Beware! Finaz is an offshore broker! Your investment may be at risk.
RECOMMENDED FOREX BROKERS
Don’t put all your eggs in one basket. Open trading accounts with at least two brokers.
There is nothing remarkable or memorable about the interface of Finaz. It looks just like any other run of the mill brokerages. However, you should ask yourself how safe for your funds it is to trade with this broker. Here are the facts.
Finaz Regulation and safety of funds
In the footer of Fianz website, we find out that the address of the company is in Marshall Islands which is an offshore zone for forex trade. What we can tell you about this jurisdiction is that there is no official financial regulator for forex brokers and practically anyone can register a company via the Internet. It is obvious that joining this broker will put your precious money at risk.
If you are looking for a suitable and reliable broker, we can recommend the well-established jurisdictions of the EU, the UK and the US where there are strict regulations for forex brokers and all precautions are taken to ward off scammers and provide a guarantee for the safety of clients’ funds. For example, EU brokers must have an initial capital of no less than 730,000 EUR which among other things serves to keep scammers out as they will never invest so much money for the benefit of looking legit. In additions to that, as per ESMA guidelines, EU brokers must keep their clients’ funds segregated from their own, report transactions on regular basis, conduct regular internal and external audits, provide negative balance protection, keep leverage for forex currencies below 1:30, etc. To prevent clients from suffering great financial losses in case the broker becomes insolvent, licensed brokers are required to participate and deduct funds towards a local investor compensation fund which provides up to 20,000 EUR per client in case of bankruptcy.
UK brokers, regulated by FCA must fulfil the same requirements as their EU counterparts. The difference is that UK brokers participate in the local Financial Services Compensation Scheme which provides up to 85,000 GBP per client if the broker goes bankrupt.
US brokers are also strictly regulated and they must be really well-capitalised as the amount of the initial capital is staggering $20 million. However, as there are no compensation funds or schemes set up in this jurisdiction, this huge amount of money will serve to protect the clients in case of unfavourable events.
Finaz Trading software
Fianz trades in CFDs, stocks, commodities and indices, forex and cryptocurrencies. The trading software is a web trader which is a rather cheap platform with limited functionalities. From the image below you can get the idea about what the platform looks like. On the left is the menu with trading products, in the middle is displayed the chart of selected trading product which shows the fluctuation in price in a given time frame and on the right are the sell and buy buttons for executing trades. The chart in the middle shows the EUR/USD currency pair and from its bid/ask price we find out that the spread is 3 pips which is really wide. The implications for traders when the spread is wide and is above the industry average of 1.5 pips are that the cost of transactions will be too high and they won’t be able to achieve sustainable profit. Wide spread, on the other hand, is beneficial for the broker who derives its revenue from the spread.
From the information available on the web trader, it appears that the leverage is 1:100 which is also high. As we mentioned already, in the EU and the UK the leverage for forex currencies cannot exceed 1:30 and in the US, 1:50 as a prevention measure against traders suffering significant financial losses amplified by the high leverage.
If you are not knowledgeable about trading software we want to let you on a big secret – there are far more superior trading platforms than a web trader. As a rule of the thumb, legit and reliable brokers offer good quality software. In 80% of the cases, the choice falls on the MetaTrader 4 or MetaTrader 5 trading platforms which are known for the many advantages they offer to the traders. For example, both platforms have an auto trading option, an app market, financial calendar, trading signals, VPS, code base with customs scripts, etc. What also turns the scales in their favour when it comes to the choice of a trading platform is the variety of charting options and technical analysis indicators which are at disposal to the traders to help them predict the future direction of exchange rates and make a profit.
Finaz Deposit/Withdrawal methods and fees
Finaz offers 4 trading accounts – Classic, Gold, Platinum and VIP. The minimum initial deposit for the Classic account is $250. The other accounts start at $3,000, $15,000 and $50,000 respectively.
There are no deposit or withdrawal fees and for their payments, clients can use a bank wire, credit card or Skrill. However, it takes 2 to 7 business days to process a deposit.
The broker charges a monthly dormant fee of $100 for trading accounts that stay inactive for over 45 days. Also, as per the company’s rules, the use of the auto trading software is free except in the case when the trader has deposited fund and registered to use the auto trading software but wishes to close the account and withdraw the funds before trading a minimum of 20 trades with the software. In such a case, there is a fee of $100 for using auto trading software.
From our research of non-legit and dodgy brokers, we find out that they usually offer bonuses. Fianz is no exception. To some traders, bonuses look quite tempting as it seems that they add extra trading power. However, what you need to remember is that these are funds belonging to the broker, not the trader, and as you can well imagine the former won’t be too willing to part with such funds. So, what happens is that usually, bonuses are subject to some hard to fulfil requirements. In this case, should you accept a bonus from Finaz, you will be required to execute a minimum trading volume of $10,000 for every $1 of the bonus before being eligible to withdraw the bonus amount. We do not think that this will be easily achievable and advise our readers not to accept any bonuses. Besides, you should be aware that legit brokers are banned from offering bonuses or other incentives and this is how you can differentiate them from the non-legit ones.
How does scam work?
A lot of people get scammed every day, not because they are naive or stupid, but because scammers are inventive and they are masters of manipulation. Often, as you scroll up and down on the Internet or social media, you come across ads for a quick and easy profit which sometimes sound too tempting not to fall into their traps. So you deposit some money into the account and what happens next is the incessant calls of the scammers. First, they congratulate you for taking the first steps towards becoming rich and next, they try to convince you to invest even more money into their ‘profitable’ business. What you probably don’t know is that your money has just gone as a commission to some scammers. And so, you wait and build the sandcastles of your dreams for a better and ‘richer’ future. And you wait, and you wait, for the money to come. But where is it? Now is your turn to call the scammers and to ask what’s going on. They try to placate you and ask you to be more patient. But have had enough and all you want is to get your money back. The scammers kind of promise, but now they are asking you to provide this document or fill out that form, etc., etc., all done in an attempt to delay you from filing for a chargeback.
What to do if scammed?
If this happens to you, our advice is to act immediately and if you have paid your deposit via credit/debit card, to file for chargeback which is retroactive cancellation and refund of your previous transaction. Visa and MasterCard give you 540 days time limit to file for chargeback which gives you a fighting chance to recover your money.
However, if you have used bitcoin or bank wire for your payment, the chances of you recovering your money are really slim.
Whatever you do to recover your funds, beware of the so-called recovery agents. Please make sure that you are dealing with a genuine one by checking their credentials and company’s information transparency. Otherwise, you may fall victim to another form of scam.
Cancelling your credit/debit card in case you have given the scammers your CVV code may be another good idea. Also, make sure to remove from your PC any software that my give scammers access to your private data stored on your computer.