith in different industries.

This exact same challenge exists in the brokerage world. In fact, forex and broker sbcams are such a big problem, many potential traders avoid trading or view trading as a negative activity rather than as a way to leverage and grow their investment portfolio. Additionally, Google is chocked-full of articles and reviews that highlight the various broker scams out there, which doesn’t make it any easier for those looking to get started in trading.

While these broker reviews and scam-exposure articles are helpful, they cannot guarantee that even the most cautious or educated person can avoid being scammed by a broker or brokerage firm at any time. In this detailed article, we broke down the expectations and realities of working with a broker and outline some simple precautions you can take to protect yourself as much as possible.

Best Brokers – Comparison 10/2020

BrokerHighlightsCommissionsAccount Min.Visit
Rank1Broker
0
0.0 rating
(based on 0 reviews)
Read Review
Highlights
  • Beginner-friendly platform
  • Large number of tradeable cryptos
  • Accepts deposits using multiple payments
Commissions
var.
-
Account Min.
$200
Visit
62% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
$200
Min. Trade
$25
Commission
clear
Inactivity Fee
$10 per month after 12 months of inactivity
Overnight Funding
check
Active Trader Discounts
check
Regulation and Reputation
Established
2006
Regulated by
FCA, CySEC, ASIC
Publicly Listed
clear
Bank
clear
Authorised in the EU
check
Trading Platforms
Proprietary Platform
Web Platform
check
Desktop Platform for Windows
clear
Social Trading
check
MetaTrader 4
clear
MetaTrader 5
clear
Deposit and Withdrawal
Bank Wire
check
Visa/Mastercard
check
PayPal
check
Skrill
check
BrokerHighlightsCommissionsAccount Min.Visit
Rank2Broker
4.8
4.8 rating
(based on 5 reviews)
Read Review
Highlights
  • No trading commission
  • Easy-to-use trading platform
  • Over 2000 trading instruments
Commissions
0%
no commission
Account Min.
$100
Visit
76.4% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
$100
Min. Trade
Varies by asset
Commission
clear
Inactivity Fee
$10 per quarter after 3 months of inactivity
Overnight Funding
check
Active Trader Discounts
clear
Regulation and Reputation
Established
2008
Regulated by
FCA, CySEC, ASIC
Publicly Listed
check
Bank
clear
Authorised in the EU
check
Trading Platforms
Proprietary Platform
Web Platform
check
Desktop Platform for Windows
clear
Social Trading
clear
MetaTrader 4
clear
MetaTrader 5
clear
Deposit and Withdrawal
Bank Wire
check
Visa/Mastercard
check
PayPal
check
Skrill
check
BrokerHighlightsCommissionsAccount Min.Visit
Rank3Broker
0
0.0 rating
(based on 0 reviews)
Read Review
Highlights
  • Easy and fast account opening
  • Low trading fees
  • User-friendly trading platform
Commissions
$0 - $2.5
varies
Account Min.
$250
Visit
74-89% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
$250
Min. Trade
0.01 Lots
Commission
From $0 - $2.5
Inactivity Fee
clear
Overnight Funding
check
Active Trader Discounts
check
Regulation and Reputation
Established
2004
Regulated by
FCA
Publicly Listed
check
Bank
clear
Authorised in the EU
check
Trading Platforms
Proprietary Platform
Web Platform
check
Desktop Platform for Windows
check
Social Trading
clear
MetaTrader 4
check
MetaTrader 5
check
Deposit and Withdrawal
Bank Wire
check
Visa/Mastercard
check
PayPal
check
Skrill
check
BrokerHighlightsCommissionsAccount Min.Visit
Rank4Broker
0
0.0 rating
(based on 0 reviews)
Read Review
Highlights
  • Three account types available
  • Quality customer support
  • MT4 and MT5 platforms
Commissions
0%
no commission
Account Min.
$100
Visit
74-89% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
$100
Min. Trade
0.01 Lots
Commission
clear
Inactivity Fee
10% from account balance per month after 3 months of inactivity
Overnight Funding
check
Active Trader Discounts
clear
Regulation and Reputation
Established
2012
Regulated by
CySEC, FSC
Publicly Listed
clear
Bank
clear
Authorised in the EU
check
Trading Platforms
Proprietary Platform
Web Platform
check
Desktop Platform for Windows
check
Social Trading
clear
MetaTrader 4
check
MetaTrader 5
check
Deposit and Withdrawal
Bank Wire
check
Visa/Mastercard
check
PayPal
clear
Skrill
check
BrokerHighlightsCommissionsAccount Min.Visit
Rank5Broker
4
4.0 rating
(based on 1 review)
Read Review
Highlights
  • Award-winning trading platform
  • Good affordability ($10 deposit)
  • Low minimum Trade ($1)
Commissions
0%
no commision
Account Min.
$10
Visit
74-89% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
$10
Min. Trade
$1
Commission
clear
Inactivity Fee
$10 per month after 3 months of inactivity
Overnight Funding
check
Active Trader Discounts
clear
Regulation and Reputation
Established
2013
Regulated by
CySEC
Publicly Listed
clear
Bank
clear
Authorised in the EU
check
Trading Platforms
Proprietary Platform
Web Platform
check
Desktop Platform for Windows
clear
Social Trading
clear
MetaTrader 4
clear
MetaTrader 5
clear
Deposit and Withdrawal
Bank Wire
check
Visa/Mastercard
check
PayPal
check
Skrill
check
BrokerHighlightsCommissionsAccount Min.Visit
Rank6Broker
0
0.0 rating
(based on 0 reviews)
Read Review
Highlights
  • Easy-to-use trading platform
  • Wide selection of different markets
  • 24/7 phone support
Commissions
0%
no commission
Account Min.
$100
Visit
74-89% of retail CFD accounts lose money.
Commissions and Fees
Min. Deposit
Min. Trade
Commission
Inactivity Fee
Overnight Funding
Active Trader Discounts
Regulation and Reputation
Established
Regulated by
Publicly Listed
Bank
Authorised in the EU
Trading Platforms
Proprietary Platform
Web Platform
Desktop Platform for Windows
Social Trading
MetaTrader 4
MetaTrader 5
Deposit and Withdrawal
Bank Wire
Visa/Mastercard
PayPal
Skrill

