Jasmine Birtles
Your money-making expert. Financial journalist, TV and radio personality.
Is This Trading Platform Legit? Use My Checklist to Find Out!
Ruby Layram
7th Jan 2025
Trading platforms are online sites that allow you to invest in a variety of assets such as stocks, commodities and forex. While there are many excellent platforms available to UK investors, there are also an increasing number of questionable sites that aim to lure in hopeful investors to make a profit. Understanding how to know if a trading platform is legit is key to making informed decisions about where you put your cash!
So, how can you know if a trading platform is legitimate?
I’ve spent a lot of time reviewing different platforms and have used my experience to create a handy checklist. In this post, I will outline the key things to look for when deciding whether a platform is worth using and I will give you my free trading platform checklist that you can use to spot red flags.
By the end of this, you’ll be equipped to do your due diligence and make an informed decision.
Jump to: The best investment platforms in the UK (compared!)
1. Look for Regulation and Licensing
When it comes to any kind of financial platform, one of the first things you need to check is whether or not it’s regulated by a trusted authority.
Think of this like a stamp of approval from an official body that ensures the platform is playing by the rules.
If a platform is not regulated, that’s a huge red flag. Some of the most common regulatory bodies you should be looking for include:
- FCA (Financial Conduct Authority) in the UK
- SEC (Securities and Exchange Commission) in the US
- ASIC (Australian Securities and Investments Commission) in Australia
- CySEC (Cyprus Securities and Exchange Commission) in Europe
These organizations ensure that trading platforms comply with a set of rules designed to protect you, the investor. They help reduce the chances of fraud and ensure that the platform you’re using follows the necessary standards of fairness, transparency, and financial security.
But how do you verify if the platform is regulated?
The easiest option is to look for licensing information on their website. A reputable platform will proudly display this info, often in the footer or on a dedicated page about their licensing.
If you can’t find it, that’s your cue to proceed with caution.
A note about crypto exchanges: Whilst we’re on the topic of regulation, it’s important to point out that some cryptocurrency exchanges may not be regulated in the same way that stock brokers are. For more information, check out my guide on what to look for in a crypto trading platform.
This is due to the fact that crypto regulation is still a bit of a grey area!
Nevertheless, exchanges such as CoinJar and Kraken are registered with the FCA so must comply with certain rules.
2. Check for Transparent Fees and Costs
Next, it’s time to focus on fees!
If you’re just starting out, you might be tempted to overlook this part, but trust me, it’s super important.
Legitimate trading platforms are transparent about their fees, and they’ll provide clear details on everything you’ll need to pay, including:
- Commission fees
- Withdrawal and deposit fees
- Trading fees (for executing buy/sell orders)
- Spread fees (if applicable)
Take a look at the platform’s fee schedule, which should be easily accessible on their website.
If you can’t find it, or if the fees seem unusually high or complex, it’s time to get skeptical. A good platform will give you all the information upfront without any hidden surprises.
Remember: the less transparent a platform is about fees, the more likely they are to be hiding something. You don’t want to wake up one day and find out that the trading platform has been charging you hidden fees on top of everything else.
3. Read Reviews and Ratings
If you’re looking to confirm whether a trading platform is legit, the best way to get a feel for it is to check real user reviews.
Not just any reviews, though—make sure you’re looking at trustworthy sources.
Start by browsing reputable review websites such as:
- Trustpilot
- SiteJabber
- Reddit (look for discussions in relevant subreddits like r/Stocks or r/cryptocurrency)
If you see a lot of negative reviews complaining about slow withdrawals, hidden fees, or customer service issues, then you’ll want to think twice before signing up.
On the flip side, a platform with a solid track record and lots of positive feedback? That’s a good sign.
During this stage, it’s also a good idea to check that the platform is a legitimate registered business. You can use Companies House to see if a company is registered in the UK.
4. Look for SSL Encryption and Secure Payment Methods
Your security should always be a top priority. If you’re sharing your personal information, credit card details, or even your bank account information, you want to make sure that data is secure from hackers.
Check for a SSL certificate—that little padlock symbol in the browser bar next to the website URL. When you see that, it means the site encrypts your data to protect it from being intercepted.
Also, take note of the payment methods the platform offers. A legitimate trading platform will typically provide secure payment options, such as credit cards, bank transfers, and reputable e-wallets (like PayPal).
Be cautious if the platform only offers obscure or untraceable payment methods—it’s a big warning sign.
