Social trading can be seen from two different perspectives. Firstly, from the point of view of the investor using the expertise of professional traders. The investor, often called a follower, copies the trades of the professional trader. On the other hand, one may also see social trading from the perspective of the professional trader trying to gain followers, in order to receive commissions from the broker in addition to trading profits.
The decision as to who is the best social trading broker is determined by the individual. Every trader has a personal opinion, and we would like to include your assessment here in the social trading broker test found on this page. If you are already registered with a provider and are gaining experience in social trading, then please vote.
We also test various social trading providers. We do this by opening an account with them, taking a close look at the trading offer and the available traders, making some trades, and putting some questions to the customer service team. In addition, we perform research about the company, with particular attention paid to regulation and security. If possible, we also investigate the management behind the company.
By sharing what we look out for in our own test reports, we will show you the criteria we consider in our own reviews – which should help you in your own assessment. We have developed a 10 point checklist, presented in detail below, to explain what matters most to us.
To determine the best social trading provider, first we check the broker’s trade offer. The trade offer is slightly different to that of a classic CFD broker. We look at the number of underlying assets that a client can trade with a social trading provider, evaluating not only the number, but also the quality. We assess whether the broker offers a wide selection from various industries and countries. This is especially important for top traders trying to gain a strong followership.
However, as mentioned above, social trading should be considered from two points of view, including that of the follower. For followers it is less significant how many underlying assets are available to trade. Followers will primarily follow other traders and not actively trade themselves, although on some platforms this is also possible.
From the follower‘s point of view, the trade offer therefore consists of top traders whose activities they can follow. We check the number and quantity of top traders – however, the quality of the traders themselves is even more important. Quality is a signifier of their success, which of course is not easy to assess in full. Therefore, we also include our past social trading experiences.
Of course, a social trading broker test also includes an assessment of the conditions and fees. Here, we have to admit that a direct comparison can be difficult, since social trading providers sometimes pursue very different models and objectives. Many, though not all, social trading providers are CFD and Forex brokers. In this regard, we pay particular attention to the level of spreads (the difference between buying and selling prices). This is important because spreads are incurred on every trade. The higher the spreads, the greater the burden of cost on the traders. Therefore, it is logical that this difference should be as small as possible. As a rule, these are also market maker models in which the broker sets the spread itself.
On the other hand, there are also social trading providers that map the performance of a top trader by means of a derivative – in the form of a certificate, for example. The terms vary from broker to broker. This has the advantage that the top trader can buy shares directly. Although a spread applies here, too, it is certainly not due to the broker, but rather to the stock market or the issuer in direct trading. As such, it would be unfair to add these costs to our assessment of the social trading provider.
In your test you might also consider these charges:
We have already mentioned that there are different types of social trading brokers. Unlike stock brokers, which are relatively easy to compare, in the social trading area there are different approaches. This adds a certain challenge to our broker comparison. For example, with one social trading provider, investors might require a separate custody account, while others do not require this. Therefore, we examine the account models of the respective provider and test it for practicability, both from the perspective of the top trader and the follower – although our focus is primarily on the investor.
Our social trading experience shows that it might even make sense to open an account with several brokers to benefit from the advantages of different approaches.
In practice, individual providers do not generally offer different account models, apart from those for VIP clients. With the majority of brokers, it is possible to be active both as a trader and as an investor. Although, we recommend in this case – if the broker allows it – to open two separate accounts to differentiate between your trading activity and the result. Top traders sometimes receive more favourable conditions if they can attract a certain number of followers or amount of trading capital for themselves.
When deciding who should be your social trading test winner, you might also consider evaluating the trading platform and mobile trading. Most brokers in the social trading segment do not offer separate software for download, but limit themselves to a web-based platform accessed directly via the user’s browser. However, we do not perceive that as a drawback, and do not hold it against a provider if they do not offer software for download and installation. We do, however, take a close look at the web-based platform. In the category of ‘usability’ we go even deeper.
In our social trading broker test, providers have to offer more than just a simple order mask. Additional features such as chart analysis, the trade history of the top trader, detailed trading style information, amongst other aspects, should also be available.
A mobile brokerage app for smartphones and other mobile devices is also desirable, but in our opinion it‘s not a requirement for a test winner. Maybe you have a different opinion, but as a rule, the platforms or the provider’s website are often responsive. This means that the look and presentation of the website are able to adapt to the user‘s mobile device, although sometimes functionality may be limited somewhat. An app for Android and iOS is therefore not mandatory, but the provider should offer an alternative, such as a mobile web view.
Our experience shows that a company with a user-friendly website often performs exceedingly well in other areas, too. User experience is not just about the look or design of a website, but also about navigation. Is the structure consistent and comprehensible? Is information easy to find? Is it generally where you would instinctively look for it?
We also assess the website content to see to what extent all important information is easily accessible. A search function is very helpful in this case, and we also test the registration and verification process in this category.
What matters to us in terms of usability:
In addition to the website’s user-friendly aspect, from this perspective, we also take a look at the trading platform. Can you find your way around the order mask? Can users easily find detailed information about the top trader, etc? The platform should still be easily accessible during hectic stock market activity. It is vital for you as a trader to have access to your account in such a situation.
