Above all else, the most important characteristic you need from a forex broker is safety. If your funds and personal information are unsafe, every other aspect of their service is irrelevant.
In this guide, we’ll explore how safe Pepperstone is from a variety of perspectives. We’ll focus on relevant licenses and regulations, how the broker protects your funds and your data, and what you can do if anything goes wrong. If you want to know more about other noteworthy features of Pepperstone, read our in-depth review of Pepperstone.
Before you start trading with this broker, this guide will help you to answer the question “is Pepperstone a safe broker?”.
Table of contents
Is Pepperstone Safe?
Pepperstone is a safe broker because it is regulated by several world-leading financial authorities, such as the FCA, ASIC and CySEC. The extensive scope of regulations ensures robust client money protection policies which, among all the features, forces the brokers to hold clients’ money in segregated bank accounts.
|Negative Balance Protection||Yes||Yes||Yes||Yes|
|Segregated Client Funds||Yes||Yes||Yes||Yes|
|Compensation Funds||20.000 EUR||85.000 GBP||No||No|
|Data and Privacy Protection||Yes||Yes||Yes||Yes|
Problems you may encounter with Pepperstone
Pepperstone is one of the safest brokers in the world, but we’d be lying if we said there are no potential drawbacks. Whenever a trader begins cooperation with a new broker, they need to familiarise themselves with different rules and policies, leading to misunderstandings. Here are some of the most common obstacles traders face with trading with Pepperstone.
As Pepperstone is a non-dealing desk broker, it means the company aggregates executable prices from numerous liquidity providers to offer clients the lowest possible price available at any given time. Since Pepperstone works with prices directly from the market, their trading conditions reflect any volatility in the market. Many traders misunderstand natural market behaviours and conclude that “they put their hand into the price”. Unfortunately, when spreads widen, or prices move abruptly, traders experience those authentic market conditions.
Unexpected withdrawal fees
When you make a withdrawal via bank wire, keep in mind that parties besides your broker are involved in the transaction. Some traders complain “when I withdraw my money, it took my 48 USD dollar and they said they provided 0 USD withdrawal fee”. Although it’s confusing, the broker could charge zero fees on withdrawals, yet it may still cost you money. It’s because other participants involved in the transaction may charge fees, such as the correspondent bank, as well as your own bank.
In many jurisdictions, brokers are obligated to follow certain security standards. In the case of Pepperstone, the company requires two-factor authentication to be used to confirm a withdrawal request. This entails using either email confirmation or enabling Google Authenticator app within your client zone. Traders often wonder why “they cancelled my withdrawal requests 4 times”, and it’s probably because you forgot or didn’t know about the requirement to use 2FA.
Delayed wire transfer withdrawals
Banks operate far more complexly than you might expect and can be very strict on forex brokers. Sometimes traders deposit money to Pepperstone (discover all the Pepperstone deposit methods here) and are put in the uncomfortable situation of thinking “I did a transfer bank but after a long time they said they won’t accept the transfer from certain countries and charged me $100 fee anyway”. If there is a problem with your transfer, for example, it was not sent from your bank account, or some details were not provided correctly, then it might be refunded following an investigation.
Although Pepperstone does not charge any fees on the refund, they understandably will not pay feeds to return your failed deposit. Therefore, you’re liable for paying both sides of the transaction, which can be costly, especially for international transfers. Verify with your bank and make sure you also understand their fee policy too.
To avoid encountering such problems or troubleshooting any issue you’re facing, contact Pepperstone support or go to the broker’s website to review the available deposit and withdrawal methods. Be sure to check if the payment methods do not incur fees and which methods are available in your country, as some methods might not be available in certain countries.
Experiencing problems like this with Pepperstone is rare, and there are many advantages to trading with this broker. Get a complete understanding of the pros and cons of trading with this company, explore our Pepperstone broker review.
Company, Regulations and Licenses
Pepperstone was founded in Sydney in 2010 and has grown over the last decade to become one of the world’s most trusted forex brokers with almost 90,000 clients in 150 countries. The company primarily operates from its offices in Melbourne and London. Pepperstone, as a brand, consists of numerous regulated entities established around the world.
All in all, the business is regulated by;
- Pepperstone Limited UK: Financial Conduct Authority in the United Kingdom (FCA);
- Pepperstone Group Limited: Australian Securities and Investment Commission (ASIC);
- Pepperstone EU Limited: Cyprus Securities and Exchange Commission (CySEC);
- Pepperstone Markets Kenya Limited: Kenyan Capital Markets Authority (CMA);
- Pepperstone Financial Services (DIFC) Limited: Dubai Financial Services Authority (DFSA);
- Pepperstone Markets Limited: Securities Commission of the Bahamas (SCB).