5. Customer Support Should Be Easy to Reach
If you’ve got a question or an issue, you want to make sure there’s a responsive customer support team you can turn to.
A legitimate trading platform will offer multiple ways to reach them:
- Email support
- Live chat (bonus points for 24/7 availability)
- Phone support (some platforms may not offer this, but it’s great if they do)
Test out their customer service before signing up. Send them a quick message or email and see how quickly they respond. If you’re left waiting for days or you can’t get in touch with anyone at all, that’s a massive red flag.
6. Check Their Trading Tools and Features
One of the key things that separates reputable trading platforms from scams is the range and quality of their trading tools and features.
If a platform is serious about supporting its users, they’ll offer features like:
- Educational resources: A legit platform will offer educational content to help you improve your trading skills.
- Advanced charting tools: Technical analysis is a huge part of trading, and a quality platform will provide the tools you need to analyze price movements.
- Demo accounts: Most good platforms offer demo accounts where you can practice without risking real money. This is perfect for beginners who want to get the hang of things before jumping in.
If a platform doesn’t offer these types of resources, or if the tools look basic and outdated, it might be time to move on to a better option.
The most important thing here is ease of use. When your money is on the line, you want to be able to use the platform confidently!
My top platforms for a user-friendly design are Etoro and IG. Both of these platforms make it easy to find what you’re looking for an offer options such as ready-made portfolios and expert insight to make the decision process easier.
Your money is at risk.
7. Research the Platform’s Background and History
Before you commit to any platform, take a few minutes to research its history.
Has the platform been around for a while?
Are they transparent about their company’s background and founders?
Check out the company’s About Us page, and see if they’ve been featured in reputable financial news outlets or magazines. You can also search for any mentions of the platform in online news to see if they’ve been involved in any major controversies.
A platform that’s been around for several years and has a solid reputation is usually a good sign that they’re legit.
8. Don’t Fall for “Too Good to Be True” Promises
This one is so important, I’m going to say it loud and clear: if something sounds too good to be true, it probably is. Legitimate trading platforms don’t promise quick, guaranteed profits. Trading comes with risks, and you should never trust a platform that promises you instant riches.
Be wary of platforms that advertise:
• Guaranteed returns
• Too-high-to-believe bonuses
• Secret algorithms for success
These are usually tactics used by scams or high-risk platforms that prey on inexperienced traders. Stick to platforms that provide realistic expectations and have a transparent approach.
9. Test the Platform with a Small Deposit
Once you’ve done all your research and everything seems legit, it’s time to test the platform for yourself. The best way to do this is by making a small initial deposit—nothing too crazy, just enough to see how the platform operates.
Check how easy it is to deposit and withdraw funds. If everything goes smoothly, that’s a good sign. But if you have trouble getting your money in or out, or if you face unnecessary delays, it’s time to walk away.
I also recommend using a demo account at this stage, if there is one available. Demo trading accounts allow you to test out the platform using virtual funds, instead of your own money. The best trading platforms will offer a demo account that accurately reflects real trading conditions so that you can get a sense of the platform before putting any money at risk.
10. Trust Your Instincts
Lastly, don’t underestimate the power of your gut feeling. If something feels off or you’re just not sure, proceed with caution. There are plenty of reputable trading platforms out there, and there’s no need to rush into one that doesn’t leave you with a sense of certainty.
My Legitiamte Trading Platform Checklist
As promised, here is a free checklist that you can use to assess trading platforms in the future.
• Regulation and licensing: Ensure the platform is regulated by a reputable authority.
• Transparent fees: Make sure you understand all the costs involved.
• User reviews: Research real user experiences to see if the platform has a good reputation.
• Security features: Look for SSL encryption and secure payment methods.
• Customer support: Test their responsiveness before committing.
• Trading tools: Make sure they offer the tools you need to succeed.
• Background research: Look into the platform’s history and ownership.
• Avoid promises of guaranteed returns: Be wary of platforms that make unrealistic claims.
• Test with a small deposit: Always test the platform with a small amount of money first.
• Trust your instincts: If something feels wrong, don’t hesitate to walk away.
With this checklist in hand, you’ll be able to approach your trading journey with confidence, knowing you’ve done your homework.
Have you come across a questionable trading platform? or perhaps you are unsure whether a platform is worth signing up to? Leave a comment below and our community will help you!
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Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.
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