If you are reading this 24funds review, then it means that you have probably been searching for a broker to start online trading. There is no doubt that the financial markets are very lucrative and everyone wants to join the trend, but the risks also exist. Choosing the wrong broker is one of them because not all companies that you come across are really legitimate. As a matter of fact, it is extremely easy to find stories of thousands of scam brokers that have popped up in the space and exploited people from all over the globe.
Your goal behind starting online trading is to make money, not to lose it, but it will happen if you don’t select the right broker. How do you do that? The key to remember is that you don’t just fall for appearances. Taking anyone’s word for what they claim to offer you is a big mistake because no company will ever disclose their shortcomings or flaws. It is your job to dig them up, something that you can do with this review of 24funds, which is presented as a comprehensive and legitimate platform. Yet, you will discover that the reality is quite different. How? Check out the issues below:
Regulation and Licensing
When you want to learn the truth about any broker, always start with their regulation and licensing because that’s a dead giveaway of who they are. A legitimate company would always obtain appropriate licensing and become regulated, no matter how much trouble it may be. While this doesn’t mean that all unregulated companies are frauds, but the risk is just too high. Unfortunately, 24funds is not a regulated entity either and what’s worse is that it is an offshore brokerage that’s based in the Commonwealth of Dominica.
The problem is that Dominica is often regarded as a safe haven for most scam companies because they are not required to be licensed there and don’t have to follow and rules and laws. The fact that 24funds is hailing from such a destination is enough to throw their legitimacy into question.
It is essential for any trader to know what fees would be charged by the broker they sign up with because it directly affects their bottom line. It is understood that you want the lowest possible fee, without making any compromise on quality, but it is not something you can achieve with 24funds. As a matter of fact, a close look at their fees will tell you that it is on the high side. According to their Terms & Conditions, traders using their services will have to face a processing fee of around $35.
In addition to these fee, they will also have to pay a 10% levy on the withdrawal amount, if they don’t have a turnover of about 200 times. Achieving this kind of turnover is a superhuman task and not possible for anyone to achieve. Therefore, no legitimate brokerage would ever impose such a condition on their clients, yet you will find so at 24funds. In fact, a lot of legitimate companies are actually waiving off this fee as a sign of good faith.
Apart from this fee, you will find that 24funds also has a fee for dormant accounts. This shouldn’t raise any red flags because many other companies do charge fees for inactive accounts, but the problem is that not that 24funds is charging this fee; the problem is that their charges are excessive. They will charge a 10% fee if you have not used your account for six months, which is quite high.
When you go through the offerings on the 24funds website, you will find that they are promising their clients a bonus. There was a time when these bonuses were the norm, but due to their exploitative nature, a number of regulators imposed a ban on them. A quick look at the 24funds bonus policy will show you that it is indeed malicious. First and foremost, they have imposed a restriction of clients having to achieve a specific turnover to withdraw funds from their account, which includes their deposit as well as bonus.
Secondly, according to the withdrawal policy of 24funds, traders can only withdraw profits that are made from their own deposits and not the ones generated via the bonus they are given. The problem is that there is no way to distinguish which funds fall into each category, which means that you will essentially not be permitted to make any withdrawals. Such practices are highly common in scam brokers and it indices that 24funds is one.
Of course, every trader wants high leverage during trading, but this comes with certain risks as well. Consequently, regulators have restricted brokerages from offering high leverage to their clients. But, checking out the offerings of 24funds show that they promise a 1:500 leverage. This is quite high and not something that most legitimate brokers would offer to their clients.
The most important feature offered by any brokerage is their trading platform because this software is used for doing the actual trading. When you check out the 24funds’ website, you will find that they offer two trading platforms to their clients. The first is MetaTrader 5, which is considered the industry standard and the second is a web based platform. The latter is usually what you will find being offered by most shady brokerages out there. The former is the only redeemable offering you will come across.
Yes, the MT5 trading platform is available at 24funds and they also offer high leverage of 1:500, but it is essential to remember that these are not good enough to ignore the other issues with the broker. Bear in mind that an unregulated brokerage can up and vanish whenever they want and you will not be able to do anything about it. Likewise, the high and excessive fee at 24funds will also eat into any profits you make, provided you can withdraw them considering the impractical withdrawal policy.