eToro Review – Is It The Best Trading Platform In The UK?

The Generation Money Guarantee

At Generation Money our purpose is to help you make better financial decisions. All of our articles are independently written and/or edited by finance professionals and adhere to strict editorial guidelines. This post may contain links which, if clicked, could result in a payment to the site. These links never impact our editorial policy and all rankings and product recommendations remain unbiased. For more details, read how this site is financed.

The Generation Money Guarantee

At Generation Money our purpose is to help you make better financial decisions. All of our articles are independently written and/or edited by finance professionals and adhere to strict editorial guidelines. This post may contain links which, if clicked, could result in a payment to the site. These links never impact our editorial policy and all rankings and product recommendations remain unbiased. For more details, read how this site is financed.

Offer: Welcome Bonus of up to £50 when you invest at least £100 with InvestEngine (Ts&Cs apply)

In our independent eToro review, we cover everything you need to know about using eToro in the UK.

eToro logo
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk. FSCS protected.


eToro is a popular trading platform which allows you to trade directly in stocks and ETFs and also to trade Contracts For Difference (CFDs). Through CFDs you can trade FX, cryptocurrencies and commodities in addition to stocks and ETFs.

In this eToro review we’ll go into detail on its investment options, accounts, pricing, innovative features and safety. 

I’ve traded CFDs for over 15 years and have used and tested eToro extensively. As a Chartered Accountant, I’m also used to keeping control of costs and that’s no different when it comes to investing fees, so check out my detailed cost analysis in this review of eToro.

Read on for our full eToro review, or use the links below to skip ahead to a particular section:

eToro Review: Pros & Cons

eToro Pros

Investment Options – eToro offers its users a wide range of assets to invest in. With over 1,700 different shares and access to international indices, ETFs, FX pairs, commodities and cryptocurrencies, eToro has a huge amount available to investors and this is one of their major selling points.

User-friendly – Investing your hard-earned money in the financial markets can be daunting but eToro’s user-friendly platform with its intuitive design makes it far less intimidating than many of its competitors.

Unique Features – eToro is one of the few brokerages that offers innovative social features including its CopyTrader feature which allows you to copy the trades of successful traders. You can also communicate with other traders on their social feeds.

Cost – With no annual fees, commissions, and tight spreads, eToro is one of the most cost-competitive brokerages available in the United Kingdom. Its share dealing is also commission-free, unlike the more traditional investment brokers.

Free Demo Account You’re able to open a demo account for free and practice using the platform before committing your money.

eToro Cons

No ISA or SIPP – Unlike many other investing platforms, eToro does not currently offer a Stocks & Shares ISA or a SIPP. 

Currency Conversion Fee – While eToro are generally competitive when it comes to fees, they still have a relatively high currency conversion fee of 0.5%

Withdrawal Fee – there’s a fixed withdrawal fee of $5 every time you withdraw money from your account, no matter the size of the withdrawal.

Customer Support – Some customers have noted poor experiences in relation to eToro’s customer support services in the past. however, eToro appears to have invested in improving customer support over the last 12 months.

eToro Review: What is eToro?

eToro is an Israel headquartered broker that was founded in 2007. Since then, eToro has only grown in popularity with over 25 million users worldwide. 

It’s one of the pioneers of commission-free trading on real stocks and ETFs as well as app-based trading. eToro is also popular with full-time traders. Investors who use eToro enjoy access to a wide range of investment options including stocks, Exchange Traded Funds (ETFs), commodities, traditional currencies and cryptocurrencies. 

eToro is also one of the leading brokers that offers the ability to trade Contracts For Difference (CFDs), highly leveraged instruments which allow you to short assets as well as buy them. More on these later in this eToro review.

More recently, the platform offers a unique social feature that allows investors to communicate with each other. One of the most popular social features is the “CopyTrading” function that allows investors to copy the investments of the most successful traders on the platform.

