We want our site users to find good brokers to trade through and to be warned off bad brokers. We encourage you to use our complaints tool to let us know about your experiences.
We have categorised the common complaints to make it easier for you and we have provided some guidance on what you may want to try before submitting a complaint, if our suggestions do not provide you with a resolution then by submitting a complaint, our team will attempt to take up your case with the relevant Broker and if needed, submit a formal report to the regulators.
We use the information you give us to decide if we want to continue to promote a broker on our site.
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One thing that the banking crisis brought home to every corner of the financial services sector is that no company is ‘too big to fail’. When it comes to forex, even the largest brokers can be hit with catastrophic losses which deal fatal blows, and this can mean bankruptcy for investors in worst case scenarios. A prime example of this is the Swiss Franc debacle which saw losses racked up in the millions and led to the closure of several large funds.
Choosing a large forex broker
Many people prefer using a large broker for the peace of mind that it can bring, especially if it is one which is traded on an exchange. This type of publicly traded entity is required to publish financial results, and these quarterly updates will bring attention to any situations that might threaten their “going concern” status. This can be extremely useful in flagging up potential problems well ahead of any impact they might have on your investments.
Other brokers which are privately owned are not necessarily obliged to disclose trading information or to share internal operating data with clients, meaning that full transparency might not be possible to gain. This can leave your investments at risk from an ongoing operational perspective and mean that nasty shocks can come out of the blue.
Forex Broker Risks
So is your chosen forex broker is about to go bust? One way to check is to find out if your own country’s domestic regulatory agency requires filings. In the U.S. all forex brokers have to prove a capital adequacy minimum of ₹20 million at the current time. Obviously, if there is more capital than the minimum required this is a good sign.
Forex Broker Red flags
Brokers who are likely to experience problems often show various familiar red flags and these can include a slowdown in execution speed, which sees latency increase. Often, this only comes to like in calm markets. Spreads and re-quotes can also show signs of trouble at hand, so if you notice a slow down of activity here, it is definitely something to keep an eye on.
An unusual deposit request from your broker can also be a big warning sign so, no matter the reason that is given, any suggestion that you need to increase your deposit significantly should be a cause for concern. Likewise, a lack of communication or a tendency for slow responses can point to things moving in the wrong direction. It could mean staff cutbacks have been made or in a worst-case scenario, withdrawal requests might be put off, and this is a sure sign that all is not well.
One strategy to mitigate against your broker going bust is to have a secondary or back up option in place that you can move your finds and investments over to at short notice should you feel enough concern.