Pepperstone Review 2017


  • World class customer service
  • Competitive spreads and pricing
  • FCA regulated (UK)
  • Non-transparent funding cost/interest rates
  • Limited research
  • Only third party trading platforms

Pepperstone Review Summary

 

We recommend Pepperstone for begginer and high volume FX traders.

Pepperstone is a young Australian FX broker, regulated by the FCA and the ASIC, they have recently opened offices in London to better serve their UK/EEA clients. 

Pepperstone offers very competitive rates compared to other FX brokers. It's website is well designed and easy to navigate, and their customer support is excellent. Fully digital, easy account opening makes for a great user experience. 

At the time of our Pepperstone review, they offer over 80 currency pairs, whcih is a good amount for an FX trader. However, Pepperstone has a limited portfolio of other products.

It uses third-party trading platforms, web and downloadable trading clients are available for Pc and Mac, and moblie versions for iOS and Android devices. 

Scroll down for the full Pepperstone review.

Pros
  • No account balance minimum
  • More account base currencies
  • Several account deposit opportunities
Cons
  • Long, 4-5 days account opening time
Pros
  • Both Metatrader 4 and cTrader are available
Cons
  • Only third party trading platforms
Pros
  • 24/5 customer support
  • Very responsive, good quality customer service
  • Dedicated account manager
  • Phone, live chat and email support
  • Customer service in English, Spanish, French and Arabic
Cons
  • None
Pros
  • Competitive overall pricing plan
  • Competitive forex spreads
  • No inactivity fee
Cons
  • Non-transparent interest rates (funding cost)
  • High deposit and withdrawal fees in some cases
  • High, 1% currency conversion rate
Pros
  • None
Cons
  • Very limited research
  • Forex
  • CFD (equity index, commodity, cryptocurrency)

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Complete Pepperstone Review

 

Gergely Korpos, 13 November 2017

 

Pepperstone is a foreign exchange online trading platform founded in 2010 in Melbourne, Australia, set out to create a faster, technologically more advanced forex trading platform with an increased focus on customer support.

“Pepperstone Limited is an execution-only forex and CFD broker that provides trading solutions sophisticated enough for veteran traders, yet simple enough for less experienced traders.”

BrokerChooser’s Pepperstone review contains the following sections:

 

Pepperstone review
Overall 3.8
Account protection ★★★★☆
Account opening process ★★★★★
Money transfer and withdrawal ★★★★☆
Product portfolio ★★☆☆☆
Fee structure ★★★★☆
Trading platform  
Web platform ★★★★★
Mobile platform ★★★☆☆
Desktop platform ★★★★★
Research ★★☆☆☆
Customer service ★★★★★

 

Pepperstone's key function is foreign exchange trading, thus technology plays a key role in their execution. Pepperstone takes the edge by setting up their main servers within a few miles of Wall Street, cutting their latency (delay in internet speed) below their competitors. In 2016, Pepperstone Limited was founded in London, in their efforts to better serve their EU clients, and to continue their objective of becoming the world's top online forex trading company.  Pepperstone is a privately owned company. The ownership is divided amongst three major stakeholders, Champ Private Equity, who purchased most of the business in 2016, and the two founders, Owen Kerr and Joe Davenport. According to Pepperstone, currently they serve over 75,000 clients worldwide.

During the 2015 Swiss National Bank related forex crisis, Pepperstone was able to avoid losses by using foresight, and their high-speed technology. Before the crisis happened, Pepperstone warned against the possible dangers, discouraging clients from taking excessive leveraged positions on the Franc, they accomplished this through enforcing position caps and limiting the leverage on said accounts. For clients who did have an exposure to the news, Pepperstone’s systems liquidated the positions in less than a second, which allowed them to close any position before they went into negative balances.

For our Pepperstone review, we tested the Standard Account.

