Best FCA Regulated Brokers

Using only a regulated broker could be one of the best trading decisions you will make. Even better than buying Bitcoin in 2016, or shorting oil in the spring of 2020 just before the pandemic drove crude prices into the ground. Why is using a regulated broker so important? A profit isn't a profit unless funds are returned to your bank account by the broker.

If you do not factor in the regulatory status of a broker and trade using an unregulated firm, you could face a painful double-whammy. Making a profit by trading can be hard enough, but you might find you can't get any of your money back even if you are entitled to receive the cash. The harsh reality is that scammers operate in the industry whose sole aim is to take your funds and disappear.

#1 Tickmill

There is intense competition among brokers and Tickmill keeps picking up new clients due to its aggressive approach to trading costs. The UK trading community probably owes a debt to Tickmill for being the broker which continuously drives down trading fees; they even offer bid-offer spreads of 0.0 pips in some markets.

The broker doesn’t skimp on other parts of the service, with some of the additional third-party research tools such as Myfxbook and Autochartist being ideal for beginners. Tickmill provides everything that a new trader might need to get started, including being regulated by the FCA.

Tickmill UK Ltd is authorised and regulated by the FCA and is registered with number: 717270.

Registered Office: 3rd Floor, 27 – 32 Old Jewry, London EC2R 8DQ, England.

#2 Admiral Markets

Trading with Admiral Markets is all about quality. The firm was founded in 2001 and has invested heavily in building a platform that develops clients’ trading skills.

Regulated by the FCA, the firm takes client safety very seriously. Login authentication is two-stage and the site provides regular updates on scams and how to avoid them. Admiral also engages external auditors to review and upgrade operational and internal procedures and ensure regulatory compliance.

Admiral Markets UK Ltd is authorised and regulated by the FCA and is registered with number: 595450.

Registered office: 60 St. Martins Lane, Covent Garden, London, United Kingdom, WC2N 4JS

#3 eToro

eToro’s popularity speaks for itself. With more than 13 million clients, it’s one of the biggest global players. Headquartered in London and regulated by the FCA, eToro supports self-trading, trading in crypto and Copy Trading.

The Copy Trading service can be useful for beginners who want to understand more about trading and the approach taken by more experienced traders. For many others, it offers a more ‘hands-off’ way of gaining exposure to the financial markets with a lot of the analysis and trading effectively outsourced to a third-party.

eToro (UK) Ltd is authorised and regulated by the FCA and is registered with number: 583263.

Office address: 24th Floor, One Canada Square, Canary Wharf London, E14 5AB. United Kingdom

#4 Pepperstone

Pepperstone is an Australia-UK operation with a strong reputation in the trading community. It doesn’t try to be all things to all people, but there is a committed following made up of clients for whom Pepperstone offers just the right approach.

The customer service team consistently wins industry awards and the webinars and research notes it releases are trade focussed – they are designed to help the clients learn how to spot trading opportunities.

Pepperstone Limited is authorised and regulated by the FCA and is registered with number: 684312.

Registered office: 70 Gracechurch Street, London EC3V 0HR, United Kingdom.

#5 IG

IG is one of the best-known multi-asset brokers in the market. It has been trading since the 1970s and so has a strong track record of compliance with FCA terms and conditions.

This is very much a one-stop-shop, where beginners and more experienced traders can trade nearly any market they want. Clients looking to develop their trading skills can draw on an extensive range of free materials. They can also use the customer service team, which, unlike most other brokers, is contactable at the weekend.

The platform functionality has been fine-tuned and tested over the years to provide a user-friendly trading experience.

IG Markets Limited is authorised and regulated by the FCA and is registered with number: 195355.

Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. United Kingdom.

#6 XTB

It’s worth opening a demo account with XTB just to try out the xStation trading platform. A few virtual trades on xStation will highlight how much support is available for those looking to get into trading.

XTB is regulated by the FCA and has a solid track record. It stands out as being a broker that is consistently trying to push the boundaries of what is possible. It is a stable and reliable broker that is also innovative and constantly looks for ways to improve clients’ trading experience.

XTB Limited is authorised and regulated by the FCA and is registered with number: 522157.

Company address: Level 9, One Canada Square, Canary Wharf, E14 5AA, London, United Kingdom (company number 07227848)

#7 FXTM

FXTM has been operating for 10 years, which offers a degree of security. It does have a hunger to build market share, exemplified by its attention to client satisfaction and a trading platform that offers high-grade trade execution.

There is a feeling that FXTM is on the same side as its clients. One way in which it supports beginners is the Cent account, which allows traders to trade real money but in small amounts. Bridging the gap between demo and full-scale live trading is a great idea and can help traders develop the skills they need to be long-term profitable.

ForexTime (FXTM) is authorised and regulated by the FCA and is registered with number: 777911.

UK office: 30 Churchill Place, London, E14 5EU, United Kingdom.

Why Do Brokers Apply to be Regulated?

Reputable firms, those whose business model is based on delivering an attractive service to clients, have the option of applying to be authorised by a regulatory body. In the UK, the regulatory body overseeing the financial markets is the Financial Conduct Authority (FCA)

Investors and traders who use a broker regulated by the FCA can take a degree of comfort from the following features:

• Complaint procedure – the right to take complaints to the regulator if the broker doesn't adequately address your issues
• Cash deposit protection schemes – such as FSCS in the UK, which protect your funds
• Negative Balance Protection – not being able to lose more than your initial stake
• Segregation of client funds – if the broker goes bust, your money is safe because it's held in an independent account
• Risk warnings – brokers are required to offer information on the risks associated with trading
• Trading limits – the FCA limits leverage on retail accounts to 1:30

What the regulator demands of regulated brokers extends far beyond the items listed above. There are Order Execution Policies, Pillar 3 disclosures, Anti-Money Laundering rules, Privacy Policies and much, much more.

Brokers need to comply with the terms set out by the FCA and must also provide reports to prove compliance; doing so is very costly. The fact that a broker opts to be regulated indicates that it is a bona fide business with a long-term business plan and a desire to put in the effort to gain the rubber-stamp of the FCA

What Does Being Regulated by the FCA Mean?

The cover that extends to clients is only part of the equation. There is also a lot of compliance work that goes on behind the scenes at FCA regulated firms.

The application process itself is long-winded and costly. It usually takes more than six months to process an application and involves submitting an extensive amount of documentation. Items covered include the business's operations, the key staff involved and evidence that they have the skills and experience to run the business in line with the rules and regulations.

Brokers are also required to demonstrate they have enough spare cash on hand to make their business viable. That's cash tied up in a deposit account rather than being used as working capital to develop the business.

The carrot associated with being regulated is that the broker can attract more customers. The stick is that the regulator can take punitive action against brokers that don't comply with the rules; firms can be warned or even lose their licence. The FCA's website keeps a log of the actions it takes to police the financial markets.

If you're looking for a reliable broker, using one that is appropriately regulated is essential. Considering the time, effort, and expense brokers commit to become regulated, why risk your money with an unregulated organisation?

The even better news is that regulated brokers compete for business in many different ways. For example, some provide excellent research tools and offer low-cost trading and good all-round service. Trying the demo accounts of the below FCA regulated brokers will help you learn more about trading and what the brokers offer.

Final Thoughts

With so many good brokers going to the trouble of gaining FCA licenses, it's a surprise that individuals are still getting caught out by unreputable firms. A little bit of homework is all that it takes to ensure a firm is well regulated.

One final check that is recommended is to cross-reference a broker's registration with the FCA itself. The regulators own database is the ‘golden source' of information and it's worth utilising the search tool to make sure a broker is genuine.