You can watch what these traders do in real-time or set your account to automatically mimic their investments. This comes with a high level of risk, and we discuss this in more detail later in this review of eToro. 

Beyond their innovative features and unparalleled safety score, eToro also provides weekly seminars and educational content that make them an easy choice for inexperienced investors who are looking to develop their financial education. Further, eToro provides a sleek, user-friendly platform that allows new investors to effortlessly navigate its platform.

Who owns eToro?

eToro’s parent company is eToro Group Limited, a company based in Tel Aviv, Israel, and currently led by Yoni Assia. Interestingly, last year eToro registered to IPO through a Special Purpose Acquisition Company (SPAC) FinTech Acquisition Corp. V. 

SPACs were a big trend in banking in early 2022 when I still worked in professional finance. They’re essentially public listings of investment companies before they’ve actually bought or invested in real businesses.

However, eToro and its potential investors did not go ahead and instead eToro conducted an equity raise generating $250m in 2022 which it says will be used to further grow the business.

eToro Review: How Does eToro Work?

Fundamentally, eToro is a broker which allows you to buy and sell a range of different assets including global stocks, commodities, cryptocurrencies, ETFs and FX pairs through its online platform or its mobile app.

Users are able to deposit funds, starting with a minimum initial deposit of $100 in the UK. The minimum deposit in other countries varies and starts at $50. Note that eToro’s ‘base’ currency is US Dollars, so you will have to convert your cash from pounds to dollars to invest in any assets not priced in dollars, for which you will have to pay a conversion fee.

eToro is broadly divided into trading and investing. Trading through eToro is focused on CFDs, which are highly leveraged financial instruments that allow you to buy and sell various assets without directly owning them. 

Investing on eToro focuses mostly on commission-free stocks and shares where you do own the underlying stock when you invest and it does not involve leverage. You can also directly own cryptocurrencies* using the eToro Money crypto wallet. When placing a trade, eToro makes it clear whether you’re buying or selling the underlying asset as shown below when we opened a market order to buy Bitcoin in eToro’s online platform:

eToro market order for BTC for eToro review

*Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong.Take 2 mins to learn more.

eToro Review: What Products & Features Does eToro Offer?

Let’s take a comprehensive look at all the investment options and features that are available on eToro’s platform.

As mentioned above, you can either directly buy an asset on eToro or use a CFD to get exposure to an asset without actually owning the underlying asset. 

At the time of writing (August-23), we confirmed the below investments available on eToro’s platform:

  • Stocks & Shares: 3,208
  • ETFs: 325
  • Cryptocurrencies: 74
  • Indices (CFDs): 20
  • Commodities (CFDs): 32
  • Currencies (CFDs): 52
  • CopyTrader Verified Traders: 24,000+
  • Smart Portfolios: 86

We’ve put CFDs in brackets where that asset can only be traded with CFDs. Stocks and ETFs can be bought both directly or through CFDs.

In this part of our eToro review, we look at each investment option and feature in more detail.

Stocks & Shares

With over 3,200 shares from 19 different stock markets, you’re likely to find the company you want to invest in on eToro. While this is not as many shares as can be found on some of its rivals, eToro still offers enough variety to satisfy the investing needs of most investors.

Fractional Shares at eToro

Further, eToro is one of the few brokerages in the United Kingdom that offers its users the opportunity for fractional ownership of shares. This is especially important for new investors with small amounts of capital looking to invest in larger companies like Amazon or Apple.

The share prices of these companies are high and buying an entire share can be quite difficult for investors with small amounts of capital to invest. Fractional ownership allows these investors to invest whatever they can afford in exchange for a fraction of a share. 

For example, if Amazon trades for $3,000 per share and an individual has $300 to invest, eToro will allow them to purchase 0.1, or 10%, of a share of Amazon. If you’re a beginner investing starting out with a small amount of capital then this could be an attractive option for you.

