If you’re in the UK and looking for a safe and beginner-friendly trading platform, eToro is a name you should know. With an impressive user base of over 30 million users worldwide, eToro is quickly establishing itself as one of the fastest-growing trading platforms.
When it comes to choosing a trading platform in the UK, it’s important to prioritize security and trustworthiness. Before entrusting your money to any broker, it’s crucial to ask yourself, “Is eToro safe? Can I trust this platform with my funds?” We understand that security is a serious concern, and that’s why we conducted thorough research and due diligence before joining eToro.
In fact, we went a step further and opened personal accounts on the platform ourselves. This allowed us to experience firsthand the safety measures implemented by eToro and assess its reliability. In the following sections, we will share our findings to help you make an informed decision about the safety of eToro as a broker in the UK.
eToro: Everything you need to know
Before we get into the specifics of eToro in this article, it’s important to have an introductory understanding of the key details:
|🏬 Year of establishment:
|FCA, ASIC, CySEC
|💰 Minimum deposit::
|📁 Demo account:
|Yes, free demo account with a virtual balance of $100,000
|Stocks, ETFs, cryptocurrencies, and CFDs on stocks, currencies, commodities, and indices
|📈 Trading leverage:
|1:1 – 1:30
|💻 Trading platforms:
|Web platform and mobile apps (iOS & Android)
|📞 Customer service:
|Email and phone
|🎁 Special features:
|Cryptocurrency trading, social trading, PayPal deposits, crypto wallet, and investment funds
Is eToro legal and safe to use in the UK?
Yes, eToro is a reputable and compliant broker in the UK, regulated by the Financial Conduct Authority (FCA) as a licensed financial services provider. This ensures that eToro maintains transparent and fair business practices, offering high-quality services to its clients. In the UK, the use of the eToro platform as an investment platform is fully legal, and the FCA allows eToro to operate unrestricted in the UK.
eToro provides three levels of protection to ensure the safety of your investments. Here’s how eToro ensures that your investments are in good hands:
- Security through Segregated Accounts: The securities you acquire on eToro are held in segregated accounts. eToro acts as an intermediary in the financial system. Every time you purchase a non-leveraged position in a stock or ETF, you acquire a financial instrument that is owned by you and held in a trust bank. Therefore, if something were to go wrong with eToro, you can transfer your securities to another broker.
- Investor Protection: As an investor in the UK, you will open an account through the subsidiary “eToro (UK) Ltd”, which is a member of the Financial Services Compensation Scheme (FSCS), the United Kingdom’s compensation scheme.. It provides investment protection coverage of up to £85,000 per customer and account.
- Private Insurance: eToro has partnered with Lloyd’s of London to offer free insurance coverage of up to 1 million euros (or equivalent GBP amount). Every eToro investor automatically receives this insurance once they have opened an account.
However, it’s important to be aware that if you opt to trade cryptocurrencies on eToro, it’s essential to understand that cryptocurrency investments do not fall under the same safeguards as other asset classes.
Is eToro regulated?
eToro is a reputable broker that operates under the supervision of trusted regulatory bodies like the Financial Conduct Authority (FCA), the eToro and CySEC, and the Australian Securities and Investments Commission (ASIC), ensuring compliance with eToro regulations.
eToro is dedicated to following the highest legal standards and adhering to the regulations and guidelines set by these regulatory bodies. They prioritize client fund security by maintaining segregated accounts, implementing strong financial and operational protocols, and providing investor protection measures.
Regulatory authorities continually monitor and oversee eToro to ensure ethical and transparent business practices. The platform must maintain sufficient capital reserves and employ effective risk management strategies to protect investors’ funds.
Customer feedback on eToro
eToro has received an outstanding rating of ‘Excellent’ on Trustpilot, with a solid 4.4 rating. The breakdown of ratings reveals that a significant 62% of users expressed their satisfaction by giving a 5-star rating, highlighting their positive experience. While 22% of users expressed some dissatisfaction, the majority of reviewers have a positive outlook regarding eToro’s services.
