Trading 212 – The Key Points
Positives:
- Trading 212 are a fully regulated UK company.
- Customer deposits with Trading 212 are covered under the Financial Services Compensation Scheme (FSCS) up to £85,000 per customer.
Potential Concerns:
- Trading 212 have had some issues with onboarding new customers in the UK since 2021, when they stopped accepting new customers. In 2022, UK customers still have to join a waiting list to create an account. This may reflect some internal operational issues.
- Trading 212 are heavily focused on trading Contracts For Differences (CFDs). This is a very risky form of investing which leads to 70-80% of investors losing money, with the potential to lose more than your initial stake. Anyone using the platform should be well aware of the risks before trading in this area.
What Is Trading 212?
Trading 212 launched in the UK in 2017, ostensibly as a ‘free’ trading app. Users are able to trade stocks, shares and ETFs for free. There are however some costs involved (for instance for currency transfer) so it is not totally free. In addition, they focus on the trading of Contracts For Differences (CFDs), a more volatile form of investment. As a company, they have been very successful, claiming to have had 14 million app downloads from users in over 100 countries.
Is Trading 121 Safe – The Details
Regulation:
Trading 212’s UK activity is run by their UK company and as such is fully regulated by the Financial Conduct Authority (FCA).
Protection/Insurances:
Customer funds in Trading 212 are covered by the Financial Services Compensation Scheme (FSCS) up to a maximum of £85,000 per customer.
All customer investment funds are kept completely separate from company funds.
Investment Risks:
Trading 212 are a dedicated investment platform, and any investment has risks. It is possible to trade stocks, shares and ETFs with Trading 212, which is a less volatile form of investment than some, but there is still always the risk of not only your investment going down, but also to lose your entire investment.
Trading 212 also focus heavily on the trading of Contracts For Differences (CFDs). This is a volatile and risky way to trade, which can result in losing money quickly, and even losing more than your initial stake. Trading 212 themselves state that they make a large proportion of their revenue from CFD trading, so it is in their interests to encourage their users to trade CFDs. Customers should be very aware of the risks before doing so.
Data Security:
Trading 212 only have access to the data within your Trading 212 account – they do not access any other financial institutions you may use. With this data, they state that the follow all GDPR rules.
Resources:
Check the below links for places you can find reviews, discussion and a more in-depth look at Trading 212:
Trustpilot
https://www.trustpilot.com/review/trading212.com
https://www.reddit.com/r/trading212/
Is Trading 212 Legit?
Trading 212 are a properly regulated and stable UK company, that has all of the correct protections in place. There is some room for concern with their focus on volatile CFD trading. In addition, they appear to have experience some issues with their internal processes, leading to a freeze in onboarding new customers from the UK.