Commission-Free Shares At eToro

One of the pros of investing with eToro that was highlighted at the start of this review was that eToro is very competitive in terms of their fees. One of the main reasons for this is, unlike many other UK-based brokerages, eToro offers its users commission-free shares.

It should be noted that this generous commission-free share policy only applies to investors purchasing shares. If you choose to make use of other financial products such as CFD’s or apply leverage to your investment, fees will apply.

eToro Stamp Duty

In addition to the commission-free shares, eToro also waives all stamp duty fees on any shares purchased on the platform. Typically, UK-based investors would be subject to a 0.5% stamp duty fee on any shares purchased. In other words, you would usually be expected to pay £50 in stamp duty for every £1,000 that you invest. 

This makes eToro one of the most cost effective platforms for buying and selling shares, although you can’t do so in a Stocks and Shares ISA. We look at costs in more detail later in this eToro review.

Exchange Traded Funds (ETFs)

eToro also provides access to a wide range of ETFs. These funds will allow you to invest in baskets of different stocks through a single investment. Currently, eToro provides access to over 300 different funds through its platform.

For example, if you were interested in investing in large Chinese companies, you would be able to purchase the ETF shown below instead of having to purchase the shares individually:

iShares China Large-Cap ETF on the eToro trading app

Similarly, eToro offers access to the ever-popular VOO ETF which tracks the S&P 500 index. This means that by purchasing this ETF, investors are gaining exposure to the top 500 companies in the US markets.

ETFs are also covered by eToro’s commission-free trading, so long as you don’t use leverage, and therefore you will only pay the ongoing fund charges. These are the underlying costs charged by the fund manager, and apply regardless of the platform or broker used.

Contracts For Difference (CFDs)

The acronym “CFD” stands for Contracts For Difference. A CFD is a leveraged financial instrument that allows investors to speculate on the direction they believe the price of a security will go. CFD trading is one of the major offerings with eToro.

Investors can speculate that the value will either rise or fall and profit or sustain losses from the future price action of that security. If they are correct, their profit will be the difference between the original price and the price of the security when the trade is closed.

For example, if they believe that the price of Apple stock will rise from $170 to $200, they can purchase a CFD to capitalise on that gain. You may be wondering, why purchase a CFD instead of buying the shares directly?

Since CFDs are leveraged instruments, you can gain more exposure to your investment with a smaller amount of capital. In our example above, a trader would be able to leverage their Apple stock CFD investment by 5x meaning that a $1000 investment would control a $5000 position. Naturally, this would magnify any gains (or losses) that the investor would obtain if the trade moves as they expected (or doesn’t).

CFDs can be used on a large number of securities on the eToro platform including ETFs, Stocks, Gold, Silver, and Forex. However, it should be stressed that purchasing a CFD does not mean that you own the underlying asset, merely that you are exposed to its price movements.

As in our example, the investor who purchased a CFD of Apple stock with 5x leverage does not actually own any Apple stock but rather has $5000 worth of exposure to the price movements of that stock. 

eToro’s market execution window makes it clear if you’re trading a CFD:

A CFD order on eToro

Leverage is a double-edged sword and can magnify both your returns and your losses. As a result, we strongly recommend that inexperienced investors take time to fully understand the risks involved before trading with CFDs or any other leveraged product. More on how leverage works below.

It’s also important to note that a CFD trade is not cleared through an exchange, unlike with directly purchasing a share. A CFD is entered into directly with the broker, in this case eToro, and means that the broker profits at your loss or loses at your profit.

Forex

The foreign exchange markets are among the most popular markets in the world due to their availability and liquidity. Unsurprisingly, eToro allows investors the opportunity to trade in the forex markets and as such offers its investors access to over 50 different currency pairs.

Trading FX with eToro can be done using up to 30x leverage – far more than on any other instrument. Greater leverage is common with FX brokers because, in absolute terms, most major currency pairs are not particularly volatile compared to equities and commodities.