In our opinion, the best social trading provider should also provide excellent customer service – the quality of the provider’s employees generally reflects the overall quality of the broker. Ultimately, excellent support demonstrates that customer relations are important to the company. In our assessment we pay attention to the communication channels for contacting the broker. This should usually be possible via e-mail (or contact form), telephone and live chat. The latter has gained in importance in recent years.
If you have already experienced your social trading provider’s customer services, what was your opinion on the team’s reaction? Were you satisfied with the speed of the answers? Were the employees able to help you competently? If you have already had some experience, then it would be good to consider this in your assessment?
You might pay particular attention to these points:
Of course, we do not expect the support team to always respond instantly, and it is also perfectly fine if they first have to check with a specialist department for more complex issues. We also find it desirable that clients are not pressured into anything when contacting support. It‘s dubious if the support staff give actual buying recommendations. We also take into account the availability, with support available at least during trading hours, and preferably 24 hours a day.
In this category you can assess your social trading experience when it comes to the terms of payment of the respective broker. Since most social trading providers are Forex and CFD brokers, we set the same benchmark we use with CFD brokers – we expect the broker to offer more than just bank transfers as a payment method.
The classic bank transfer has the advantage that there is practically no limit on the amount that can be transferred. The disadvantage, however, is that a transfer is not immediately credited to the provider, but takes at least one working day. Payment methods that issue an immediate credit to the broker include credit card (usually only Visa and Mastercard are approved), PayPal, Skrill, Neteller, Sofortüberweisung, Giropay and occasionally Paysafecard.
Of course, no broker has to offer all the payment methods mentioned here, but we expect at least a reasonable selection. In our assessment we also include factors like minimum deposit amount, minimum payout and transaction fees. A free payment method should be available. Often, deposits are mostly free of charge, but not always.
A summary of what we expect the broker to offer:
Some investors accuse their broker of social trading fraud, especially if they feel that the company delays payouts. That's why we pay close attention to how quickly payouts are processed.
It would be ideal if a provider could qualify as the best social trading broker for beginners and experienced traders alike. To achieve this, however, the provider would have to offer its clients something above average and a selection of additional offers. What do we mean by that? Offers such as a social trading bonus or deposit bonus are, of course, desirable. No one would refuse a 100 euro voucher for the first deposit, for example, but other aspects are even more important to us.
An excellent provider ensures that its clients can trade with lasting success. To this end, the clients need theoretical and practical support. For example, a free demo account or sample portfolio is very attractive, as this allows users to put together their portfolio of top traders. It is great if users can access past performance statistics, regarding how the top traders have performed previously, even if this is admittedly no guarantee of future profits.
Professional support in terms of education and training should also be available. This may include e-books, webinars, business calendars, newsletters with up-to-date content, video tutorials, etc. However, what is important to us is not the number of education and training opportunities, but rather the overall quality of the learning content. To evaluate this, we take a close look at everything that is available.
This is a key part of our test results and you will certainly want to consider this aspect in your reviews. If your money is not safe with the broker, trading will be more than questionable. It goes without saying that you should check the quality of the broker’s regulation, but assessing whether a social trading broker is trustworthy can‘t be based purely on regulation.
Of course, social trading fraud cannot be completely ruled out, but there are some indicators you should check, to minimise this risk as much as possible.
In our point of view, regulation should be by tax authorities in the EU, USA, Canada, Australia or Japan. If we are looking at issues such as fraud or reputation, we always refer directly to the broker, not to the top traders. It is possible that a top trader will deliver good results over time and then suddenly experience a strong drawdown. That is nothing to do with the broker, and cannot be counted against the company as a whole. It is also the responsibility of the investor to find out in advance about the risks associated with social trading.
What we also include in our evaluation:
We believe that a broker should have some company history before being nominated the best social trading broker. Of course, new players may offer excellent conditions, but nevertheless, we first want to see how the provider proves itself on the market over time.
We also include opinions from the trade press and recognised experts in our test results. Often, the more well-known and the larger a social trading broker is, the more varied the media coverage. There may well be an occasional negative report about the broker, but the vast majority of press coverage should be positive.
As a rule, only brokers who have been active in the market for a while receive awards. We also review these awards – with the quality of the awards being far more important than the sheer number. By this we mean that awards from renowned institutes are more valuable than awards from unknown experts. We also look at what the social trading broker is receiving awards for and whether this fits in with our view. Awards are often given for outstanding customer service, excellent trading quality or for the trading platform.
Now you‘ve had an overview of the rigorous criteria we use in our social trading comparison. We have shown you in detail what to look for in your assessment. At this point, however, we want to emphasise again that the reviews you find here have been written exclusively by our readers. Our opinion has absolutely no part in the ranking. We simply provide guidance about which aspects you might consider in your assessment.
Of course, you are welcome to use our expertise, too. AskTraders.com is an independent broker comparison website. Since we are not obliged to any broker, we carry out objective and reliable tests. We also have years of experience in online trading and have had dealings with many brokers for many years. We know exactly what to look for and sometimes we have background information that the average customer does not have. But your opinion is just as important to us.
So, our request to you is this – if you have experience with one or more providers, please vote and reveal your personal social trading test winner. You’ll help other readers to make an informed decision for or against a provider. The broker with the most votes will receive the Readers‘ Award at the end of the year.