 

Pepperstone review -

Investor protection and regulation

★★★★☆

Your security with a broker is one of our key concerns when writing a review. We believe that a comfortable and trusted trading environment can only be achieved through the knowledge of where your funds are held and managed. First and foremost, we would like to point out that Pepperstone serves under two legal entities:

 

  • Pepperstone Limited:
    • Services UK and EEA accounts
    • Regulated by the FCA
    • FSCS protection up to 50,000 GBP per person
  • Pepperstone Group Limited:
    • Services accounts created outside the UK and EEA
    • AFSL (Australian Financial Services License) holder

 

Pepperstone Limited is licensed by the FCA, the UK regulatory body. This alone provides a stringent and in-depth review of their operations, and allows for comfort in the security of the business. When choosing to trade on Pepperstone from the UK or EEA, your account funds are held on segregated accounts with Barclays Bank. Pepperstone Limited is protected by the Financial Services Compensation Scheme Protection (FSCS), which provides protection up to 50,000 GBP per person or per firm in case of the firms default or insolvency.

Opening from outside the UK and EEA, Pepperstone Group Limited is regulated by the ASIC, the Australian Securities and Investment Commission, and hold an Australian Financial Services Licence (AFSL). Whilst the ASIC does not require coverage of financial compensation, Pepperstone Group Limited is also reviewed regularly under strict standards of the Australian Securities and Investment Commision, and audited by the independent auditing company, Ernst & Young. All accounts opened with Pepperstone Group Limited are connected to segregated bank accounts with the National Australia Bank.

It must be noted, in order to minimize potential risk, Pepperstone Group Limited (accounts made outside the UK and EEA) are monitored by their internal risk management system, that follows certain positions to mitigate risk. Furthermore, Pepperstone does not hedge all of the positions, but rather relies on this internal risk management software. The Pepperstone MT4 and cTrader platforms have a built-in automatic stop-out system, that protects against potential critical losses. All Pepperstone accounts have access to these trading platforms, no matter where they were registered from. However, it must be noted that the stop-out system does not guarantee that your account will not go into 0; as an ECN trade execution depends on market liquidity and pricing.

 

Pepperstone review -

Opening an account

★★★★★

Who can open an account?

 

At the time of our Pepperstone review, users from most countries can open a Pepperstone account.

Accounts may not be opened from the following locations:

 

  • United States of America
  • Canada
  • New Zealand
  • Japan

 

Additional countries not allowed to open an account: Burma, Côte d’Ivoire, Democratic People's Republic of North Korea, Democratic Republic of the Congo, Eritrea, Former Federal Republic of Yugoslavia, Iran, Iraq, Lebanon, Liberia, Libya, Somalia, Sudan, Syria, and Zimbabwe.

 

Accounts may be opened and funded with the following currencies:

 

  • United States Dollar (USD)
  • British Pound Sterling (GBP)
  • Euro (EUR)
  • Swiss Franc (CHF)
  • Polish Zloty (PLN)

 

Pepperstone review -

Account Types

 

During the time of our Pepperstone review, the two available accounts were the Standard Account and the Razor Account.

Pepperstone-review-account-types

The Standard Account poses no commission, however, it uses built in 1.0 pip spreads, this means an additional cost which is set between the user and interbank rates. This is the account we tested during our Pepperstone review. Leverage can be set between 1:1 to 500:1 when creating the account, we found it to be a bit misleading that the base leverage is set to 500:1, we think this could potentially confuse some rookie investors. The Standard account does not have a minimum balance, it can be opened for free, and the user can decide how much to fund later.

The Razor Account allows for spreads as low as 0.0 pips. The commissions on the trades are very low as well, for every 100,000 volume traded, it costs only $3.5 AUD. Furthermore, hedging and scalping are also available on this account, with ratios up to 500:1. The account can be opened with as little as $200 AUD, with many potential benefits for high frequency forex trader.

Two further accounts must be noted here, there is an opportunity to sign up for The Active Trader Program, and there is also a possibility for an Islamic Account.

