eToro prepares to bring social investing to Britain
Social investment network eToro is to open up shop in the UK, having won approval from new regulator the FCA this month.
Founded in 2007, eToro is a social trading network that aims to revolutionise the way retail investors and high net-worth individuals connect with the market. The network has 2.75 million users in 140 countries, and is now planning to open its London office.
“Getting our social investment network FCA-regulated is a major milestone for eToro,” said Jonathan Assia, founder and chief executive at eToro. “We are pursuing a clear vision: to give our users the opportunity to invest and trade the markets in a simple and transparent way. As such we take transparency and user protection very seriously and have implemented a long list of self regulation rules to ensure everyone in our investment network is treated equally. Having the FCA stamp of approval makes it official.”
According to eToro’s own figures, the site has produced 42.45 million trades since 1 January 2012. Foreign exchange was the first market offered when it launched in 2007, but commodities like oil, indices and other instruments across various asset classes are also now available.
The company encourages users to ‘learn from the wisdom of crowds’, and provides a leader board of the most successful and most followed traders on the network. The panel can also be filtered by how much risk the user wants – low, medium or high. There are also pages displaying the most popular stocks, such as Apple, Google and Facebook ,as well as commodities such as silver, and currency exchange prices such as Euro to Japanese Yen. There is also a ‘practice’ mode where traders can dabble and test ideas before accessing the real market.
The platform is also available as an Android and iOS compatible smartphone app that enables users to manage their portfolio, receive trading signals and make trades.
eToro has online rivals, but these use a slightly different model. Nutmeg, for example, was founded three years ago to offer ‘institutional quality’ investment management online for retail investors. It too is regulated by the UK FCA. But eToro’s social media-style focus is a key differentiator; Spark Capital – a Twitter investor – is a major backer and has pumped millions of dollars into the project.
eToro is a Cyprus-registered company owned by RetailFX which provides its brokerage services in Europe under the MiFID rules. IC Markets provides the broking services in Asia, with FX Solutions serving the US subsidiary in America.