Brokers 101

A stock broker is a moneymarketsprofessional — they can either be an individual or a firm—and should be knowledgeable and experienced in different types of trading. Clients hire them to buy and sell different types of property and/or assets. Brokers act as a sort of conduit to trading and ensure that you are educated about your investment choices and helps to ensure smooth buying and selling processes. Most industries have a type of broker to assist with and set up transactions and negotiations, but their roles vary depending on the type of industry.

In the trading world, a broker gets paid to manage and advise clients on their investment portfolio and helps them know when to buy or sell stocks as well as currency. A broker cannot guarantee a return on your investment, however, it is their duty to ensure they are educated and knowledgeable about their client’s potential trades. They should know enough about the stocks and investments their clients intend to buy or sell to educate them on the potential risks and gains, and should never try to sway their clients in a certain direction for personal gain.

How are brokers paid?

Depending on the set up a brokerage firm, brokers are usually paid a commission based on the services they are hired for, but are generally paid a set commission percentage for each transaction they conduct. Some individuals may get paid a salary plus commission, but most are paid commission due to the higher earning potential commission usually provides. When you work with a firm, you may pay additional fees in addition to the required commissions.

Are there different types of brokers?

In today’s broker world, there are generally two types of brokers: Discount/online brokers and full-Service brokers.

Discount brokers aren’t a discounted investment advising service, rather, they are in the business of providing the most basic broker services. They aren’t going to do much outside of helping you sell or buy stocks (or other investments) allowing investors to trade from virtually anywhere in the world, whether at home in their pajamas or sipping margaritas on the beaches of Bali, since their services are usually conducted through an online portal.

With this in mind, this type of trading is not generally recommended for someone new to trading, or for someone with limited investment knowledge and experience. If you’re on a budget and want to practice and test your knowledge trading skills, we’ll go over how you can do this a little later in this article.

Full-service brokers are like a full-service gas station—they pretty much offer a full-range of investment and financial planning services. Much like a full-service gas station, they cost much more than an online discount service. Full service brokers are there to advise you on your investments, make investment suggestions, educate you on potential mutual funds, help with retirement planning, and they set up your chosen options for you.

Unlike discount brokers, many full-service firms will only work with wealthier clients and often set a minimum net worth cap on them before they even consider working with them. In contrast, most discount brokers don’t require a minimum investment amount or they set it quite low in comparison to a full-service broker.

Both broker types have their pros and cons, but it more or less comes down to your budget, your goals, your knowledge, and your capacity to trade.

How to Know Which Discount Broker to Use

Most new investors cannot afford to work with a full-service broker, or their trust level for a traditional full-service firm is so low they often envision a tiny penthouse office jammed full of dishonest salespeople and rookie traders, misleading investors and stealing their money. These types of investment firms are altogether a thing of the past because today’s laws are so strict and the industry is highly regulated. In order to be a brokerage firm in any capacity, their employees must be fully licensed and so must the firm.

