How We Conduct Our Broker Reviews
- Conducting our broker reviews
- What our experts assess
- Testing Technology
- Testing Browsers
- A summary of the broker’s services
- Regulation and general information
- The platforms and user tools
- Fees and commissions
- Trader Education
- Customer Service
- Overall Summary
- How Do We Score A Broker
- Broker FAQ’s
- Broker How-To Guides
Conducting our broker reviews
We perform a broker evaluation with one object clearly in mind; to provide you with all the information required to make an informed decision about which broker you wish to use. Our opinions are unbiased and our conclusions are based solely on the facts we discover during our research.
We look at strengths and weak points in the areas of fees and commissions, leverages (gearing – in the UK, where money or financial instruments are borrowed to boost the potential return on investment), and spreads (the gap between bid and ask prices). We also assess tools, the platform, education facilities, research, and, very importantly, regulation and customer support. A test of the broker’s trading platform is performed by opening an account so that we can assess ease of use and effectiveness.
What our experts assess
Our researchers are very experienced and they understand what an end-user needs and expects and, indeed, should receive from a reputable broker. During their analysis, they probe for weaknesses, identify strengths, investigate the opportunities provided for users and detect any potential threats. Of course, some brokers are more suited to serving one kind of investor over another. In that regard, particular attention is paid to the suitability of the service for those just starting in the world of investing and the facilities available to the more experienced investor. Online brokers vary considerably in what they offer and they often specialise in certain areas of investment and trading. Comparison must play a part, so our experts compare competing platforms and services to point out benefits and to identify areas of underperformance.
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A summary of the broker’s services
The summary that we prepare provides information about how the online broker is regulated on an international basis. A comparison is also given about how the business ranks against the competition in the sector. We report on:
- Leverage and spreads
- Commission fees
- The efficiency of the trading platform
- The educational tools provided
- Deposits and withdrawals
- Asset classes covered
- The quality of customer support
Regulation and general information
We cover in detail the regulation to which the broker is subject. Some are overseen by more than one authority, mainly when a broker operates on an international level. Also, the operational base of the online broker is given, and the owner(s) are identified.
It is also of interest how long the broker has been operating and whether there have been any problems reported by regulatory authorities or the users. The number of clients using the site is also ascertained because it is a useful guide to its efficacy and popularity.
Leverage as a strategy for investing is in common usage. It is a way of financing investment by borrowing financial instruments or funds as a way of, hopefully, increasing profits. It is often done via a contract for difference (CFD). It can be a risky strategy and is best avoided by a novice investor. It is estimated that a considerable proportion of trades involving CFDs end with losses rather than gains. However, many online brokers offer the service to clients. It varies in degree between brokers and the availability and leverage levels are determined by the type of account opened by the client. It is often the case that investors will look for a broker offering high leverage rates.
We identify brokers that have a good reputation regarding leverage, particularly those that have been providing the service for a long time. Brokers that tend to innovate often offer the most favourable terms for those interested in using leverage for their trading.
The platforms and user tools
The platform and the tools provided is an essential aspect of a broker review because the findings have a significant bearing on user experience. The platform must be easy to navigate and use and should preferably have a mobile trading function via an app. The app is available via Android, Apple or Microsoft Windows. It is preferred that the platform should have been in use for a minimum of two years and that customer support must be easily accessible if problems arise for a user. Also, one of the most important factors when using an online broker is how long it takes to process deposits and withdrawals. Three days is regarded as an acceptable time.
Brokers now offer a range of trading tools for clients that are assessed as part of our reviews. They often include:
- Virtual trading
- Watch lists
- Advanced charting
- Level 2 quotes
Fees and commissions
How much will it cost? Charges are a vital factor and we cover them fully in reviews. For some traders, it will be a decider when choosing which broker to use. It can be a complicated subject, but it is necessary to have an understanding of how the orders you place are executed and how they are routed. We provide an insight into spreads between bid and offer and buy and sell of the assets available for trading. With assets that are more liquid, such as with forex trading, it is not difficult to compare and assess the spreads. Conducting a comparison of brokers in that regard allows for meaningful competitor analysis.
A review also includes the study of the spreads of assets and currencies that are less well known. Often, this is where we find considerable differences in the range of fees and underlying commissions levied by brokers. With cryptocurrencies, equities and commodities, many reviews establish that the terms offered are very uncompetitive. That is why we run a test via a broker’s demo account. Doing so allows us to fully understand how a particular broker compares with its competitors regarding the fees it levies.
Most brokers have an educational facility on their platform. The quality can vary greatly. Although not directly linked to the broker services, we do feel it is essential to cover this in reviews. Intended mainly for beginners, the content gives tips and advice on trading techniques and what is possible and available when using the platform. Some brokers provide a social element so that clients can monitor or even mirror traders that are more experienced. They might also allow their clients access to market research information and learning centres.
As part of the learning process brokers provide trial demo accounts for beginners where trading can be practised without using real money. These are a valuable learning tool and should always be utilised by someone embarking on their first foray into trading. The quality of the demo accounts is assessed during reviews.
We all know how frustrating it can be at times to contact an online business. That is why we regard the quality, reliability and availability of the customer support and contact services provided by brokers as being extremely important. The norm should be a five day a week service that operates over 24 hours. A phone number should be given and an online chat function provided. The availability of quick and easy contact can be crucial if there is an urgent query about a trade.
The respected well-established brokers offer high-quality customer support. There are often queries around setting up an account, funding and withdrawals. We emphasise our findings on the range of payment tools provided by a broker.
As shown above, a comprehensive broker review covers many vital factors that allow the reader to assess its services compared with those of other providers. Our enquiries and the testing we conduct on platforms enable us to publish an unbiased opinion on the suitability or otherwise of individual online brokers. That assessment of suitability takes into account the level of experience of an investor, the range of assets available to trade and the fees and commissions levied. We can identify what we consider to be the market-leading online brokers; also those that do not offer the level of service we would expect to see.
It is vital to establish the degree of regulation to which an online broker is subject. Knowing that the supervision and control are robust gives investors and traders confidence that the business is run within a legal framework designed to protect their interests. Who owns and operates the online broker is also a factor when looking at a company, particularly one that is new to the market. Details of contacts, addresses and information about the countries in which the broker operates should always be displayed on the website. We are aware that location can affect regulation; that is why we cover that aspect.
Cybersecurity is always an issue with websites, and broker sites are no exception. We know that no website can ever be regarded as being 100% safe against determined hackers, some of whom these days are state-sponsored. If the level of security of a site gives us a degree of concern, we will include that in our review. Fortunately, most websites are now as secure as technology allows.
What happens if an online broker encounters financial difficulties? That question is always answered in our reviews. How clients are protected if regulators sanction a broker or, in a worst-case scenario, it becomes insolvent, is vital information. That is why we investigate this element in depth. We dig deep to ensure that we have a thorough understanding of the level of protection a client can expect if the worst should happen.
How Do We Score A Broker
We Operate a stars system to allow a snapshot overall score for you however we encourage you to understand how we score.
|Review Section||How It Contributes|
|Services & Instruments||15%|
|Platform & Tools||10%|
|Ease of Use||20%|
|Commissions and Fees||15%|
Checking the frequently asked questions section of a broker’s website is essential when conducting a broker review. They can help with assessing the competitiveness and the credibility of an online broker. All the basic questions should be answered in-depth so that there is no misunderstanding. Full details should be given about fees and commission charges. Other FAQs should cover the tools available and the use of the platform.
Broker How-To Guides
Our reviewers look at the most important processes with specific brokers to see if we can provide step by step guides for instruction such as fund withdrawal, how to make a trade etc.