Funds Protection with Pepperstone
As Pepperstone is licensed and authorised by several national financial services regulators across many continents, it validates its strict operational standards.
Just like we’ve explained already in the Pepperstone Professional Account Review, it’s worth remembering that Pepperstone segregates customers’ money from its own money used for operating the company. Moreover, Pepperstone stores customers’ money at Barclays Bank in England and National Australia Bank.
Barclays Bank PLC is an international bank in the UK and is available in more than 50 countries. National Australia Bank, also known as NAB, is one of Australia’s four largest financial institutions.
Depending on your location and trading account type (you can see in our Pepperstone account which one may fit your needs), negative balance protection might be available. There is also an additional safeguard for EU or UK clients, which is an investor compensation fund. The fund offers compensation up to €20.000 or £85.000 for EU and UK clients respectively, though this is not valid once you complete the procedure to open a Pepperstone professional account.
What happens if Pepperstone goes bankrupt?
Pepperstone holds clients’ money in segregated bank accounts. The broker does not have access to those funds, since the customer is the only person allowed to deposit and withdraw funds into the trading account. This means that if Pepperstone goes bankrupt, it cannot use their clients’ funds to repay its debts.
Data Protection with Pepperstone
It’s not just money which brokers are responsible for protecting but also your personal data. The topic of personal data protection has been in the spotlight for some time now, and online companies are constantly improving in this area.
Understandably, Pepperstone has to collect your personal data for allowing you to open a trading account to invest money in financial products. To comply with international anti-money laundering and counter the financing of terrorism, Pepperstone will ask you to submit documents to verify your identity and address. It will keep your identity documents electronically. Financial services providers are often required to retain information about their clients for several years after the relationship is concluded.
Pepperstone may collect other data such as your location, IP address, log information, your device’s ID, and on-site activity to strengthen the service’s security. It’s common practice to encrypt data sent from your computer to the broker’s systems. Doing so ensures internet transactions and client access codes transmitted across secure connections.
The terms and conditions dictate that Pepperstone will keep this information safe, and won’t share it with anyone, with some exceptions. Your information may be shared with other companies within the Pepperstone Group, with financial institutions, such as banks and payment providers, company employees and necessary services providers.
It’s worth noting that Pepperstone may be obligated to share your information with law enforcement and financial authorities if they are requested.
Support in case of emergency
Should you ever run into any trouble while trading with Pepperstone, you can rely on the brokers’ live chat, email and telephone support channels, plus various social media platforms. Moreover, the company’s website goes into great detail concerning how to troubleshoot common issues.
As an international online trading brokerage, Pepperstone offers support in twelve different languages, twenty-four hours per day, five days per week.
Pepperstone Safety and Trading
Before we conclude this analysis, whether Pepperstone is safe to trade with, we’ll finish with a quick assessment of measures taken to protect your trades.
Pepperstone has a reputation for being one of the best ECN, STP, non-dealing desk style brokers in the forex trading industry. The broker serves as a bridge between you and the liquidity providers they cooperate with to execute customers’ trades. Under this model, you can access some of the best possible prices and lowest spreads on numerous asset classes. One of the most notable features of trading with an NDD broker is the broker does not manipulate prices; their job is to execute your trades.
As we said before, Pepperstone is one the best ECN/STP forex brokers and you can read why it is a top choice for us at InvestinGoal.
Trading tools for safety
All of the trading platforms provided by Pepperstone offer numerous features and settings to ensure your orders and positions are protected from volatile trading conditions.
Inside MT4, MT5 and cTrader, you can expect to find stop and limit orders to control how you enter the market. Additionally, you can apply take-profit, stop-loss and trailing stop-loss features to determine how you exit the market if things go in your favour, or not.
About the Author
Always full of different interests, Luca started to get interested in the field of personal finance in 2014.
His self-taught studies led him year by year to become increasingly interested in the investment field.
To date, Luca actively invests in the stock market and cryptocurrencies, focusing on rising markets and the industries of the future.
His main role at InvestinGoal.com is to analyze and study in the smallest detail the brokers and their platforms, while checking carefully that the information shown by them is genuine.
In this way, he provides readers with a complete and truthful overview of the broker they might be interested in.