Use this telephone trick to find the best (and avoid the worst) Forex brokers & spread bet providers
No one could say we’re short of Forex brokers and spread bet providers to choose from…
There are literally hundreds of them out there!
Of course some firms are more trustworthy than others, but that’s just the same in any industry – you’re always going to get your straight-shooters as well as those who swim in murkier waters.
So when it comes to trading, how do you go about finding the best? Which are the ones you can trust to be worthy of your business?
If you stick to one of the ‘big names’ in the industry you can’t go far wrong. If they have a presence here in the UK, they should be regulated by the Financial Services Authority and that’s one thing you might like to check before you deposit any funds with a firm…
You see, when a firm is overseen by the FCA, it means they have to stick to a strict code of conduct. Client funds have to be kept separate from the firm’s own operating capital (it means if the company goes out of business your deposited funds are kept safe).
And any complaints they receive from clients are reported to the FCA on a regular basis. This means there’s no room for any shenanigans to get out of hand.
In fact, if there ever is a genuine error made on the part of a regulated firm, they should be bending over backwards for you to make amends. They need to keep everything whiter than white in the eyes of the FCA.
So regulation aside, one other little trick you might like to use to help you choose a broker is to go with the second or third-biggest player rather than the very top dog.
Forex brokers: Why the title contender is often a better bet than the market leader
Be in no doubt, it’s a very competitive market out there in the trading and investment industry. These firms will cut each other’s throats to win your business.
Go with the title contender instead of the current champ and you should expect to be treated like royalty as they fight to keep you happy, retain your business, and continue growing their own share of the market.
That’s why I think outstanding customer service is one of the top criteria you should be using when it comes to choosing a broker or spread betting firm.
Now I know customer service is probably not the first thing you usually think of when it comes to choosing a trading provider…
Yes, tight spreads are definitely an essential (that’s the difference between the current market price for buy orders and sell orders). But these days, competition between the firms means this is almost a given wherever you look. You should see tight spreads in all the main Forex markets with any reputable provider.
Trading technology is a pretty level playing field these days too. Most of the big providers will give you the industry standard Metatrader charting/order platform free of charge.
They all have solid mobile platforms too, so there’s nothing really to set the firms apart as far as technology goes…
So if you’ve got the best technology and you’ve got the right trading conditions at your fingertips, all from a range of different providers, it only really leaves customer service as the differentiating factor.
See how important good customer service could be by visualising this delicate situation:
So let’s imagine you’re holding a EURUSD position. It’s been making good progress all morning and you’re just about to manually close the trade to take your profits, when, horror of horrors, your broadband connection goes down completely.
What a nightmare! The US job numbers are due out in 25 minutes and you now desperately need help to exit your open trade. You cancelled your stop loss and were just about to close-out the trade when the connection dropped.
You’re left totally exposed. The consequences to your account could now be disastrous. (Sounds like a bit of a haphazard thing to have happen, I know. But these things do have a habit of rearing-up on you at precisely the worst possible moment!)
So let me ask you – do you now want to be stuck with email-only support from a low-level customer service provider? It could be hours before you get a reply. And even then it’s likely to be a canned response.
Or how about getting routed through to an outsourced call centre on the other side of the world – again, with questionable powers to help you in your hour of need?
Or would you prefer to have a polite and professional customer service department in London answer the phone on the second ring and sort everything out for you right there and then?
I know which I’d prefer!
And here’s the trick to choosing a broker with good customer service:
Before you deposit any funds with them, take the time to ask a few quick questions on the phone – even daft ones – and see how you’re treated.
Ask them a quick question. Anything…
‘What is the minimum stake I can place per trade?’
‘Which days can I place trades on?’
‘When do you close for Easter?’
Make a few calls to different providers and then review how your enquiries were handled…
- Was the phone answered quickly (even at 13:30 on a big data announcement day)?
- Were you spoken to courteously and was your question answered fully and in a helpful way?
- Will you be happy to receive this level of service even in your darkest hour of urgent need?
Because remember, this is how you can expect to be treated every time you need to speak to them – even when the pressure is on and you NEED help, now!
So take the time to choose wisely – put a few firms through the mill via a quick ‘telephone test’. And don’t forget you’re never going to be short of choice for a trading broker. Don’t feel pressured into signing up with any of them until you’re satisfied you’ve singled-out a good one.
In this day and age, good customer service is essential, but in the main, it’s sadly lacking!
Be prepared: market moving data coming this week (London-time)…
Wednesday 14th January 2015:
13:30 USD Retail Sales
Thursday 15th January 2015:
13:30 USD PPI
15:00 USD Philly Fed
Friday 16th January 2015:
10:00 EUR Consumer Price Index
13:30 USD Core Consumer Price Index
Monday 19th January 2015:
All day USD Holiday – Martin Luther King Jr. day
Tuesday 20th January 2015:
10:00 EUR German ZEW Economic Sentiment
Keep an eye out for quieter conditions on Monday with that US holiday and I’ll catch up with you again next week.
Until then… Happy trading!