Traders Union research: Only one-third of traders verify broker licenses
Most retail traders try to research brokers and investment opportunities before committing funds, but far from all of them verify key information through official sources. Traders Union research shows that trust in reviews, recommendations, and information published on company websites often substitutes for independent verification.
In the study “Do Traders Verify Before They Invest?,” Traders Union analysts examined how carefully retail market participants verify brokers and other Forex and CFD opportunities before committing money.
The results revealed a noticeable gap between researching information and independently verifying it. While 62% of respondents said they research unfamiliar financial opportunities very or somewhat thoroughly, only 34% are prepared to independently check a company’s license through an official regulator database. Another 57% try to confirm the information in other ways — through search engines, the company’s own website, reviews, or broker comparison services.
Reviews instead of verification
Regulation and licensing remain the single most important factor when choosing a broker, but only 31% of traders prioritize them. For 24%, reviews and feedback from other traders are the main source of information, while another 18% primarily focus on withdrawal history and customer complaints.
At the same time, only 34% of respondents consider independent verification through an official regulator to be the strongest confirmation of a company’s legitimacy. Others place greater trust in a broker’s long operating history, positive reviews, licenses displayed on its website, successful withdrawals, or recommendations from people they know.
The study also showed that recommendations can significantly reduce traders’ caution. More than half of respondents said that advice from an experienced trader they trust would lead them to reduce their own verification to some extent. Meanwhile, 11% would be prepared to rely mainly on someone else’s experience or even commit money without conducting additional checks.
Successful withdrawals increase trust
Traders’ decisions are also influenced by an initial positive experience with a platform. After a successful withdrawal, 43% of respondents would be willing to reduce further checks or increase the amount they invest, partly relying on their previous positive experience. Only 29% said they would still conduct full independent verification before committing substantially more capital.
At the same time, not all traders are able to identify the most reliable way to confirm a broker’s legitimacy. Only 38% named independent verification of a company through the relevant regulator as the strongest evidence of legitimacy. The rest selected a long operating history, a license displayed on the company’s website, successful withdrawals, reviews, or expert recommendations.
The biggest red flag for study participants was the inability to independently confirm a company’s regulatory status, an option selected by 29% of respondents. Another 23% said guaranteed profits would raise the greatest concern, while 19% pointed to serious or repeated complaints about withdrawal problems.
Earlier, Traders Union also published research on how retail traders use AI in trading.
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