eToro Review: Is It Worth It?
eToro Review
eToro is a trading platform that has been around since 2007. The company was founded in Cyprus by Yoni Assia, Ronen Assia, and David Ring. It is one of the most popular social trading platforms on the internet today. Read our eToro review to find out if eToro is safe, legit, or good!
If you would like to get 0% trading fees on eToro, follow the link below and register for a free eToro account.
Disclaimer: We want to emphasize that this is not financial advice. Cryptocurrencies operate in a volatile market, where values can drastically fluctuate in a blink of an eye. It is imperative to conduct thorough research and seek guidance from a qualified financial advisor before investing.
Background And History
Is eToro Legit? For more than a decade, eToro has been a leader in the global Fintech revolution. It is the world’s leading social trading network, with millions of registered users and an array of innovative trading and investment tools.
In 2007, a trio of visionary entrepreneurs embarked on a mission to revolutionize the trading landscape. Their objective centered around democratizing trading, eliminating geographical barriers, and diminishing reliance on conventional financial institutions.
The inaugural rendition of eToro emerged in the same year, introducing an online trading platform designed not only for accessibility but also for enhanced comprehension and engagement. This was achieved through innovative visual representations of diverse financial instruments.
By 2009, eToro unveiled its cutting-edge, user-friendly trading platform, ushering in an era where individuals worldwide could engage in online trading of financial assets effortlessly. The platform, known as WebTrader, catered to both novices and seasoned traders by offering a suite of professional tools.
A groundbreaking milestone occurred in 2010 when eToro introduced the world's first social trading platform. This pioneering innovation extended an invitation to global citizens to participate in the Fintech revolution by harnessing the ingenious CopyTrader™ feature to replicate successful traders' strategies. The platform garnered international acclaim, earning the prestigious Finovate Europe Best of Show accolade in 2011.
In 2012, the convenience of eToro's offerings was further augmented as both WebTrader and OpenBook became accessible via a streamlined mobile application. This empowered clients to execute trading actions seamlessly through their Apple or Android smartphones, regardless of their location.
Complementing its array of commodities, currencies, and assets, eToro expanded its scope in 2013, adding a diverse range of stocks to its portfolio. This strategic move empowered traders with the ability to enhance portfolio diversification and partake in the global stock market.
The culmination of these evolutionary steps transpired in 2015 with the launch of the integrated eToro platform. Seamlessly merging the capabilities of WebTrader's online trading functionality and OpenBook's social trading features, this innovation introduced an intuitive interface that fostered enhanced trading experiences.
In 2016, the advent of CopyPortfolios introduced an innovative long-term thematic investment product. These managed portfolios amalgamated Top Traders or assorted assets under predetermined market strategies. Notably, many CopyPortfolios leveraged advanced machine-learning algorithms, aiming to optimize returns dynamically.
The cryptocurrency realm became a focal point in eToro's evolution during 2017. Building upon its pioneering introduction of Bitcoin trading via CFDs in 2013, eToro broadened its cryptocurrency offerings to encompass Ethereum, XRP by Ripple Labs, Litecoin, and several other prominent cryptocurrencies, providing clients with diversified investment options.
In a milestone move in 2018, eToro embarked on Phase 1 of its journey to cater to the US market by introducing its cryptocurrency trading platform.
This sequence of progressive developments underscores eToro's commitment to reshaping trading paradigms while fostering inclusivity and innovation within the financial landscape.
Security
eToro's security framework rests on a foundation of adherence to regulatory mandates, including those set forth by FCA, CySEC, and ASIC. These regulatory affiliations affirm the establishment of a comprehensive safeguard system intended to ensure the protection of investors.
A noteworthy facet of eToro's security paradigm is the meticulous management of clients' funds. These funds find safekeeping within top-tier financial institutions, bolstering the integrity of the platform's financial infrastructure. Additionally, eToro employs SSL encryption as a robust shield for safeguarding all personal information, fortifying the confidentiality of users' data.
As an additional layer of defense, eToro introduces the option of activating Two Factor Authentication (2FA) within user accounts. This authentication mechanism necessitates the input of a verification code sent to users' mobile devices via SMS, effectively erecting a fortified barrier against unauthorized access. This feature, available for customization within Account Settings, empowers users to fine-tune their security preferences.
However, it's imperative to acknowledge that the realm of trading inherently carries risk. With transparency and ethical responsibility at the forefront, eToro actively encourages its clientele to adopt judicious trading practices. This includes fostering an informed trading approach and embracing portfolio diversification strategies, underscoring eToro's commitment to responsible trading.
In the context of financial transactions, eToro maintains a staunch commitment to safety, privacy, and security. The utilization of Secure Socket Layer (SSL) technology for transaction communication reinforces the insulation of users' personal data throughout the transactional process.
Regulation And License
eToro's regulatory framework spans a diverse global landscape, reflecting its commitment to compliance and accountability within the financial industry.