Think of the Active Trader Program as a frequent flyers club. To gain access, trade at least 200 FX lots per month, this gets you access to the following benefits:

 

  • Dedicated Relationship Manager: have a personal manager to help achieve your trading goals.
  • Extensive reporting: Tailor made reporting, to get the most out of your numbers
  • EDGE Hosting services: to take advantage of Pepperstone’s low latency
  • Custom trading solutions: Trade on a large selection of platforms and solutions

 

You will also receive a deduction from your commission per trade:

 

  • Level 1: 200 lots @ $1
  • Level 2: 500 lots @ $1.50
  • Level 3: 1500 lots @ $2
  • Level 4: 5000 lots @ $3

 

Per example, the normal commission is 7 AUD per lot, after trading 200 lots, the commission will decrease to 6 AUD per lot.

 

The Islamic Account is available for people following Sharia Law. This account is in full accordance with religious practices of the Muslim religion.

Pepperstone review -

Account Opening Process

 

During our Pepperstone review, we found that opening an account is as easy as it comes, it is fully digital and very nicely presented, in a organised, concise manner.

Here is how:

 

  1. Register your email and password, confirm your email, and you advance on to the Secure Client Area
  2. Fill out your personal information, and set the currency and leverage limit of your account     (1:1 - 1:500).
  3. Complete a short survey regarding your trading expertise. (Your experience may vary from beginner to expert.)
  4. Upload a copy of your passport/ID, and a utility bill or some other proof of address. (On Pepperstone, having a notarized passport will exempt you from having to upload a proof of address.)

Pepperstone-review-account-opening

The process is very straightforward and takes roughly 10-15 minutes to fill out your application.

Pepperstone review the application, this may take longer, for us it took 4 business days to receive the confirmation. We believe that this should be faster.

You will find that their e-mail assistance during account opening is excellent, you can also get help through the live chat, or even send them the copies of your ID/Passport, and they will upload it for you.

 

Pepperstone review -

Funding and Money Withdrawal

★★★★☆

Funding your account at Pepperstone could not be easier. Within your Secure Client Area, there are many options to choose from:

 

  • Credit/Debit Cards
  • PayPal
  • POLi - Instant Bank Transfers
  • China Union Pay
  • Bank Transfer
  • BPay - Australian fast bank transfer
  • Skrill (Moneybrokers)
  • Neteller
  • Qiwi
  • Fasapay
  • Broker to Broker transfer

Pepperstone-review-funding-options

Please note that the available funding types will be available depending on the origin of your account.

Whichever funding option you choose, the transaction time and associated fees to the payment method will be displayed in your Secure Client Area account, making it very easy to understand and evaluate your best option.

With our tested account Pepperstone does not differentiate on fees, as there is no commision on any funding options, the times do vary:

 

  • Bank Transfer: 24-48 hours
  • Credit/Skrill/Neteller/etc.: Instant, 24 hours a day

 

Withdrawing your funds is very straight forward as well:

 

  1. Request a withdrawal in your Secure Client Area
  2. Confirm your request in the email that is sent to you
  3. The withdrawal will typically process within 48 working hours
  4. In the Secure Client Area, you can follow the status of your withdrawals, and see your withdrawal history as well.

Pepperstone-review-withdrawal

We received the withdrawal confirmation within 24 hours of the request, the funds arrive within 5 working days to the originating account.

 

Pepperstone review -

Product Portfolio

★★☆☆☆

 

At the time of our Pepperstone review,  the two available products were Forex and CFDs.

 

Forex

With over 80 currency pairs, Pepperstone offers a wide range of forex trading possibilities. This is a great amount, above their competitors. They offer major and minor pairs, and also some exotic pairings.

Offering a flexible leverage up to 500:1, Pepperstone offers you a low latency, high quality execution on forex trades.

 

CFDs

Stock Indexes

Offering 13 major global stock indexes to trade as CFDs. Including AUS200, US30, HK50, Japan 225 and the GER30 amongst many others.

Cryptocurrencies

At the time of our review, Bitcoin may be traded with a 20:1 leverage against the USD, without the need for a hash wallet, as Bitcoin is traded as CFDs.

