Beware! Finmarket 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.
If you take a look at Finmarket website, you will notice that it has all the sign a legit broker would have – is licensed and regulated, provides negative balance protection and is member of the Investor Compensation Fund. However, our task is to verify the legitimacy of this broker and here is what we found out.
Finmarket Regulation and safety of funds
As per the information provided on this broker website, we find out that the company that owns and operates Finmarket is K-DNA Financial Services Ltd. is registered and licensed by the Cyprus Securities and Exchange Commission (CySec), the official body that regulates forex brokers in this jurisdiction.
To verify this fact, we did a search in the CySec register and from the image below you can see that the company is indeed registered and licensed by CySec.
As per the Terms and Conditions document on the company’s website, it appears that Finmarket abides by FINMA regulations and keeps clients’ funds segregated, provides negative balance protection and deducts funds towards the local Investor Compensation Fund which in case of the broker’s bankruptcy will provide each and every client with compensation of up to 20,000 EUR.
It is not only Cypriot brokers that abide by these regulations. They are valid for all EU brokers.
If you want to expand the scope of your research and look up brokers from other jurisdictions, we can tell you that in the UK where forex brokers are regulated by the Financial Conduct Authority (FCA), the conditions for trade are also very favourable. In fact, they are very similar to those of the EU brokers because UK brokers also follow ESMA regulations for forex trade. The major difference consists in the fact that UK brokers must participate and deduct funds towards the local Financial Services Compensation Scheme and the amount of compensation per client is 85,000 GBP in case the broker goes bankrupt.
Finmarket Trading software
Finmarket trades in forex, CDFs, stocks, commodities, indices and cryptocurrencies. As per the information available on the company’s website, the trading software consists of the MetaTrader 4 trading platform, a web trader and mobile trader. The registration of a trading account is a lengthy process and potential clients must answer many questions aiming at verifying their knowledge and experience in online trading with different trading products.
Downloading the MetaTrader 4 platform was not possible for macOS which was disappointing. However, from the information available on the website, we could find that the spread for the EUR/USD currency pair is 0.5 pips. However, if you click on the account types section and look at the spread, you will notice that the higher the initial deposit for the relevant account, the tighter the spread and vice versa. For example, the spread for the Elite account which has the highest initial deposit is 0.7 pips whereas the spread for the account with the lowest initial deposit is 1.6 pips. We want to inform you that spread below the industry average of 1.5 pips is beneficial for traders as the cost of transactions won’t be too high and they will be able to achieve a sustainable profit.
The leverage is within the limits imposed for EU brokers and is 1:30. Such leverage is not too high to present a significant risk for clients’ funds in case of unsuccessful transactions.
We found out that the link for the information regarding the web trader on the company’s website was broken and that is something we are not very happy about. In the image below which displays the web trader offered by Finmarket, you will realise that this is a very simplistic platform with a third-party chart developed by TradingView. Such platform does not offer much to the traders and does not enhance their trading experience.
On the other hand, the MetaTrader 4 trading platform has a lot more to offer despite being considerably old after being launched at the market 15 years ago. MT4 still holds strong thanks to the package of excellent tools and instruments which consist of an auto trading option, an app market, code base with customs scripts, trading signals, VPS, etc. Its charting options are also remarkable and contain a variety of charts, time frames, colours, etc., as well as the option of creating customised templates. In addition to that, the array of technical analysis indicators, such as Fibonacci retracement, Bollinger Bands, moving averages, etc., allow the trader to predict the future direction of exchange rates and make a profit.
Finmarket Deposit/Withdrawal methods and fees
To its clients, Finmarket offers 5 trading accounts – Silver, Gold, Platinum, Diamond and Elite. The minimum initial deposit for the Silver account is $250. The other accounts start at $5,000, $20,000, $50,000 and $250,000 respectively.
We could not find information what the minimum withdrawal amount is. However, should you decide to join in this broker, you must be aware that the company charges 35 EUR/USD/GBP withdrawal fees on all methods of payments. Also, the company reserves the right to change the withdrawal fee. It is useful to know that clients may withdraw via credit card only the amount of the initial deposit and the other withdrawals will be performed via bank transfer.
If a trading account stays inactive for a period of 7 months, then the company will charge a monthly maintenance fee of 30 EUR/USD/GBP for the first year of inactivity. For the second year of inactivity the fee will increase to 40 EUR/USD/GBP and for the third year, to 50 EUR/USD/GBP.