Partly because of this, most currencies are quoted to 4 decimal places with changes in their price measured in ‘pips’ (the Japanese Yen being a notable exception). Pip stands for percentage in point and represents 1/10,000th of a currency’s price.

For example, if the pound against the US dollar (GBP/USD, also known as the ‘cable’ due to the cable lines running under the Atlantic Ocean) went from 1.2700 to 1.2800 that represents an increase of 1 cent. But in pips, it’s a movement of 100 pips (12,800-12,700 = 100).

Like most specialist FX brokers, eToro’s platform has a range of chart tools and indicators that can be used. If you’re a technical trader then you’ll probably be familiar with many of them, and having applied some of them ourselves when testing eToro’s platform they work fairly well.

Chart indicator screen on eToro
Chart indicators when trading currencies on eToro

The downside is that you don’t get the full customisation that you get with specialist FX platforms, such as Oanda, who have powerful desktop apps and MetaTrader 4 (MT4) integration.

If you’re a less frequent FX trader, though, eToro’s platform does a decent job of making it a smooth experience to trade currency pairs.

Cryptocurrencies

Cryptocurrencies exploded in popularity during the 2017 bull market and rose to mainstream prominence during the March 2020 rally that lasted well into 2021. 

While eToro does not offer the range of cryptocurrencies that are offered on cryptocurrency brokerages like Binance and Coinbase, eToro does have over 50 different cryptocurrencies available through its platform.

It’s important to note that cryptocurrency markets are unregulated in the UK, and any deposits you hold in cryptocurrencies will not benefit from eToro’s FSCS protection, nor can you use the Financial Ombudsman Service (FOS) if you have a complaint. Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

Commodities

Lastly, eToro has 32 different commodities that investors can purchase through their platform. These include all the major commodities such as gold, silver, copper, oil, and natural gas.

This even includes orange juice which at the time of writing has hit new highs:

Orange juice on eToro for eToro review
Orange Juice on eToro

All commodities are traded through CFDs with eToro, but you can choose the level of leverage from none to 10x. 

eToro Leverage Explained

Leverage is a financial tool that allows you to purchase more assets than the money you currently had available in your account would allow you to. Essentially, eToro will lend you money so that you can purchase larger amounts of an asset without needing to deposit more of your own money.

For example, if Google was trading for $200 a share and you wanted to purchase 5 shares, you would need $1000 to purchase the shares yourself. With leverage, eToro would only require you to have a minimum of $200 to purchase those 5 shares and would lend you the $800 you required. That $800 that was lent is called leverage, and in this case represents leverage of 5x or 1:5. 

Similarly, we noted above that CFDs were leveraged financial instruments that allowed you to gain additional exposure to assets without needing to invest more of your own money. These financial products use leverage to allow you to do this.

Leveraging capabilities are regulated by the European Securities and Markets Authority (ESMA). ESMA details the maximum amount of leverage that UK-based investors are permitted to access. These amounts change depending on the specific asset being leveraged. You can find a comprehensive breakdown of eToro’s leveraging limitations for different assets below.

  • Stocks & ETFs = 1:5 or 5x
  • Gold = 1:20 or 20x
  • Currencies = 1:30 or 30x
  • Non-Gold Commodities = 1:10 or 10x

Note that trading with leverage involves high risk.

Note that unlike many other CFD brokers, eToro allows you to choose your level of leverage when trading. The above breakdown of leverage ratios by asset is the maximum leverage you can trade with for each type of asset.

However, eToro allows you to choose the leverage in the order window which means you have more control over your exposure.

eToro leverage options for eToro review
Leverage options of X1, X2 or X5 in the centre of the order window

Being able to control the leverage ratio on a trade is a unique feature and is not available with Trading 212, eToro’s main UK rival. Using lower leverage also reduces the overnight interest payable if you keep your CFD trade open for more than one day.

eToro CopyTrader Review

Regularly referred to as the “social trading platform”, eToro has employed the use of a number of innovative features designed to assist inexperienced investors on their platform.

