Who is the best social trading broker? That's how you voted
Social trading can be seen from two different angles. Once from the point of view of the investor using the expertise of professional traders. The investor copies the trades of the professional trader. Often, investors are called followers. On the other hand, one may also see social trading from the perspective of the professional trader trying to gain followers to receive commissions from the broker in addition to the actual trading.
The decision of who is the best social trading broker is completely individual. Every trader has a personal opinion. And we would like to include your assessment here in this social trading broker test on this page. If you are already registered with a provider and thus gaining experience, then please vote.
We, too, test the social trading providers. We do this by opening an account with them, taking a close look at the trading offer and the available traders, even making some trades and putting some questions to the customer service. In addition, we also inform ourselves about the company, of course especially about regulation and security. If possible, we also ask about the management behind the company.
So, knowing what we need to look out for in test reports, we want to show you the criteria we're considering in a review. This should help you in your assessment. We developed a 10 point checklist presented in detail below to explain what matters most to us.
Criteria for your Social Trading Broker Test
1. Trade Offer
To determine who is the best social trading provider from our point of view, first we check the trade offer of the broker. The trade offer is a bit more differentiated than, for example, with a classic CFD broker. Of course we include the number of underlyings a client can trade with a social trading provider, evaluating not only the number, but also the quality. By this we mean whether the broker offers a judicious selection from various industries, countries, etc. This is especially important for top traders trying to gain followers.
But as mentioned above, social trading is to be considered from two points of view. The other angle is that of the follower for whom it is less significant how many underlyings he can trade with the broker, since followers will primarily follow the 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 he can follow. We check out the number of top traders, but to us the quality of the traders is even more important. This signifies their success, which of course cannot be defined as a whole. Therefore, at this point we include our past social trading experience.
2. Conditions, Fees & Expenses
Of course, a social trading broker test also includes an assessment of the conditions and fees. Here we have to admit that the comparability is not always guaranteed 1: 1, since social trading providers sometimes pursue very different models and objectives. Not all, but many, social trading providers are CFD and forex brokers. Here, we pay particular attention to the level of spreads (difference between buying and selling price). This is so important because spreads are incurred on every trade. The higher the spreads, the greater the burden on the trading performance. Therefore this difference should logically be as small as possible. As a rule, these are also market maker models in which the broker sets the spread himself.
On the other hand, there are social trading providers mapping the performance of a top trader by means of a derivative, for example in the form of a certificate. Of course the terms vary from broker to broker. This has the advantage that the top trader, for example, can buy shares directly. Although a spread applies here, too, it is certainly not due to the broker, but the stock market or the issuer in direct trading, so it would be unfair to add these costs to the balance of the social trading provider.
In your test you might also consider these charges:
- Performance fee of top traders
- Fees for deposits and withdrawals
- Other costs & fees
Top 3 Social Trading Broker Comparison
3. Account models for different investor types
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 need a separate custody account, while others do not require this. Therefore, we examine the account model and target direction 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 even might make sense to open an account with several brokers to benefit from the advantages of different approaches.
It has been shown in practice that there are no different account models within a provider, apart from 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 the trading activity and the result. Top traders sometimes receive more favorable conditions, provided that they could win a certain number of followers or capital for themselves.
4. Trading platform and mobile trading
When deciding who should be the 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 detrimental and do not hold it against a provider if he does not offer software for download and installation. But we do take a closer look at the web-based platform. In the category „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, trade history of the top trader, detailed trading style information, etc. should also be available.
A mobile brokerage app for smartphones and iPhones would be desirable, but in our opinion it‘s not a requirement for a test winner. Maybe you‘ll have a different opinion. As a rule, the platforms or the website of the providers are responsive design. This means that the look and presentation adapt to the user‘s mobile device. 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 the mobile web view.
5. Ease of use of the website
Our experience shows that a company that shows user-friendliness in its website often performs exceedingly well in other areas, too. The user-friendliness is therefore not just about the look, but also about how you find your way. Is the structure logical and comprehensible? You may have noticed that on a website you are looking for some information in a particular area intuitively. The imprint, for example, is usually found at the bottom or top right.
We also assess the information content to see to what extent all important information is easily accessible. A search function is very helpful in this case, and the registration and verification process is also tested in this category.
This matters to us in terms of usability:
- Simple and logical arrangement of information
- All important information is easily accessible
- Easy registration & verification process
- Correct and competent use of language
- Additional applications such as search function etc.
In addition to the user-friendliness of the website itself, we also give a look to the trading platform from this perspective. Can you find your way around the order mask? Can users easily get more detailed information about the top trader, etc.? The platform should still be easily accessible during hectic stock market activities, because nothing would be worse for you as a trader than not having access to your account in just such a situation.