Discount brokers can be a great way to trade, but as indicated earlier, they don’t necessarily advise you so you’ve got to take the education and the experience side of trading into your own hands, which really is the major key difference between working with a full-service firm and an online one. There are some great online services out there, however, with so many it’s hard to know which one is worth your while.

Here are some things to look out for when researching for a discount broker:

  • Cost – So many discount services charge 0% commissions and this is generally something to look out for when starting out. You also want to avoid paying monthly or annual fees, and look for low trade prices.
  • Low Account Minimums – As previously mentioned, having a low starting minimum is much more attractive for a newbie investor so they can start out slow and gradually increase as they build up their knowledge and account without risking as much.
  • Diverse Investment Options – Having a wide variety of investment options is a great way to increase your knowledge and understanding of how different types of stocks and investments work. This can help you discover your preference or sweet spot for investing. According to research, at least 30 stocks indicates a healthy diverse trading portfolio.
  • Access to a Second Opinion – Some discount brokers offer a second opinion through researchers and screeners, which are generally offered through a third-party service. It is somewhat similar to a full-service broker, however, they are more or less there to help you to better understand your opportunities and options.
  • b – Most online brokers provide 24/7 support agents to help you with your account, when needed. This could be especially helpful if you are traveling and are in different time zones.
  • Immediate Access to Funds – Double check that your online broker firm of choice allows you to withdraw your money without any holds or charges. This service should be free of charge and act almost like a bank account. If it is anything short of either of these, research their policies on this to gain a further understanding of how you can access your money. If you find it confusing, then you may want to keep researching for a firm that has a clear cut policy on how to access your funds.
  • Online Brokers Reviews – If you find a broker service that has piqued your interest, you should check for any negative reviews. If you cannot find much on review sites or their website, try searching for their Better Business Bureau page. You can also call the BBB to further check into their history. It’s important to note, not everyone has the same experience but a large history of negative experiences will help you narrow your list down even further.

Whether you hire a full-service broker or a discount broker, doing your own due diligence and conducting your own research is your best defense against being scammed. Outside of what you find on the internet, you will want to narrow down your choices and add some additional steps to your research protocol, such as contacting each service and asking questions so you can gain a firsthand experience of their services.

You may want to leave messages for brokers or upper management and see what their response rate is like. Once you have them on the phone you can interview them to check their knowledge and understanding. Compare each one as if you were about to hire a new employee to help make the best choice.

These extra measures can really have an impact on your overall experience and help you have the best chance of starting off on the right foot. Broker reviews on the internet alone are not as reliable as you may think and are often based on so many different factors. While they do help to a degree, you will still need to research and compare on your own before settling on the right type of broker for you.

Practice – Why You Should Set up a Demo Account

Unbeknownst to some investors, most online brokers offer the option to set up a demo account, and the reason is a simple one. Doing this allows you to learn and practice with a particular broker without losing any money whatsoever. Opening a demo account could also be considered an additional due diligence step on your part. Let’s say you like the broker of choice, however, you still want to make sure you are confident with their services and what they offer, a demo account acts as a live account so you can do some real-time testing and learning.

Through creating a demo account, you can check their support level while making sure their platform is easy to understand and use. If they offer a third-party research service, then you can test their knowledge and accuracy as you build yours and see how this service has an effect on the overall outcome of your practice trading and investments. If you really are just starting out, a demo account is your best chance at gaining experience without the risk.

With a full-service broker, you can set up a small account and test out their services on a very small scale. This allows you to make some small trades for about 30 days so you can test the waters. In the case of hiring a full-service firm, you can test their withdrawal services to check for churning and other possible brokerage scams. No matter which service you want to work with, there are ways to learn more about what you can expect when working with them.

Is Trading for You?

Trading and investing can be a great way to build up an additional income as well as building a retirement fund for the future. Just because there are some scams and bad brokers out there, doesn’t mean trading isn’t for you. In fact, many people start out small and work their way up from where they are now. In other words, investing and trading isn’t just for the wealthy, it is for anyone who wants to increase their assets and build a stronger financial future.

All in all, you cannot expect to become rich from dabbling or simply by placing your money in a broker’s hands or service. The reality is, you will have to educate yourself no matter what because blindly trusting someone with all the badges, claims, and certificates just won’t cut it. Online broker services are becoming more popular amongst newbies and seasoned investors because they can keep their costs low, they can trade from anywhere in the world, and investors have complete control.