The eToro copy trading feature is one of the most coveted social features that eToro has developed. It allows investors to find successful investors on the platform and mirror their investments/trades.

This feature allows inexperienced traders to leverage the experience of other veteran traders by simply copying their investment strategy. It removes the need for the copier to do any of their own research or pick any of their own investments. 

For new investors, access to this kind of feature potentially provides a great deal of value. However, it also comes with significant risks if you decide to copy the trades of others as past performance is not a reliable indicator of future performance.

Investors can make use of this feature with any amount of money, provided they meet eToro’s $10 minimum. The copy trading feature divides your total investment amount by the same allocations as the investor you are copying. In other words, if the investor you are copying has $10,000 invested in Apple stock accounting for 10% of their portfolio, the copy trading feature will take 10% of your investment and allocate it to Apple stock.

After you have made your initial investment, the copy trader continues to monitor your chosen investor and updates your investment based on their decisions. If they sell, you sell. If they buy, you buy. It’s that simple! Investors can close their copied positions at any time and the feature is entirely free to use making it very accessible regardless of the size of your portfolio.

However, investors should exercise caution when deciding on which investor they should copy. Remember, if you copy an investor and they lose money, you also lose money. Be sure to do your research and refrain from copying investors who take on more risk in their portfolios than you are comfortable taking on in yours. 

eToro Smart Portfolios

Smart Portfolios are investment portfolios that you can invest in by automatically copying their trades at no extra cost.

The portfolios are split into 3 broad categories: market portfolios, theme portfolios and partner portfolios.

Market portfolios and Theme portfolios are created and managed by eToro’s investment team. They employ the use of artificial intelligence and mechanical trading systems in an attempt to maximise performance, and are run according to the eToro Investment Team’s discretion. Partner portfolios are managed by external investment management companies.

Fore more on investing in ready-made portfolios, read our guide to the best robo-advisors in the UK.

eToro’s Smart Portfolios

Most of eToro’s Smart Portfolios are created and managed by eToro. These allow investors to target specific market segments within the markets, as well as targeting specific assets or commodities. 

For example, one theme is Electric Vehicles (EVs). This portfolio will target companies that operate within the EV space like Tesla or Nio as well as perhaps other secondary companies like battery or chip producers.  

Further, you can choose a portfolio that invests in a basket of cryptocurrencies. There’s also a portfolio that invests based on eToro’s community traders, where eToro uses an algorithm to select which traders to include. 

Smart Portfolios may include CFDs as well as direct purchase of assets. The minimum investment is $500 and there are no additional charges for investing in a Smart portfolio. You will pay whichever fees are required to build the portfolio for you, such as market spread plus broker spread and leverage changes if CFDs are used.

You’re able to easily view portfolio stats, including the exact makeup of the portfolio, and its past performance in the eToro platform. 

Partner Smart Portfolios

These portfolios are created and managed by companies outside of eToro. When you click on a Partner portfolio, you will be able to see all the details of who has created it and their investment methodology. 

As with eToro’s portfolios, you can easily see all the data and past performance of Partner portfolios in the eToro platform.

eToro Alternatives: How Do eToro’s Investment Options Compare To Rivals?

Above in this eToro review we covered in detail the various investment options and products that eToro offers. But how does it compare to its main UK rivals?

Below we’ve summarised the options available with the leading trading and investing platforms compared to eToro:

Investment OptioneToroTrading 212LightyearFreetradeAJ BellInteractive InvestorHargreaves Lansdown
Stocks & Sharestickticktickticktickticktick
Investment Trustscrosscrosscrosstickticktickticktick
Mutual Fundscrosscrosstick*crosstickticktick
ETFstickticktickticktickticktick
Bonds & Giltscrosscross**crosscrosstickticktick
Commoditiesticktickcrosscrosscrosscrosscross
Cryptocurrenciesticktickcrosscrosscrosscrosscross
FXticktickcrosscrosscrosscrosscross
CFDsticktickcrosscrosscrosscrosscross
*Lightyear offers Money Market Mutual Funds only.
**Trading 212 allows CFD trading of US Treasury Futures but you cannot buy the underlying bonds.


