A correct market view executed through the wrong venue is still a loss. Before you transfer money to any broker — including one we recommend — run these four checks yourself. None of them require expertise, and all of them are things a legitimate broker will answer without hesitation.
One — find the licence on the regulator's site, not the broker's
Every serious broker displays regulator logos. Ignore them. Go to the regulator's own public register — the FCA in the UK, ASIC in Australia, the CFTC and NFA in the United States — and search the firm's name. Confirm the licence number, the status and the permitted activities. If the register shows a different legal entity to the one on your account agreement, you have found something important.
The entity that regulates the marketing is often not the entity that holds your account.
Two — establish which entity actually holds your account
Large brokerages operate several entities across several jurisdictions. The London-regulated arm carries meaningful client protections; an offshore affiliate may carry almost none. Read the client agreement and find the entity name. Then ask directly, in writing: which entity will my account be opened under, and what compensation scheme applies to it? A firm that dodges this question has told you the answer.
Three — test the withdrawal, before you need it
Fund a small amount, wait a few days, and withdraw it. Note how long it takes, what documentation is demanded at the last moment, and whether the sales contact suddenly becomes attentive. The cost of this test is a few days of delay. The cost of skipping it is discovered at the worst possible time.
Four — read the spread when the market is thin
Advertised spreads are quoted during liquid hours on the most liquid instrument. Check the same spread during the Asian session, and around a scheduled data release. That gap — between the advertised number and the one you will actually be filled at — is the real cost of the venue, and it is where a year of small edges quietly disappears.
- Licence verified on the regulator's own register
- Account entity and its protections confirmed in writing
- A small withdrawal completed end to end
- Spreads observed in thin hours and around scheduled data
Educational use only. This piece is general market commentary published to everyone at the same time. It is not a personal recommendation, takes no account of your circumstances, and must not be relied on as investment advice. Commodity trading carries a substantial risk of loss.