Commodities

Precious metals (Gold, Silver, Platinum, Palladium) are available in 6 different kind of pairings against USD and EUR.

Energy commodities, such as two types of Oil (Brent and US oil) and US natural gas may be traded against main currencies, with leverage up to 500:1.

Soft commodities, such as Coffee, Sugar, Cocoa, Cotton, and Orange Juice may be traded.

 

Available CFDs
Stock Indicies Commodities Cryptocurrencies
AUS200 (Australian) XAUUSD (Gold) Bitcoin
EUSTX50 (European) XAUEUR (Gold)  
FRA40 (French) XAGUSD (Silver)  
GER30 (German) XAGEUR (Silver)  
IT40 (Italian) XPTUSD (Platinum)  
JPN225 (Japanese) XPDUSD (Palladium)  
SPA35 (Spanish) XTIUSD (US Oil)  
UK100 (United Kingdom) XBRUSD (Brent Oil)  
US500 (USA) XNGUSD (Natural Gas)  
NAS100 (Nasdaq) Cotton  
US30 (USA) Sugar  
HK50 (Hong Kong) Coffee  
US2000 (USA) Cocoa  
CN50 (China) Orange Juice  

 

Pepperstone review -

Fee structure

★★★★☆

During our Pepperstone review, we found that they offers some of the most competitive pricing plans on forex trading, that is a big advantage when you are a frequent trader.

Trading fees are transparent, but gathering together the non-trading fee information is not a peace of cake. This is especially true for the financing cost (applies interest rates) for the swap calculation.

Pepperstone is our first broker, where we could not find any information on interest rates, so we couldn’t compare with other forex brokers.

Trading fees

Pepperstone offers competitive rates for both of their main account types. Whilst the Standard Account is commission free, the Razor account offers lower spreads and reasonable commissions.

While the Standard Account is commission free, it has higher spreads, thus less competitive for frequent traders. 

Usual spread, pips Pepperstone Standard Account Oanda Saxo Bank
EURUSD 1.16 1.2 2.00
NZDUSD 1.53 1.6 4.00

If you trade with higher volumes worth checking the Razor Account, that offers interbank spreads and a 3.5 AUD/lot commission. The spreads of the Razor Account can be as low as 0.0 pips.

Non-trading fees

The good news is that while having a Pepperstone account, you do not have to count with too many non-trading fees. Pepperstone does not charge any account or inactivity fees.

As already described the financing cost information is not provided at all, you can have only the actual swap rates within the platform. This is not transparent at all and Brokerchooser does not understand what is the reason for this.

Whenever a conversion happens, Pepperstone may charge a conversion fee of up to 1%. Conversions can happen in two cases. First, when you deal with a contract (e.g. FX pair) denominated in a currency other than AUD, USD, NZD, GBP and EUR.

Non-trading fees
Account fee No
Inactivity fee No
Conversion fee Yes
Financing cost Yes, not transparent
Deposit fee In some case
Withdrawal fee In some cases

Withdrawal and deposit is usually free with Pepperstone, but in some cases, you will be charged. Standard Credit / Debit Card deposits will cost you a 1.8% fee for AUD deposits and a 3% fee for all other currencies. The Qiwi funding method has a 3% cost.

On the withdrawal side, Skrill has a fixed $1 fee, while international Bank Wire withdrawals will cost you a $20 fee. Bank Wire withdrawals within Australia in AUD is free of charge.

 

Pepperstone review -

Trading Platforms

While reviewing Pepperstone, Brokerchooser used the cTrader trading platform for providing a review scores on the trading platform and Pepperstone.

Pepperstone does not have its own trading platform, but offers two popular third-party trading platforms:

Pepperstone-review-trading-platforms

 

Pepperstone review -

Web Platforms:

★★★★★

 

cTrader offers a fast and reliable online interface. Basic order types (market, limit, stop-loss, stop limit, trailing stop) are all available. There is a good search function, customizability is easy with drag-drop features and multiple view options. Alerts and notifications are available, and easy to set up. Fee reports may be downloaded or printed in a clear format. Overall, the web platform of cTrader has a great visual representation, is very stable and user friendly. 