Customers particularly appreciate the dedication of eToro’s account managers, who regularly reach out to clients to ensure their needs are met and maintain constant availability for support. This personalized approach has garnered praise from users, reflecting their positive interactions with the account management team.
The user-friendly and stable platform offered by eToro has also received accolades from many users, contributing to the overall positive sentiment. While some users expressed a desire for more advanced research and portfolio analysis features, the general consensus remains positive.
In terms of complaints, the main area of concern revolves around difficulties encountered when withdrawing funds. Several instances have been reported where users faced challenges with their withdrawals, despite having fully verified accounts. However, it is noteworthy that eToro takes the time to address these concerns and provide personalized responses to customer queries, displaying their commitment to resolving issues and ensuring customer satisfaction.
When asking whether eToro is safe in the UK, one should consider the outstanding rating of ‘Excellent’ on Trustpilot, the positive feedback from users, the dedication of account managers, the user-friendly platform, and the company’s commitment to addressing concerns and ensuring customer satisfaction.
What financial instruments and features does eToro offer?
At eToro, you can trade a wide range of financial products:
- Stocks: You can trade stocks from 17 different exchanges, including London, Zurich, Amsterdam, Frankfurt, Madrid, Milan, New York, and NASDAQ.
- Cryptocurrencies: Stay informed about specific cryptocurrencies by creating a custom Watchlist and receiving real-time updates. If you’re interested in earning passive income while holding your crypto, explore the staking service to grow your investments over time.
- Commodities: You can invest in commodities such as gold, silver, copper, platinum, palladium, and others.
- Currencies: With eToro you can participate in the forex market by engaging in various currency pairs. The commonly traded pairs, such as GBP/JPY, EUR/USD, and AUD/USD are available along with an additional selection of 40 currency pairs.
- Indices: eToro offers CFD trading with currencies, commodities, indices, stocks, and crypto assets (where available). eToro allows you to invest in all the mentioned asset classes through Contracts for Difference (CFDs), meaning that you can leverage your returns. However, please note that this increases the risk of significant losses.
- ETFs: eToro provides a range of ETFs offered by esteemed asset managers, including iShares, Vanguard, PIMCO, Invesco, Market Vectors, and other prominent providers.
By utilizing the copy trading feature on eToro, you have the opportunity to profit from successful investors. It’s important to note that the minimum investment amount is $200, and you can copy a maximum of 100 traders simultaneously. The smallest trade amount is $1, and you can only copy real portfolios of other traders in the virtual portfolio.
eToro Fees: A comprehensive overview
eToro advertises with a 0% commission on eToro stocks and ETFs. But how does the company finance itself? The answer is comparatively simple, as eToro relies on a clever combination of fees and spreads. As a leading online broker, eToro generates its main revenue through spreads and fees. Unlike a traditional securities account, eToro operates as a trading account that is offered without custody fees.
The cost structure of eToro is relatively moderate compared to other trading platforms and cryptocurrency exchanges in the UK. Account maintenance fees are completely waived, and registration is naturally free. However, it should be noted that there is a $5 fee for withdrawals, which is higher compared to other providers. However, for experienced traders, the presence of fees is a common practice.
The following fees and costs should be considered within the eToro fee structure:
- Spreads: The spread refers to the difference between the buying and selling price of a financial instrument and is a crucial factor in the trader’s costs.
- Commissions: No commissions for stocks and some ETFs. No additional commissions are charged, and there are no overnight fees. However, as mentioned above, every transaction is subject to a market spread.
- Financing fees: For leveraged trades held overnight, eToro charges financing costs, also known as overnight fees. The amount of fees depends on the financial product and market conditions, and they are charged daily.
- Fixed fees: For certain asset classes, such as cryptocurrencies, eToro charges a fixed fee of 1%.
- Deposit fees: eToro does not charge any deposit fees for any deposit methods into the trading account.
- Withdrawal fees: When a trader makes a withdrawal from the trading account to their chosen payment method, eToro charges a withdrawal fee of $5 per withdrawal (the minimum amount to withdraw is $30), regardless of the method used.