Fore more on how eToro compares to Hargreaves Lansdown, read our eToro vs Hargreaves Lansdown comparison. Fore more on how eToro compares to Trading 212, read our eToro vs Trading 212 comparison.

eToro Review: Using eToro

Now, we take a closer look at what it’s actually like using eToro for trading and investing.

Charts, Tools And Analysis

Through eToro’s platform you have access to a strong all-round set of information and data for any stock or asset you’re looking at.

We used Tesla as an example, shown below, of the data and information you get, which includes its most recent financial reports. On the ‘Stats’ tab you first see a snapshot of Tesla’s key financial information:

Tesla summary stats on eToro for eToro review
Tesla’s summary stats on eToro (at the time of writing)

Scroll down further and you can see more detail on its latest financials, which you can toggle between yearly and quarterly:

Tesla financial statements summary on   eToro for eToro review
Tesla financial statements summary on eToro

As an accountant, it’s very useful to see their financial statements in an easy-to-digest format like this, including cash flow statements.

You’ll also be able to see the latest news on a particular security or stock, and there’s a ‘Research’ tab with the latest research too, which goes into more detail beyond the snapshot on the summary page.

Under the ‘Chart’ tab you’ll also be able to add a range of analytics and analysis tools to the price chart. Below, we added a moving average and Bollinger Bands to Tesla as an example:

Tesla chart showing moving average and Bolling Bands applied to it on eToro for eToro review
Tesla chart showing moving average and Bolling Bands applied to it on eToro

If you’re a technical trader you’ll probably be satisfied with the range of chart tools available with eToro, which are commonly seen with CFD brokers.

Pro Trader accounts will have access to even more tools and features, but you must be able to demonstrate to eToro that you have the required skills, capital and knowledge to become a Pro Trader account holder. 

Research And Learning

eToro has significantly invested into its training and educational materials in recent years, matching those seen at other CFD brokers.

This is mainly by running the eToro Academy, which is a series of educational fides and videos on all things investing and trading that are available through eToro.

Beginners will find this particularly useful, especially the worked examples it provides, and should provide a good basic understanding of investing and trading.

As usual, though, any serious trader should do their own research and build their skills using a wide range of sources. 

As well as the eToro Academy, you can open a Demo Account that allows you to use eToro’s platform with $100,000 in demo capital. This is a useful way of testing any investing or trading strategies before trying them with real money. 

Ease of Use

Overall, eToro’s platform is especially easy to navigate. The layout of the platform is so straightforward that most inexperienced investors will be able to operate their accounts with minimal issues.

The layout and design will appeal to younger users, with heavy emphasis on the social trading features, and lots of information presented around ‘Daily Movers’ and ‘Most Popular’ stocks.

Building and adding to watchlists is easy to do, and setting up alerts is simple too. I often make use of limit orders when trading over the shorter term and these are clearly explained on order execution forms and I found them to be very easy to execute.

eToro Review: Can You Invest in a Stocks & Shares ISA with eToro?

No. Unfortunately, eToro does not currently offer a Stocks and Shares ISA, or any other type of ISA. It also does not offer Self-Invested Personal Pension (SIPP) accounts.

The lack of an ISA is especially disappointing as tax-free investment vehicles are typically the first port of call for new investors. As such, we hope eToro begins to offer this type of account in the future.

eToro Review: Fees & Charges Explained

Although eToro is one of the cheapest brokerages in the United Kingdom for buying stocks and shares, it charges a range of fees depending on how you use it. Let’s take a look at what these are.

