Etoro – The Key Points
Positives:
- Etoro are a fully regulated UK company.
- Customer deposits with Etoro are covered up to £85,000 under the Financial Services Compensation Scheme (FSCS), and all customer deposits have a separate free insurance.
- Etoro are a profitable and stable business.
Potential Concerns:
- Trading is always risky so users must understand the risks before putting in their money
- Etoro allow (and even potentially encourage) users to trade CFDs which is an extremely risky form of trading
What Is Etoro?
Etoro is a trading platform that was first launched in the UK in 2013. They sell themselves as ‘social trading platform’ as users can copy trades from other successful traders on the platform. They have a ‘freemium’ business model that has seen them be very successful in recent years, gaining a large number of customers. Users can trade stocks, shares and ETFs, and also more complex and risky financial instruments as CFDs and cryptocurrency.
Is Etoro Safe – The Details
Regulation:
Etoro are a UK company and as such are fully regulated by the Financial Conduct Authority (FCA).
Protection/Insurances:
Customer deposits with Etoro are covered under the Financial Services Compensation Scheme (FSCS) up to £85,000 per customer, in the event of the company failing.
Etoro provide free investment insurance for all customers from Lloyds of London, which covers customer funds in case of Etoro’s insolvency and for certain types of misconduct.
Investment Risks:
Etoro deal only with trading and investments, and as such, all users must be very aware of the risks of trading. The value of any investment can go down as well as up, and it is always possible that you can lose the entire value of your investment.
In addition, Etoro make a large amount of their revenues from CFD trading and thus will encourage users to try it out. This is a very risky way to trade, as you are essentially making bets on whether the value of an asset can rise or fall. It is possible to lose more than your initial stake when trading CFDs. All users of Etoro need to be highly aware of the risks before trying this trading method. Etoro themselves state that over 68% of retail accounts lose money when trading CFDs.
Company:
Etoro has been running in the UK since 2013, and, as a private company, has been profitable over the last few years. They may be going public at some point in the near future. However, the business in general seems to be stable and in good health.
Data Security:
Etoro do not have access to any of your information outside of your Etoro account. For the account information of yours that they do store, they state that they have state-of-the-art software security and encryption.
Resources:
Check the below links for places you can find reviews, discussion and a more in-depth look at Etoro:
Trustpilot
https://www.trustpilot.com/review/www.etoro.com
https://www.reddit.com/r/Etoro/
Is Etoro Legit?
Etoro are a well regulated trading platform, with a stable business. They have all of the safeguards in place that you should expect from a platform that holds potentially large amounts of your money. Where you should take care, is when investing as investments are always risky. Especially with certain types of investments that Etoro specialize in such as CFDs, users should be well aware of the high risk of losses.