- Inactivity fee: After 12 months of inactivity, fees of $10 per month become due.
- Demo account: eToro offers a free demo account that allows traders to try out the platform risk-free and test their trading strategies.
eToro takes great pride in providing exceptional customer support, which has earned them an outstanding reputation globally. With a remarkable rating of 4.3 stars from 17,000 reviews on TrustPilot, their customer support team is known for being highly helpful and responsive. To get in touch with eToro’s customer service team, as a user, you have the option to choose between two main channels: submitting a ticket or initiating a live chat. Both options are accessible through the eToro website and eToro mobile trading app.
Moreover, eToro fosters a vibrant online community for its users to engage with. They maintain an active and official social media presence on platforms such as Twitter, Facebook, Instagram, YouTube, LinkedIn, and even TikTok. These platforms serve as valuable spaces for users to connect, share insights, and stay updated. It’s important to note that eToro’s official social media presence is limited to these platforms, as they are not currently active on Reddit, Telegram, or Discord.
When choosing a support channel, it is advisable to consider two factors: speed and complexity. The live chat is the best option for urgent but straightforward issues. However, if you need to share documents, screenshots, or other detailed information, such as during the verification process, it is recommended to submit a ticket. The average response time for tickets is seven days.
Pros and cons of eToro
eToro does not charge any commissions for trading, and the account opening process is fast and seamless. While the majority of experiences with eToro are indeed positive, there are also critical opinions.
|✔ User-friendliness: The platform is designed with user-friendliness in mind, offering a watchlist and portfolio overview.
|✖ Integration of a crypto wallet: While the platform is well-suited for crypto trading, the seamless transfer to an eToro crypto wallet has proven to be cumbersome.
|✔ Social trading: eToro enables collaborative trading through its Copy Trading feature, which is highly valued by customers.
|✖ Deposit protection: Under the FCA’s and European regulations, deposits are protected up to a limit of £85,000 for UK investors. However, this does not apply to crypto trading.
|✔ Informative website: eToro’s website is modernly programmed, providing multiple explanations about trading risks for both new and experienced investors, along with constantly updated offers.
|✖ Inactivity fee: An annoying fee is charged if the account remains unused for 12 months, deducting $10 per month.
|✔ Wide range of financial instruments:
eToro provides an extensive range of stocks, currencies, digital currencies, and commodities.
|✖ Fees for cryptocurrencies: eToro is not a dedicated crypto exchange, and the costs for pure crypto trading may be cheaper elsewhere in the market. However, the eToro crypto exchange does offer a wide range of tradeable cryptocurrencies that can be purchased with real money.
|✔ Cryptocurrencies: eToro offers access to over 160 cryptocurrencies, including an integrated wallet. The platform also allows trading leveraged crypto CFDs, making eToro both an exchange and a broker.
|✖ Deposits and withdrawals: The platform offers various payment methods, but there can occasionally be delays in processing payments. Additionally, a withdrawal fee of $5 is imposed, which some users may find bothersome.
|✔ Diversification: The eToro app offers a variety of investment opportunities and enables users to follow and replicate the transactions of others.
|✖ Issues with the feed: The website’s feed function displays real-time updates from other users, but there is no control over the content, occasionally leading to spam. This can be frustrating for users as it can be challenging to find useful information.
|✔ Demo account: New traders can quickly familiarize themselves with trading through a demo account and the platform’s dedicated blog.
|✖ Arbitrary trading suspension: eToro reserves the right to suspend trading in extreme situations to avoid user losses. However, this can result in missed opportunities for traders.
|✔ Regulation and security: eToro holds valid licenses issued by the eToro and FCA, the regulatory authority responsible for overseeing financial services firms and markets in the UK. In addition to the FCA, eToro is also regulated by various European and international regulatory bodies, ensuring a trustworthy and secure trading environment.
|✖ Registration and authentication: Some users have had frustrating experiences during the registration process, especially with video identification, which can be slow or faulty at times, leading to interruptions. This can frustrate users, especially during periods of high market volatility.
|✔ Analysis tools: eToro provides a wide range of features, such as charts and analysis tools, to assist in making informed investment decisions.
|✖ Spread betting services: Unfortunately, eToro does not offer spread betting services. However, there are other alternatives available.
|✔ Copytrading: eToro’s Copy Trading feature allows for the replication of successful traders’ transactions, enabling users to profit without extensive research.
|✔ Low Fees: eToro offers an eToro zero-commission policy for pure stock trading, making it an affordable option for those looking to invest in the stock market.