Currency Conversion Fee – When depositing money into eToro, UK-based users will be required to convert their GBP to USD. eToro charges a 0.5% currency conversion fee when you deposit money into your account.

Withdrawal – Eventually, you will likely wish to withdraw your money from the eToro platform. eToro charges a $5 USD fee each time you make a withdrawal, with a minimum withdrawal of $30.

Inactivity – If your account has been inactive for over a year, eToro will charge a $10 USD per month fee.

CFDs – eToro charges “overnight” and “weekend” fees on any open CFD positions. Users can see these charges at the bottom of their trade windows when opening these positions. Holding CFDs over extended periods can be costly, so check carefully before entering into any CFD trade. Full details of CFD charges, and how they apply to each type of asset, can be found on eToro’s website here.

Broker Spread – The spread is the difference between the bid price and the offer price. When investors purchase assets in the eToro platform, they will notice their positions start at a loss. That is because eToro sells you the asset for more than the asset is worth. The difference between the true cost and what eToro sells it to you for is known as the spread. eToro only charges broker spread on CFDs. Directly buying stocks and shares and ETFs will not incur eToro’s spread, but will incur market spread which is outside of eToro’s control.

As you can see, while investing through eToro can be cost-effective, especially for buying stocks and ETFs, investors who hold assets for long periods without activity or regularly withdraw money from the platform may find that fees can quickly add up.

FeeAmountWhen Charged
Currency Conversion Fee0.5%Every non-USD deposit
Withdrawal$5Every withdrawal ($30 minimum to withdraw)
Inactivity$10Monthly fee after 12 months of inactivity.
CFDsMarket spread and overnight (financing) fees. Fee is dependent on the assets being held. Full details on eToro’s website.Nightly/Weekends

eToro Review: How Does eToro Make Money?

Given its commission-free stocks and ETF investing, it may not be immediately obvious how eToro makes money, especially for beginner investors.

In the UK, eToro generates revenue through the fees it charges which are outlined above. CFDs, in particular, are known to be a strong revenue earner for brokers as they come with both a spread charged by the broker as well as financing fees if leverage is used.

eToro gives an example on their website of an overnight CFD trade using 20x leverage to buy EUR/USD with an initial investment of $1,000, generating around $7 in fees for them.

As we outlined above in this eToro review, a Contract For Difference is a derivative contract entered into with the broker. Essentially, if you go short on a position, the broker is long on that position. In other words, the broker wins if you lose unless the broker chooses to hedge their CFD exposures.

Given that the majority of CFD traders on all CFD platforms lose money, there is an incentive to not hedge positions and simply take the other side of CFD trades. This is a potentially very high revenue earner.

There are also the above non-trading fees which make money for eToro too, primarily the fixed withdrawal fee of $5 on all withdrawals and the currency conversion fee of 0.5% on all non-USD deposits.

According to documents filed when eToro was planning to go public via a SPAC last year (outlined above), it generated $198 million in earnings before interest, tax, depreciation and amortisation (EBITDA) in 2018.

eToro Review: Is eToro Safe?

In the UK, eToro is regulated by the Financial Conduct Authority (FCA) and is part of the Financial Services Compensation Scheme (FSCS). This means that your deposits will be protected up to the value of £85,000 by the regulator. 

However, it’s important to note that there are two exceptions to this – eToro Money is not covered by the FSCS and neither are Cryptocurrency deposits. In fact, the FCA does not regulate the crypto market in the UK at the moment, so you will also not be able to complain about any Crypto-related issues to the Financial Ombudsman Service. 

Despite this, eToro still has protections in place. All deposits with eToro, including eToro Money, are stored in separate, segregated bank accounts held with regulated banks. As a result, eToro states that in the event of their liquidation they would still return all deposits to customers.

As part of financial regulation in the UK, eToro must produce what’s called a Pillar 3 disclosure. These are more commonly associated with banks, but essentially require regulated firms to provide key information about risk and risk management of the firm.

