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Best FCA Brokers – Full Guide

If you are in the UK and want to trade in a safe and secure environment, we would suggest using an FCA broker. Here we discuss the best FCA brokers currently active in the online investment space.

Before you get to key metrics like fees, commissions, spreads, and tradable assets – you must ensure that your chosen online broker is regulated. At the forefront of this is the Financial Conduct Authority (FCA). While the FCA is a UK licensing body, you don’t need to be a UK trader to benefit from the safeguards it offers.

In this article, we will present the best FCA-approved brokers in the UK ranked by fees, reputation, assets and usability, as well as explain the many protections that an FCA license offers.

What is the FCA?

The FCA (Financial Conduct Authority) is an independent body that regulates the UK financial markets. The national regulator has three key objectives. Firstly, it is responsible for protecting the integrity of the UK’s financial system. This includes key trading markets such as the London Stock Exchange.

Secondly, the body is also tasked with promoting fair and healthy competition between financial institutions. In doing so, this protects the interests of consumers.

Thirdly – and perhaps most importantly, the FCA is responsible for protecting everyday consumers. In the context of online trading platforms, this means that brokers must have your best interests at heart and thus – it ensures you have the capacity to trade in a safe environment.

What Requirements Must Brokers Meet to Be FCA Approved?

First and foremost, it is important to note that obtaining an FCA brokerage license is no easy feat. On the contrary, it can take many months of back and forth auditing to ensure the broker is fit for purpose. By this, we mean that brokers must demonstrate that they have the capacity to meet and comply with the FCA’s codes of practice – as well as wider UK laws.

With that said, once an FCA license is granted, online brokers are required to follow some strict requirements:

  • Anti-Money Laundering (AML): Regardless of where the trader is signing up from, FCA regulated brokers must identify each and every investor that uses its platform. This is why you are asked to upload a copy of you government-issued ID before a withdrawal is permitted.
  • Enhanced Due Diligence: If an individual appears to be trading unusually large amounts – then the FCA regulated broker must perform enhanced due diligence. In doing so, it’s like the broker will request a proof of source of funds.
  • Leverage: In order to protect everyday traders from losing vast sums via leverage, FCA regulated brokers must adhere to the limitations set out by ESMA (European Securities and Markets Authority). For those unaware, this means that your leverage limits will be capped depending on the asset.
  • Annual Audit: All FCA brokers are required to have their books audited by an appropriate body on an annual basis. This is to ensure the broker complies fully with UK laws.
  • Segregated Bank Accounts: To protect everyday traders from a broker collapse, FCA platforms must keep client funds in segregated bank accounts. If the broker does go under, this means that your funds should be safe.
  • Disclosure of Risk: There is no denying that online trading can result in the loss of funds. As such, FCA brokers must make the risks of trading extremely clear. This is especially the case with leveraged CFD products.

Crucially, if an FCA broker fails to comply with the codes of practice listed above, it stands the very real chance of losing its license. This is why FCA stock brokers are highly sought-after by online traders, as they know the platform will operate in a credible manner.

Best FCA Brokers for 2020

The FCA currently licenses a good number of brokers that are active in the online trading space, which then allows us to look at other metrics. As such, below you will find our top-rated FCA brokers of 2020. Not only do all of our recommended platforms hold that all-important FCA license – but they also offer low fees and commissions, tight spreads, heaps of payment methods, and top-notch customer support.

eToro - Best All-Round FCA Broker

eToro is an FCA broker that ticks most boxes. In fact, it's also regulated by ASIC (Australia) and CySEC (Cyprus) - so you've got regulatory protection on three fronts. In terms of what you can trade, eToro allows you to purchase more than 800 stocks outright, and over a dozen cryptocurrencies.

If you're more interested in CFDs, the broker supports thousands of financial instruments across a number of asset classes. This means that you can apply leverage and short-sell your chosen instrument. It takes just minutes to open an account with eToro, and minimum deposits start at $200. You can fund your account with a debit or credit card, bank account, Western Union, or an e-wallet like Paypal.

When it comes to fees, once you are all set up, you can buy and sell stocks, cryptocurrencies, and ETFs without paying any trading commissions. As such, it's only the spread that you need to take into account and a £5 withdrawal fee.

The eToro platform is also our number one choice because it is an ideal option for newbies. Their interactive social trading platform allows beginners to copy the portfolio of experienced traders at the click of a button. You'll then mirror their investments like-for-like at an amount you are comfortable trading.