A common question posed by potential users, especially those interested in eToro for beginners, is, “Is eToro safe in the UK?” The answer is a resounding yes, eToro is definitely one of the safest trading platforms in the UK for beginners and advanced traders alike. It offers numerous features that allow users to learn from experienced traders and benefit from their successful strategies. Experience is a crucial factor here, as it provides the opportunity to learn from experts in the field and leverage their knowledge.
With a minimum investment of $50 and a maximum copy limit of 100 traders, eToro is affordable for everyone and allows you to take advantage of copy trading. While there are some limitations, such as the reduced withholding tax rate on US dividends not applying, the benefits of eToro outweigh them significantly. The platform offers a wide range of trading options and a demo account to enter stock trading risk-free.
eToro places a strong emphasis on the safety and security of its users. The platform prioritizes the protection of your personal and financial information by employing advanced encryption technology. This guarantees the security of your data. To enhance security further, eToro offers the option to enable two-factor authentication for your account. This additional safeguard requires a unique code along with your regular login credentials, providing an extra layer of protection.
Moreover, it’s important for you to know that eToro is regulated and licensed by respected financial authorities, including the Financial Conduct Authority in the UK, the Cyprus Securities Exchange Commission (eToro and CySEC) in Europe, the Financial Industry Regulatory Authority in the US, and the Australian Securities and Investments Commission (eToro and ASIC). These regulatory bodies have implemented strict guidelines to ensure that eToro operates with integrity and transparency, providing you with a secure trading experience.
It’s worth noting that eToro has an impressive track record of over 15 years in the industry without experiencing any cyber-attacks or hacking incidents. This demonstrates the platform’s commitment to maintaining high-security standards and gives users confidence in its reliability.
With a core focus on promoting “eToro transparency,” the platform prioritizes open communication and readily accessible information. This dedication cultivates a transparent investment environment, empowering investors to make informed decisions with confidence.
Overall, eToro is undoubtedly one of the safest brokers in the UK when it comes to eToro security and deserves a clear recommendation. Especially for those who want to learn from successful traders and benefit from their experience, this platform, known for its robust eToro security measures, is an excellent choice.
Potential Risks of the eToro trading platform
It’s important to note that trading on eToro involves inherent risks, and no platform can guarantee profits or protect investors from losses. Investors should conduct thorough research, assess risks, and carefully analyze investment decisions. Understanding the fees, charges, and associated risks of trading on eToro is crucial.
By staying well-informed and making wise decisions, investors can confidently navigate the trading environment on the eToro platform.
As a multi-asset platform, eToro enables its users to invest in a variety of asset classes, including stocks, cryptocurrencies, and CFDs.
Trading CFDs is a highly complex instrument that carries a high risk of losing money due to leverage. With eToro, it’s important to note that 76% of retail investor accounts lose money when trading CFDs. Before trading, it is essential to carefully consider whether you understand the workings of CFDs and can bear the high risk of losing your capital.
Past trading results do not guarantee future success. Please be aware that the trading history displayed on eToro covers less than five full years. Therefore, it should be considered as an insufficient basis for making your investment decisions.
Is eToro legit or a scam?
Indeed, eToro is a trusted platform that provides a secure trading environment for cryptocurrencies, stocks, ETFs, and more. A common question that often arises among potential users is, “Is eToro safe in the UK?” Rest assured, with funds stored safely and regulatory compliance from CySEC, ASIC, and FCA, eToro ensures the highest level of security. This assurance allows you to trade on eToro with confidence in its safety and reliability.