Pepperstone-review-ctrader-web

 

Pepperstone review -

Mobile Platforms:

★★★☆☆

cTrader's mobile platform can be downloaded from the Appstore for iOS, or from the Google Play store for Android.

Brokerchooser felt that the mobile platform needed development. Some of the functions are not intuitive, the user interface felt incomplete. Our best guess is that cTrader wished to include all of the available options from their web platform, but this made the app cluttered and hard to use in some places. Furthermore, no push notification is available for iOS, therefore the app can only alert you via e-mail. 

Pepperstone-review-mobile-3

 

Pepperstone review -

Desktop Platforms:

★★★★★

cTrader offers a desktop platform, currently only available for Windows. The functionality, and quality matches the web based interface. Traders may download the executable file from the Secure Client Area. 

 

Pepperstone review -

Research

★★☆☆☆

Pepperstone offers limited research options on their website. A weekly market research post details forex trends and investing opportunities. The FX Lounge offers blog-style articles on their website include basic investment strategies and investing tools. Aimed mostly at beginner traders, these blog and article posts lack depth and critical analysis. Furthermore, these resources are not well presented on the website, they are hard to get to, which begs the question why it is not better advertised, perhaps it is still under development.

Pepperstone-review-fxlounge

 

From the Secure Client Area two trading tools are available. Autochartist, a pattern recognition and risk calculating addon for Metatrader 4. Which gives you automatic pattern recognition on your chosen graphs. You may download Autochartist if you are running Metatrader 4 on a PC, no Mac or online version available to date.

You may also subscribe to Pepperstone’s daily market reports email, you can choose between daily or weekly reports, and you can specify which markets you wish to include (US,EU,Asia). As an added benefit, you can launch trades via links from the body of the email, that re-directs you to your Metatrader 4 account.

Pepperstone-review-daily-reports

Three basic calculators are built into the Secure Client Area. A profit, a margin, and a pip calculator. Honestly, these calculators alone seem to be little to no use, and they are well hidden. Perhaps they are still under development, or it was a result of a midway-cancelled project.

 

Pepperstone review -

Customer Service

★★★★★

Brokerchooser found the customer service to be very responsive, good quality, and highly efficient. Online chat is available throughout the trading days, 24 hours a day. We did not have to wait for an operator, and the transcripts of the conversations can be sent to your e-mail, which can be quite useful in case you need to revisit a solution. You are also prompted to evaluate the chat with a simple thumbs up or down followed by an optional comment field, making it easy and efficient to give feedback.

The support team was very responsive to emails as well, with the average response time of 4-5 hours. Their answers were clear and concise, with relevant information and links attached. You did not get the ‘template’ treatment, the answers were tailored directly to your question.

Phone support is also available 24 hours a day, they speak English, Spanish, French, and Arabic. The support person informed Brokerchooser that often other languages may be available, but could not provide a list nor a concrete schedule.  

One aspect we should point out is the quality of the account management with Pepperstone. Throughout our reviews, we found that during account openings, the account managers were a bit pushy. We were pleasantly surprised that this was not the case with Pepperstone. The account manager was helpful, timely, and responsive, without the usual ‘sell-sell-sell’ attitude we were accustomed to.

 

Pepperstone review -

Bottom Line

We hope you found our Pepperstone review useful.

A relatively new player to the market, Pepperstone is a good FX broker. The website is well designed, clear and easy to navigate. We especially liked the Secure Client Area, which is a great way to controll your accounts. Offered rates are competitive, especially if you are a frequent trader. They have not developed their own platform, but the ones they offer are well designed, and robust. 

Brokerchooser felt that some areas still need a bit of refinement, their available products are limited, and the research options could be improved. 

Pepperstone review summary

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