Is eToro safe and legit? Here’s an expert analysis

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eToro is one of the world’s largest social trading platforms and a multi-asset brokerage with millions of clients globally. 

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Is eToro legit? 

 

The broker is regulated by top-tier authorities worldwide, including the FCA in the UK and Australia’s ASIC. It’s safe to say that eToro is not a scam but rather a fully legit enterprise trusted by nearly 30 million people with their funds. 

Remember that brokers reviewed on BrokerChooser are regulated by at least one top-tier authority. We also put together a detailed compilation of brokers and service providers not recommended by BrokerChooser.

 

Is eToro safe?
 

Whether a broker is safe depends on a variety of factors and we looked at most of them to gauge the safety profile of eToro. Based on our analysis of the factors listed below, we think that eToro  belongs in the category of safe brokers. 

 These are the aspects our experts consider when analyzing the safety of a broker: 

  • Is the broker listed on any exchange
  • Does it have a banking parent company
  • Does it provide a two-step login
  • Does it disclose its financial results transparently 
  • Does it provide investor protection 

Check out the following table to see how eToro performs in these categories and how it stacks up against its closest competitors. 

Safety features eToro XTB Trading 212
Banking background No No No
Broker listed on stock exchange No Yes No
Annual financial statements on website Yes Yes No
Mobile two-step authentication Yes No Yes
Broker ownership transparency Yes Yes No
Broker management transparency Yes Yes No

 

Note that the above criteria carry a different weight when it comes to safety. We think the most important feature is to be regulated by at least one trustworthy authority. With CFD and forex brokers, it's also a cardinal question whether they provide negative balance protection.

 

eToro investor protection

 

eToro is regulated in the following countries and provides the following investor protection:

eToro regulation and investor protection
  eToro
Country of regulation: UK, Cyprus, Australia
Investor protection amount £85,000 for UK residents, €20,000 for EU residents, no protection for Australian residents

 

On top of the protection provided by the regulatory authority, eToro offers private insurance to its clients through Lloyd's. The amount is £/$/€ 1,000,000 for cash, securities and CFDs and it applies in the event of eToro's insolvency.

As an additional safety feature, eToro also provides negative balance protection for CFD trading, but only for retail clients from the European Union and Australia.
If you trade cryptos on eToro, you will not be entitled to any kind of investor protection.

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Further reading: 

 

Author of this article

Edith Balázs

Author of this article

Edith is an experienced financial journalist having worked for 15+ years as a correspondent for Bloomberg, Dow Jones and The Wall Street Journal covering macroeconomics, stock, currency and fixed income markets. She holds a master's degree in American Studies and Journalism.

Edith Balázs

Senior Editor

Edith is an experienced financial journalist having worked for 15+ years as a correspondent for Bloomberg, Dow Jones and The Wall Street Journal covering macroeconomics, stock, currency and fixed income markets. She holds a master's degree in American Studies and Journalism.

Everything you find on BrokerChooser is based on reliable data and unbiased information. We combine our 10+ years finance experience with readers feedback. Read more about our methodology

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