Whether a financial provider like Internaxx is safe and legit is an important and very legitimate question one can have. After all you trust Internaxx with your investment money and savings. It is also a very common question, we get this asked a number of times.
One thing worth bearing in mind: all the brokers that you find on BrokerChooser are regulated by at least one top-tier authority. So in this basic sense Internaxx is of course legit. Additionally, there are other factors you can take into account when you check the safety of Internaxx, e.g. if Internaxx is listed on any exchange, provide two-step login, disclose transparently its financial result, etc.
Here, we've collected and summarized the common questions on broker safety, enabling you to decide for yourself whether you consider Internaxx safe in your individual circumstances. We also compared Internaxx with two similar brokers.
|Broker listed on stock exchange||No||No||No|
|Annual financial statements on website||No||No||Yes|
|Mobile two-step authentication||No||Yes||Yes|
|Broker ownership transparency||Yes||No||Yes|
|Broker management transparency||Yes||No||Yes|
|Broker is audited by the Big Four||Yes||No||Yes|
Things always worth considering
When you assess a stock broker it's best to think through the following aspects:
- What authority or authorities regulate the broker? In other words who can you turn to if something goes south?
- How much protection do you have?
- For how long Internaxx has been in operation?
- Is it publicly traded itself?
- How transparent is it?
- How much do they protect your account from unauthorized access?
- What auditor audits the brokerage?
As you see there are a number of aspects above. But not all of them were created equal.
We think the most important feature is to be regulated by at least one trustworthy authority.
First and foremost, to gather a wider knowledge about one broker's safety, you should check the regulators of it. For this purpose, we sum up below the most important things to know about regulators and how to interpret them for your individual case.
Internaxx is regulated in the following countries and provide the following investor protection:
|Country of regulation:||Luxembourg|
|Investor protection amount:||€100,000 for cash deposits and €20,000 for securities|
Don't forget that regulators are not created equal. Investor protection can also vary from authority to authority. There are top-tier regulators whose excellence lies within their features such as the presence of segregated accounts, the range of protection tools or the investor protection amount itself. Check out a few of the top-tiers in the table below. Most brokers reviewed by BC fall below one of the following four regulators:
|FCA in the UK||Financial Services Compensation Scheme (FSCS) covers £85,000 of each account's deposits.|
|SEC, FINRA in the US||Securities Investor Protection Corporation (SIPC) covers up to $500,000, including a $250,000 limit for cash.|
|BaFIN in Germany||€100,000 for cash, and €20,000 for securities.|
|ASIC in Australia||No investor protection.|
There are some brokers that provide additional insurance because they have private insurance (e.g.: eToro through Lloyd's, among the US brokers Charles Schwab and Ally have similar setups), which means that you have an extra safety net above the regulatory. It's worth checking it out when you're choosing your broker.
Additional "nice to have" safety features
The subsequent bullet points are rather supplementary, “nice to have” features. Ticking them definitely adds to the safety and legitimacy of an online broker, but not having them is not necessarily a big red flag.
It's a good sign that Internaxx has a banking background, what can be considered as a safety net. Even if it's not required by law that a struggling broker must be saved by its parent bank, in most cases you can count on this happening, so a banking parent is another layer of security.
Broker listed on stock exchange
Internaxx is not listed on any stock exchange, hence it's harder to get detailed or any kind of direct information about its financial performance.
Why is being listed on the stock market useful? For two reasons:
- Listed companies by and large have stringent reporting requirements
- If something really goes wrong with the broker, you'll be able to tell it from the (rapidly falling) share price of the broker in most cases. In this unlikely scenario, you'll have time to move your funds and securities to another broker.
Annual financial statements on website
Internaxx doesn't publish annual financial statements. These are sort of financial reports, which generally contain information about a brokerage's income, profit and loss, retained earnings and cash flows. Not having these exposed to the public doesn't necessarily mean that a broker is not safe or legit, it's just a factor that we should take into account when choosing where to invest or trade.
Mobile two-step authentication
Internaxx doesn't provide two-step authentication when logging in, which is not so pleasing, since it might be easier for hackers to compromise clients' accounts.
Broker ownership transparency
Ownership structure of Internaxx is public, everyone can check the owners of the company on their website, which adds to their safety scores.
Broker management transparency
Internaxx is transparent about their management structure, which means that anyone can see who is in charge of management issues at the brokerage.
Broker is audited by the Big Four
Internaxx is audited by one of the so-called Big Four auditors (KPMG, PWC, Deloitte, EY),which guarantees another depth of safety.
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Now that we have gone through the most frequent and - as we think - most important safety aspects of Internaxx, we hope that you feel armed enough with information for your future decision. In case you're still unsure, use our broker finder and meet the best online broker that suits your needs.