Our Rating

  • Social trading leader
  • Best mobile trading site
  • Paypal accepted
  • Limited technical analysis tools
  • Not well-suited for the more advanced investor
70% of retail investors lose money when trading CFDs with this provider

2. Plus500 - Best Commission-Free Broker for CFDs

If you've got your heart set on CFDs, Plus500 is well worth considering. The UK-based broker - which accepts traders from over 100 countries, is regulated by the FCA, ASIC, CySEC, and MAS (Singapore). This means that your funds are safe at all times. Its parent company is also listed on the London Stock Exchange.

You can buy and sell thousands of financial instruments without paying any trading commissions, which is great for keeping your investment costs down. Plus500 allows you to get started with an investment of just $100, and debit/credit cards, Paypal, and bank wires are supported. Leverage is available. albeit, you'll need to stay in-line with the limits imposed by ESMA.

our rating

  • Minimum deposit of $100
  • Over 2,000 trading instruments
  • Mobile app available
  • No education material
  • Not suitable for beginners
70% of retail investors lose money when trading CFDs with this provider.

FCA Binary Option Brokers

Got a slightly higher appetite for risk and want to trade binary options?

If so, you’ll be disappointed to learn that since April 2019 – binary options trading is no longer legal in the UK. Not only has the FCA itself banned the process, but it notes that any platforms offering binary options to UK residents are likely to be a scam. Crucially, the FCA has never been responsible for regulating the binary options space. On the contrary, it fell within the remit of the UK’s Gambling Commission.

FCA Mortgage Brokers

In the process of buying a property in the UK market? If so, you’ll be pleased to know that the FCA is responsible for ensuring brokers operate in a fair, transparent, and honest manner.

With that said, our top three FCA mortgage brokers of 2020 are:

  • Habito: Habito is an online-only mortgage broker that gives you access to hundreds of UK lenders at the click on a button. Simply enter your personal requirements and Habito will match you with lenders offering the best deals.
  • Trussle: In a similar nature to Habito, Trussle gives you access to the best UK mortgage brokers in the space. You won’t need to pay Trussle a fee, and the platform makes money when you are matched with a broker.
  • Unbiased: If you don’t like the sound of using an online mortgage broker, it might be worth trying Unbiased. The platform will match you with the best FCA mortgage brokers in your local area, which you can then meet face-to-face.

FCA ECN Brokers

Electronic Communication Network (ECN) brokers give you direct access to financial market participants. In turn, this usually results in more favourable commissions and spreads.

Our top-rated FCA ECN brokers of 2020 are:

  • FXTM: FXTM are FCA regulated CFD and UK forex brokers that offers ECN accounts. Get started with a minimum deposit of just £10.
  • Pepperstone: Regulated by both the FCA and ASIC, Pepperstone offers some of the lowest spreads in the online trading space. Through the broker’s ECN accounts, you’ll have access to thousands of financial instruments.
  • Capital Index: Regulated solely by the FCA, Capital Index is a specialize ECN broker. Deposits start at just £100, and you’ll be able to trade commodities, forex, equities, ETFs, and indices.

Conclusion

With hundreds of online brokers now active in the global investment space, knowing which platform to choose can be difficult. This is why you need to look at metrics like commissions, fees, spreads, and liquidity. However, the most important factor that you need to assess is whether or not the broker is regulated by the FCA. If it isn’t, avoid it.

To help you find the best FCA broker of 2020, we’ve discussed three of our top-rated picks. At the forefront of this is eToro – which not only hosts thousands of financial instruments, but you can trade on a commission-free basis.

eToro: Best UK Stock Broker

Our Rating

eToro exchange
  • Choose from over 800 stocks
  • Buy stocks outright or trade stock CFDs
  • FCA, CySEC and ASIC regulated
eToro exchange
Cryptoassets are unregulated in some EU countries and the UK. No consumer protection. Your capital is at risk.

FAQs

Is FCA interactive brokers regulated?

Yes, Interactive Brokers is regulated by the FCA. With that said, we find the platform somewhat expensive in the fees department, so be sure to have a firm grasp of what the broker charges prior to signing up.

What payment methods do FCA brokers support?

The best FCA brokers of 2020 accept a full range of everyday payment methods. This includes debit/credit cards, e-wallets like Paypal and Skrill, and a local bank transfer.

Why do FCA brokers ask for ID?

One of the key regulations that FCA brokers must comply with is that of anti-money laundering. As such, FCA brokers must verify the identity of all traders that use its platform.

What happens if an FCA broker goes bust?

FCA brokers are required to keep client funds in segregated banks accounts. In doing so, it is hoped that your funds are ringfenced in the event a broker went bust. You should also check the guidance notes offered by the UK's FCSC.

Do FCA brokers offer leverage?

Yes, FCA brokers do offer leverage. However, if you're from the UK and European Union, you will be capped by the limits imposed by ESMA. For example, while you can trade leverage at 30:1 on major currency pairs, only 2:1 is available when trading cryptocurrencies.

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