Without getting into the technical details, regulated firms are required to achieve a Total Capital Ratio of 8.00% or higher at all times. This is a measure of how much the firm’s own funds are in relation to its total risk exposure. Essentially, does eToro have an acceptable amount of funds on hand to be able to cover its potential financial exposure?

eToro’s latest disclosure (as at 31st December 2021) puts their Total Capital Ratio at 58.00%, far in excess of the regulatory minimum of 8.00%.

It’s important to remember that when you invest your capital is at risk. The value of investments can go down as well as up, and trading CFDs comes with even greater risk. It’s an FCA requirement for CFD brokers to disclose the percentage of investors who lose money trading CFDs with them, and for eToro that is currently 74% (August-23).

eToro Review: Customer Service

Good customer support is an important feature for any investment platform where you commit your money. A couple of years ago, eToro had a very mixed reputation for customer support, with it often being criticised on consumer review sites such as TrustPilot.

Fortunately, eToro has invested in improving the support it offers to customers over the past 12 months, and now gets much more positive feedback on it. 

You will be able to speak to an account manager at eToro, including via calls, so it’s good to know that you can speak to a real person. 

In addition, eToro has both a “help service” on the platform to assist customers with any questions they may have as well as an on-platform support ticket service that allows users to get assistance with any issues they may be having.

eToro Review: Customer Reviews

eToro is rated as “great” on TrustPilot, with a score of 4.4, having secured the rating from over 20,000 reviews. Similarly, eToro holds a 3.8-star rating on the app store averaged from over 8,000 reviews.

The most negative reviews about eToro seem to stem from individuals who are unhappy with eToro’s withdrawal fees or the lack of research services on the platform. 

As with most investment platform reviews, some customers complain of having lost money on their investments or trading which is usually not the fault of the broker.

All in all, customers generally seem to be quite happy with eToro with many praising the CopyTrader feature.

eToro Review – Final Verdict

eToro’s standout features are its social trading and community. Its CopyTrader service has pioneered copy trading and has become widely popular, particularly with younger and less experienced investors, so if that’s you then you will like what eToro has to offer.

If you’re looking for commission-free investing in stocks and shares, or ETFs, then eToro also offers this. But, and it’s an important ‘but’, eToro does not offer a Stock and Shares ISA so holding shares will potentially attract tax on any gains or income from them.

Despite offering commission-free stocks, eToro does charge currency conversion and withdrawal fees which can add up quickly if you make frequent transactions.

There are a wide range of investment options with eToro, including cryptocurrencies and CFDs, both of which come with greater risks. You won’t be short of options for what to trade, though, with thousands of assets to invest in.

In our view, eToro is an excellent choice for trading, so long as you’re comfortable using CFDs, as well as for investing as long as you’re happy to do so outside of an ISA. You can also try out eToro using a demo account before committing your capital.

eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 51% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

This communication is intended for information and educational purposes only and should not be considered investment advice or investment recommendation. Past performance is not an indication of future results.

Copy Trading does not amount to investment advice.  The value of your investments may go up or down.  Your capital is at risk.

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

eToro USA LLC does not offer CFDs and makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication, which has been prepared by our partner utilizing publicly available non-entity specific information about eToro.

You May Also Like

Article by

I’ve been quoted on BBC News, Newsweek, The Sun, BBC Worklife, YahooFinance, Nasdaq and more.

Interactive Investor – £200 cashback

Get £200 cashback when opening and investing in a SIPP, or transferring a SIPP, to Interactive Investor. Terms apply.

Capital at risk if you invest. Interactive Investor is regulated by the FCA and has FSCS protection.

Interactive Investor – £200 cashback

Get £200 cashback when opening and investing in a SIPP, or transferring a SIPP, to Interactive Investor. Terms apply.

Capital at risk if you invest. Interactive Investor is regulated by the FCA and has FSCS protection.

 

Recent Articles