In the United Kingdom, eToro (UK) Ltd. operates under the watchful eye of the Financial Conduct Authority (FCA). The company holds a cross-border license from the FCA, enabling it to extend its services across member states of the European Economic Area. This regulatory affiliation underscores eToro's dedication to adhering to stringent standards.
Meanwhile, eToro (Europe) Ltd., headquartered in Cyprus, operates under the regulatory purview of the Cyprus Securities and Exchange Commission (CySEC). The company's cross-border license from CySEC extends its reach both within and outside the European Economic Area, reinforcing its commitment to maintaining regulatory compliance on an international scale.
In the Netherlands, eToro (Europe) Ltd. is registered with De Nederlandsche Bank N.V. (DNB) as a provider of crypto services. While DNB supervises compliance with anti-money laundering and anti-terrorist financing regulations, eToro (Europe) Ltd. remains exempt from prudential and conduct of business supervision. This underscores the unique regulatory landscape that governs crypto services in the region.
Across the ocean in the United States, eToro USA LLC stands registered with FinCEN as a Money Services Business, adhering to regulations within the realm of financial services. Furthermore, eToro USA Securities Inc. holds membership with both FINRA and SIPC, bolstering its commitment to investor protection and regulatory alignment.
Australia is no exception to eToro's global regulatory footprint. eToro AUS Capital Limited operates under the jurisdiction of the Australian Securities & Investments Commission (ASIC), holding an Australian Financial Services Licence that solidifies its compliance within the Australian financial framework.
In the Seychelles, eToro (Seychelles) Limited's Broker-Dealer license from the Seychelles Financial Securities Authority (SFSA) is a testament to its capacity to offer a range of financial products, including securities and CFDs, while providing clients with innovative Copy functions.
This diverse constellation of regulatory affiliations accentuates eToro's unwavering dedication to regulatory compliance and client protection on a global scale. The company's expansive reach is underpinned by its alignment with the regulatory mandates of the regions in which it operates, thereby ensuring transparency and accountability in the realm of financial services.
Fees
When it comes to managing your investments, the absence of management or ticketing fees is an attractive feature. Additionally, eToro breaks new ground by making investing in stocks a commission-free endeavor, relinquishing the burden of traditional trading charges that can eat into potential gains.
However, the realm of withdrawals introduces a nominal fee of $5. While seemingly inconspicuous, it's worth noting as it factors into your overall experience. Moreover, the landscape of foreign exchange rates (FX) adds a layer of complexity, particularly when non-USD deposits and withdrawals come into play. These rates can influence the value of your transactions in subtle but impactful ways.
A notable facet that demands attention is the potential for fee waivers through an eToro club tier upgrade. The tier you occupy is intrinsically linked to your investment level. This introduces an element of personalized interaction with fees, where your commitment to investing can potentially mitigate certain charges.
The correlation between your investment level and club tier emphasizes eToro's intention to foster an adaptable experience, where fees can be navigated in alignment with your investment journey.
While these nuances undoubtedly play a role in shaping the financial aspect of your eToro experience, it's prudent to delve deeper for a comprehensive understanding. For those who seek granular information about eToro's fee structure, a direct link is provided for further exploration.
eToro Club
The eToro Club is a distinctive loyalty program designed to bolster the trading journey for eToro clients, introducing a plethora of services and tools that augment their trading experience.
Qualifying for eToro Club membership is a threshold crossed by clients with a realized equity of at least $5,000. This criterion marks the initiation of a unique journey through five distinct levels, each characterized by its own rewards and privileges, spanning from Silver to Diamond.
The ascent through these tiers is dictated by the progression of realized equity, and with each elevation, a cascade of additional benefits unfolds. Starting with the Silver tier, members are granted coveted access to in-depth market webcasts, data-fueled CopyPortfolios, and an exclusive link to a dedicated Customer Success Agent, aligning the client experience with expert guidance.
Transitioning to the Gold tier echoes the Silver tier's benefits, supplemented by exclusive access to expert weekly market analysis updates, cultivating an informed perspective essential for astute trading decisions.
Venturing into the Platinum realm rewards members with Gold-tier offerings, alongside enticing advantages like exemption from withdrawal fees and complimentary entry into a premier digital publication. The Platinum horizon expands further, encompassing exclusive access to curated partner apps and platforms designed to empower members with confident and well-timed investment choices.
For those residing within the Platinum+ echelon, the scope of benefits widens to embrace personalized engagement. One-on-one Zoom meetings with dedicated Account Managers provide tailored insights, while exclusive invitations to special sporting and cultural events offer unique experiences beyond trading.
At the pinnacle of the eToro Club pyramid, Diamond membership engulfs all the aforementioned offerings. It is a realm where access to premium digital publications, exemption from exchange fees, and exclusive participation in eToro's prestigious Diamond events culminate in a truly privileged experience.
The eToro Club resonates as a dynamic progression, uniting realized equity and tailored rewards. It encapsulates an innovative approach that amplifies the client's journey, fostering informed trading decisions and a cultivated trading environment, one tier at a time.