Where are my securities held by eToro UK?
eToro UK purchases and holds your securities in a separate account, distinct from its own assets, known as a pooled account. This arrangement ensures that your securities remain protected and are not considered part of eToro’s assets in case of bankruptcy.
Has eToro UK ever experienced any security-related issues?
eToro has a strong track record of maintaining the security of its platform. All information and transactions on eToro are encrypted using the eToro SSL encryption protocol. Additionally, eToro encourages its users to enable 2-factor authentication (2FA) for added security. Furthermore, eToro operates a Vulnerability Disclosure Program on HackerOne, inviting anyone to report any vulnerabilities so they can be thoroughly examined and addressed.
How can you deposit funds into your eToro account?
Deposits and withdrawals can be made through various methods such as instant bank transfer, bank transfer, PayPal, or credit card. Minimum deposit amounts vary depending on the chosen method. When making withdrawals, please note that there is a flat fee of $5 per transaction.
How does the account opening process work?
Opening an account on eToro is a swift process that can be completed within minutes. Initially, there is no requirement for immediate verification. You can start by exploring the platform and trying out trades on the virtual demo account. However, it’s crucial to upload your ID and a bank statement with your name no later than two weeks after opening the account or when you decide to use real money.
How is the eToro user interface structured?
The eToro user interface is designed to provide a user-friendly experience. Upon logging in, you will find your balance displayed along with the latest posts from the social community. A watchlist feature allows you to monitor specific securities. The “Portfolio” section provides an overview of your transactions and associated fees. Additionally, the “Discover” tab enables you to search for various categories such as stocks, cryptocurrencies, indices, and more. You can explore and follow successful traders, and within each category, trending financial products, and market moves are highlighted. Moreover, alongside your actual portfolio, you have the option to switch to a virtual one, allowing you to test the platform without financial risk.
Which regulation is my account under when using eToro in the US?
In the United States, the trading of stocks, ETFs, and options is subject to regulation by various entities including the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). eToro fully complies with all the regulations established by the SEC and FINRA in the United States. The terms and conditions that you accepted while registering specify the relevant entity and regulations that are applicable to you.
How can I get assistance with eToro services?
You can contact eToro in multiple ways for assistance. Use the automated chatbot or live chat for quick responses, open a ticket through the Customer Service Center, or communicate via WhatsApp if you’re an eToro Club member at Gold level or above. Simply log in to your account to access these contact options and receive support.
What are the implications of eToro risks for portfolio copying and risk scores?
eToro provides all users with visibility into their daily, weekly, and monthly risk scores. These risk scores serve as indicators of the level of risk associated with copying your portfolio. If your risk score consistently reaches 8 or higher, there is a possibility that copying of your portfolio may be restricted. Popular Investors have a maximum allowable risk score of 7.
What is the eToro trust score and how is it calculated?
eToro has earned a high level of trust, reflected in its impressive Trust Score of 93 out of 99. When it comes to the question of “is eToro safe in the UK,” this outstanding Trust Score speaks volumes. Unlike publicly traded companies and banks, eToro operates under the authorization of two tier-1 regulators, indicating a substantial level of trust, and one tier-2 regulator, representing an average level of trust. Importantly, eToro does not fall under the jurisdiction of any tier-3 regulators, which are typically associated with lower levels of trust.
The Trust Score, a comprehensive evaluation that measures trustworthiness and reliability, serves as an objective measure of the platform’s integrity. It takes into account factors such as regulatory authorizations, industry certifications, corporate governance practices, and overall reputation. By analyzing and assigning weights to these factors, the Trust Score provides users with valuable insights into the platform’s reliability for trading. This independent assessment aids users in assessing the platform’s trustworthiness and reliability, helping them make informed decisions.
It’s worth noting that there are various platforms and organizations, such as Trustpilot, BBB (Better Business Bureau), and various financial rating agencies, that provide trust scores or ratings for different entities.