Finmarket Review – is finmarket.com scam or good forex broker?

Finmarket is a forex and CFD broker that offers trading in more than 30 currency pairs, commodities and indices CFDs on the popular MetaTrader 4 platform. The company behind the brand, K-DNA Financial Services Ltd., is a Cyprus Investment Firm that is licensed by Cyprus Securities and Exchange Commission (CySEC). The company also operates forex broker brands LondonFX and GalaxyFX.

Cyprus is currently one of the most popular forex broker destinations due to its well-balanced financial regulation. There is the Investor Compensation Fund, which is able to pay compensation up to €20,000 EUR per person, If a licensed company ceases trading or becomes insolvent. Moreover, every CySEC- regulated investment company is also MiFID compliant and therefore entitled to offer cross-border services in all EU Member States.

However, we would like to mention that when we downloaded Finmarket’s MT4 platform to try out the broker demo account, the name of another company appeared, not the one licensed in Cyprus: FinMarket EOOD. It seems that this is a Bulgarian company, for which there is no information. Do have this in mind if you consider opening an account with Finmarket.

Trading Conditions

Minimum Initial Deposit

In order to open an account with Finmarket, traders have to invest a minimum of $1000. Such minimum initial amount is quite high, considering that other Cyprus-based brokers require less. For instance, leading EU brokerage XM demands just $5 from its clients as a start.

Spreads & Commissions

According to us, the main disadvantage of this broker is the high trading costs. Finmarket offers very high spreads, exceeding 3.7 pips for the EUR/USD on Mini accounts. On top of that, it also charges salty commission, fees, amounting to $15.00. This means that average trading costs amount to more than 5 pips per standard lot, while most brokers offer spreads within the range of 1.0 – 1.5 pips for this pair. We were so shocked when we made this simple calculation, that asked Finmarkets’ customer support on live chat is it true that they offer such high spreads plus commission fees, and the answer was yes. At least they are honest.

For example, XM’s average spreads on Zero accounts amount to just 0.1 pips on EUR/USD and involve commission of $10 per standard lot (round trip). For further information, you may check out real-time spreads of 15 leading brokers here.

Leverage

The maximum leverage level offered by Finmarket on basic accounts is 1:50, which is a low ratio, yet it is in line with the latest CySEC guidelines. However, most Cyprus-based brokers still offer significantly higher leverage levels – for example, XM provides leverage up to 1:888.