CopyTrader™
This feature finds relevance across the spectrum of traders - from novices seeking foundational learning to those grappling with time constraints amidst the bustling markets. CopyTrader brings a potent solution, enabling users to harness the expertise of adept traders. The concept is elegantly simple: your trading portfolio can replicate the moves of these proficient traders automatically, translating their actions into your own trades.
Initiating this process entails no extra cost, presenting a user-friendly approach that aligns with the spirit of accessibility that eToro embodies. There are no management fees lurking beneath the surface, debunking any notion of hidden costs. As an interesting twist, the traders being copied are directly rewarded through eToro's Popular Investor Program, fostering a mutually beneficial exchange within the community.
However, it's important to recognize that CopyTrader merely scratches the surface of eToro's multifaceted offerings. Beyond replication, eToro houses a dynamic collaborative community of traders and investors, cementing its status as a prominent knowledge hub. Here, traders can transcend the realm of mere duplication and tap into the expansive landscape of shared insights. The ability to explore the portfolios, statistics, risk assessments, and engage in conversations with fellow traders fosters an environment conducive to growth and learning.
eToro Academy
The potency of eToro Academy lies in its role as a catalyst for deeper comprehension. It navigates beyond surface-level knowledge, inviting learners to delve into the depths of trading dynamics. Courses within this virtual academy are meticulously crafted, enabling participants to cultivate a well-rounded skill set that extends far beyond the confines of theory.
The array of offerings under the eToro Academy umbrella underscores its commitment to empowering traders with strategic insight and informed decision-making prowess. Amidst the ever-evolving trading landscape, this learning avenue becomes an invaluable ally, providing a structured path for both beginners and experienced traders to fortify their arsenal of skills.
For those eager to explore the boundless horizons of the eToro Academy, a simple step beckons: following the provided link. Therein lies a wealth of knowledge, primed to shape and elevate one's understanding of trading, risk management, and the intricate tapestry of financial markets.
eToro Pros & Cons
eToro: Pros
- Well established company
- Great for beginners and experts alike
- Multi-asset platform
- Regulated and licensed
- Strong security features
- 0% fees on stocks and ETFs
- Free insurance
- Great community
- Invest with experts using CopyTrader™
eToro: Cons
- Platform and mobile apps are extremely clunky
- Doesn't have a lot of available cryptocurrencies
- Customer support is awful
- It still doesn't offer all its features in the U.S.
- Crypto-assets trading (non-CFD) is not covered by the insurance
- Lots of customers get random endless requests for personal information such as full bank statements and history of transactions, work contracts, etc
- Many customers have their accounts frozen for no apparent reason
eToro Review: Verdict
After our eToro review, we found this to be one of the worst platforms for any kind of trader and investor.
The platform and mobile app are absolutely terrible, clunky, outdated, and not user-friendly at all.
Many customers have had their accounts frozen for no apparent reason and have gone through endless email exchanges with eToro requesting extremely personal and sensitive information such as bank statements and a full history of incoming and outgoing transactions, they've also asked for users' work contracts, which is sensitive, and private information drafted between individuals and companies they have agreements with.
With eToro, users can invest in assets with and without leverage, giving almost anyone access to short-, mid-, and long-term investment options.
On a positive note, when you open a long, non-leveraged position on a stock or ETF on eToro, you pay a 0% commission. There are no spreads, no fees, and no hidden charges, and you actually gain rights in the underlying asset. eToro offers competitive spreads on other asset classes, including spreads as low as 1 pip for leading Forex pairs.
eToro has purchased an insurance policy from Lloyd’s of London for its clients’ benefit. The insurance covers claims of Eligible Clients (of eToro (Europe) Ltd., eToro (UK) Ltd., I and eToro AUS Capital Limited) suffering losses in the unlikely event of eToro’s insolvency and in case of Event of Misconduct (as defined in the applicable Policy).
The insurance covers (i) up to 1 million Euro, GBP or AUD (depending on the regulated entity), (ii) up to the aggregate limit purchased by eToro; and (iii) subject to an excess amount (as defined per applicable policy). The insurance covers cash, all CFD positions, and securities. Note that crypto-assets trading (non-CFD) is not covered by this insurance, as set in the applicable Policy.
eToro is one of the world’s largest communities of traders and investors, numbering more than 20 million from more than 140 countries. eToro is home to talented and experienced investors, many of whom with track records that outperform market benchmarks
The eToro News Feed operates just like that of any social network, enabling traders and investors to interact, share ideas, insights, and trading strategies, and even make new friends.
On eToro, users can copy the trades of talented, experienced, and professional investors using the CopyTrader™ function. Each user’s performance is displayed transparently, including risk score, fail/success ratio, and much more. Some top eToro traders have shown consistent returns and repeatedly beat benchmark indices.
eToro doesn't have a lot of crypto assets available, and, unfortunately, not every eToro feature is available for U.S. clients.
If you would like to get an eToro free demo account with $100K and give it a go at trading and investing without running any risks, follow the link below.
