Premium Australian Forex Brokerage
- AUD 200 account minimum
- From “0.0” pip fee
- Highest quality trading for Australians
Since opening its doors in 2010, Pepperstone Group has become one of the best brokerages in the Australian financial industry. They have built a full-featured trading portal with highly competitive benefits that focuses on indexes, Forex, and commodity instruments. A wide variety of web-based, desktop, and mobile trading platforms accessible by multiple account types is attractive to novice traders. Their strategic networking structure allows for high-speed and versatile automated algorithmic trading as well as a variety of other execution styles.
Based in Melbourne, Pepperstone Group has added customer-facing features at an extremely rapid pace, causing the broker to increase the number of active accounts at an equally surprising rate.
With multiple layers of security, no dealing desk, and AUD 100 minimum opening deposit on new accounts, new traders find Pepperstone Group an attractive option. Additionally, there are many support paths, including 24/5 phone and chat support, an FAQ section with comprehensive answers and clearly stated policies regarding trade disputes, deposits, and withdrawals.
- Detailed trading guides
- Well-organized and easy to navigate website
- Advanced cryptocurrency trading
- Difficult to find fee disclosures
- Limited conditional orders
- No share trading
With professional indemnity insurance from Lloyd’s of London, the Australian-based broker is regulated in both the UK and Australia. In the UK, Pepperstone is regulated by the FCA (Financial Conduct Authority) under Company Number 08965105. In Australia, they are regulated by the ASIC (Australian Securities and Investment Commission) under ACN 147 055 703. Both regulators have “strict capital requirements” relating to accounting, risk management, and audits with traders operating in the UK receiving an additional £50,000 of protection through the FSCS (Financial Services Compensation Scheme).
Independent audits are performed by Ernst and Young with client funds kept separate from company funds at the National Australia Bank, thus limiting the risk of misuse. In accordance with ESMA regulations, all trading platforms provide negative balance protection through automatic stop-loss systems. However, the website contains a disclaimer that volatile market conditions may incur losses beyond the total deposit amount.
Pepperstone customers can choose from a broad range of trading platforms including MetaTrader 4, MetaTrader 5, and the higher-end cTrader (which provides advanced technical features such as algorithmic strategy, backtesting, and detachable charts). For customers still using MetaTrader 4, the Smart Trader Tools extension adds technical functionality across a wide range of tools, including in-depth market analysis, trade execution assistance, and market research.
Pepperstone’s rapid growth and adaptability have left some parts of its offering still struggling to catch up. One example of this is how the majority of account requirements refer to MetaTrader 4 and not to MetaTrader 5, even though MetaTrader 5 has been offered for some time. These account descriptions could confuse prospective clients who are trying to evaluate the broker. Similarly, the fee disclosures seemed to be organized around a different principle than the account descriptions. This could also cause some uncertainty about the total costs associated with each account type.
Pepperstone offers a wide variety of mobile trading tools including cTrader for iOS and Android as well as mobile versions for MetaTrader 4 and MetaTrader 5. Web access for iPads and tablets is provided by MetaTrader 4 WebTrader and cTrader Web (MetaTrader 5 WebTrader is not available). While all mobile versions are limited in their functionality, most customers will find them useful.
Research and tools
Pepperstone’s previously dedicated research portal, thefxlounge.com, has been taken off-line, creating a significant deficit in the research tools provided. Both cTrader and the MetaTrader applications provide some research features, but most account holders will be required to use the “Market Review” section on the website. This section offers access to expert industry analysis in Forex and commodities by Boris Schlossberg and Kathy Lien. The broker also offers a high-quality, regularly-updated YouTube channel; however, the integration with the main trading website is poor.
Additionally, Pepperstone offers an email subscription to “Daily Market Reports,” which provides information about trading opportunities and economic events. An exciting feature of the “Daily Market Report” is that the suggested trades allow for trading within the email, bypassing other software applications. One last additional source for market content, regular Forex updates, and Youtube links, is Chris Weston (Twitter handle @ChrisWeston_PS) who is Pepperstone’s head of research.
The Pepperstone website interface contains a wide variety of educational materials, including trading guides, tutorials, and webinars. Also, there is a large section related to commodity trading that carefully details topics such as margin, slippage, and hedging. This section of the website also doubles as the “Help” section as it provides deposit withdrawal procedures, platform comparisons, technical analysis tutorials, a market glossary, and platform guides.
Social and copy trading is also offered by Pepperstone through strategic partnerships with Myfxbook, Mirror Trader, and ZuluTrade. Comprehensive technical analysis is also added to MetaTrader 4 through the Autochartist Plug-In (free). The majority of these social trading features can also be accessed through the desktop trading platforms.
In addition to social trading, Pepperstone has another strategic partnership with Equinix. This partnership provides Pepperstone clients with low latency access to the interbank system through the New York-based Equinix Financial Exchange. A wide range of Virtual Private Server (VPS) options is also provided to high-end clients through this partnership.
Although offering five cryptocurrencies, seven commodity types, 14 index CFDs, and more than 60 currency pairs, Pepperstone surprisingly provides no share CFDs. This hole in the offering forces some account holders to miss opportunities in Asia and Australia. An additional disappointing note is that cryptocurrency fees are not well-documented. This can be concerning for many account holders has cryptocurrencies tend to be highly volatile and have wide spreads.
Pepperstone offers two main account types for new clients. The first is the Standard account which offers a 1 pip + spread cost but no commissions. The second type is the Razor account, which provides a zero pip + spread cost AND commission. For example, a $100,000 Forex transaction has a commission of $3.76 on both the “buy” and the “sell” side. Margin is also offered to account holders at up to 500:1.
Opening an account with Pepper Stone requires AUD 200 that can be funded from a variety of sources including PayPal, Bank Transfer, MasterCard, Skrill, Neteller, and Visa. Fees are charged for both deposits and withdrawals. Deposits from standard to credit or debit cards receive a 1.8% charge if transferring from an AUD source. If transferring from a non-AUD source, a standard 3% fee is charged. Withdrawal fees are more variable, starting at $0 when withdrawing using MasterCard Secure Code or Verified by Visa. In contrast, international withdrawals are charged a flat $20 fee. A review of the frequently asked questions and relevant site disclosures did not mention a dormant or inactive fee.
While Pepperstone offers up to 500:1 margin for major index CFDs, cTrader limits leverage to 200:1. However, both platforms restrict leverage on more exotic currencies. Swap fees, contract rollover, and daily financing are not transparent in the marketing materials or website FAQs.
A majority of inquiries will be addressed by the surprisingly complete FAQ section on the website. Industry-standard phone and chat support are offered 24/5 with additional support provided through online form entry and social media channels. Live chat response times average less than 5 minutes, and local clients can walk into the Melbourne-based main office. Additional offices are located in London, Bangkok, and Dallas.
What you need to know
Although the lack of share CFDs may be unattractive to European traders, Pepperstone outshines the vast majority of worldwide Forex brokers for Australian traders. Competitive pricing, multiple account types, absurdly fast execution systems, and numerous trading platforms along with professionally-handled trust issues and a commitment to new features will maintain Pepperstone’s lightning-fast growth into the next decade.
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All trading involves risk. More than 80% of investors lose in Forex and CFD trading. As these complex instruments allow for the use of leverage, there is a high risk of losing more money than you have deposited. Before attempting to participate in spread bets and CFDs, consider how well you understand them and if you can afford to lose your money.