Note on brokers…
(JUST TO BE CLEAR- THIS IS NOT ABOUT FREETRADE- I am happy customer here).
Back in a day, when I started investing I opened an account with UK based discount broker. To make story short, my “investing” turned more to gambling and in the end I lost some money. But this a story not about that. This is a story about the caution of choosing a broker.
The broker that I had an account with was quite a new kid on a block (operated for about 10 years?) Commissions were low, they offered trading in many markets- UK, Europe, USA (although I was never able to access that functionality, or simply did not looked at it too much). It had quite nice interface, were mailing daily market emails (if you signed for that ), had even phone app, that was very nice too. Everything looked very professional, deposits, withdrawals worked great too.
The company was FCA authorized too.
Unfortunately some time ago I received an email, telling me that the broker went under and was acquired by other company. Meanwhile there was no access for the shareholders to log in to their accounts, to withdraw money, to sell shares, etc etc.
I was lucky one, since I closed account quite some time ago before that. Not because of anything related to the broker, I actually felt that the broker was great- bot using their services and commission. It was simply because my “investment” turned to “gambling” and losses. My hard earned money turned to nothing. So I sold out at loss whatever I held in account and to have zero temptation closed the account for good.
Today I received a phone call from the company that acquired the dodgy broker. It seems that there is more things… Apparently the director of the brokerage was doing dodgy things (insider trading?), had another company and was doing something that he not supposed to do, was overcharging commissions, etc.
So here is the conclusion- it seems that being FCA authorized is just a good start, but in the end does not prevent from bad apples, professionally looking broker might be doing dodgy things…