6. Customer Support
Whoever turns out to be the best social trading provider should, in our opinion, also provide an excellent customer service, since from the quality of the employees one can draw conclusions about the general quality of the broker. Ultimately an excellent support shows 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 (alternatively by contact form), telephone and live chat, with the latter having gained enormously in importance during recent years.
You‘ve already experienced the customer service? What is your opinion on the reaction of the team? Are 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:
- Reaction speed
- Friendliness and helpfulness
- Professional competence
Of course, we do not expect the support to always respond instantly, and it is also perfectly fine if they first have to inquire in detail for more complex issues. We also find it pleasant when clients are not cajoled into something or other. It‘s dubious if the support gives actual buying recommendations. We also take into account the availability, with support available at least during trading hours.
7. Payment Options
In this category you can incorporate your social trading experience concerning the terms of payment of the respective broker. Since most social trading providers are Forex and CFD Brokers we set the benchmark we use with CFD. And there we expect that the broker offers more than just bank transfers as a payment method.
The classic bank transfer has the advantage that there are practically no amount limits. The disadvantage, however, is that a transfer is not immediately credited to the provider, but takes at least one working day. Payment methods with an immediate credit to the broker would be 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 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 only to a certain extent.
To summarize briefly:
- Minimum deposit
- Minimum payout
- Choice and number of payment methods
- Speed of transactions
- Terms of payment options
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.
8. Additional services
It would be ideal if the provider would qualify as best social trading broker for beginners and experienced traders alike. To do this, however, he has to offer his clients something above average. The broker does not have to take over every innovation another supplier provides, but there should be a certain selection of additional offers. What do we mean by that? Of course among other things a social trading bonus or deposit bonus. No one would refuse a 100 Euro voucher for the first deposit. But other things are even more important to us.
Excellent providers ensure that their clients can trade with lasting success. To this end they need theoretical and practical support. Conceivable is a free demo account or sample portfolio where users can put together their portfolio of top traders, for example. It would be great if users could see a possible performance in the past, how the top traders in the depot would have performed, even if this is admittedly no guarantee of future profits.
Fachliche Unterstützung in puncto Aus- und Weiterbildung sollte ebenfalls vorhanden sein. Hierzu zählen E-Books, Webinare, Wirtschaftskalender, Newsletter mit aktuellen Inhalten, Video-Tutorials usw. Wichtig sind für uns jedoch weniger die absolute Anzahl an Aus- und Weiterbildungsmöglichkeiten, sondern vielmehr die Qualität der Lerninhalte. Um das zu überprüfen schauen wir uns daher auch diese genau an.
Professional support in terms of education and training should also be available. These include e-books, webinars, business calendars, newsletters with up-to-date content, video tutorials, etc. However, what is important to us is less the absolute number of education and training opportunities, but rather the quality of the learning content. To evaluate this, we take a close look at them as well.
9. Regulation and Deposit Insurance
This is a key part of our test results and you will certainly consider this aspect in your reviews. Because if your money is not safe with the broker, trading there is more than questionable. It goes without saying that quality comes before quantity. But calling a social trading broker reputable can‘t be done just based on regulation.
Of course social trading fraud cannot be completely ruled out, but there are some indicators to minimize this risk as much as possible.
From our point of view regulation should be by tax authorities in the EU, USA, Canada, Australia or Japan. If we talk about fraud or reputation we always refer directly to the broker, not to the top traders. Thus it is possible that a top trader delivers good results over time and then suddenly experiences a strong drawdown. But that is nothing to do with the broker – here it is also the responsibility of the investor to find out in advance about the risks.
What we also include in our evaluation:
- Amount and extent of deposit insurance
- Segregated Accounts: Clients' capital is managed separately from corporate assets
- SSL website encryption and other IT security measures
- Secure payment
- Compliance with regulatory and MiFID guidelines
- CFD broker without obligation to make further contributions
10. Opinions from the Trade Press & Awards
We believe that a broker should have some company history before becoming the best social trading broker. Of course new players may offer excellent conditions. Nevertheless, we first want to see how the provider proves himself on the market. Maybe you will see this differently.
To see the whole thing from a different angle we also include opinions from the trade press and recognized experts in our test results. Fact is, the more known and larger a social trading broker is, the more differentiated the media coverage, and there may well be an occasional negative report about the broker. But the vast majority should be positive.
As a rule, only brokers who have been active in the market for a while receive awards. We also review the awards, with the quality of the award 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 the issues the social trading broker is being awarded 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.
Who‘s your social trading test winner? Vote now!
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 emphasize again that the reviews you find here have been written exclusively by our readers. Our opinion has absolutely no part in the ranking. We just 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 comparison portal. Since we are not obliged to any broker, we carry out objective and serious tests. Besides, we have years of experience in online trading. In addition, we have had dealings with many brokers for 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.
Therefore our request: If you have already gained experience with one or more providers, then please vote and reveal who‘s 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.