Alpari vs FXCM
This Forex broker comparison will focus on Alpari and FXCM, both large global brokers that have faced some strife and complications in recent years. Alpari International is operated out of lightly regulated Mauritius. The company boasts over 2,000,000 clients and has a distinct focus on PAMM accounts. Alpari has a questionable past with subsidiaries filing for bankruptcy or entering and exiting select markets. FXCM relocated to the UK, leaving its troubled past behind after losing its US license amid scandals, malpractice, and fraud. Under new management and as a Leucadia company owned by Jefferies Financial Group, this broker is rebuilding trust with an excellent trading environment.
This broker comparison will focus on the following four aspects plus an ultimate verdict:
|Feature||Alpari (visit site)||FXCM (visit site)|
|FSC||FCA, ASIC, FSCA|
Type of Broker:
|Market Maker||No Dealing Desk, Dealing Desk|
U.S. Clients Allowed:
|£100 or a currency equivalent||£300|
Commissions / Spreads:
|Yes for clients under FXCM LTD, FXCM AU and FXCM ZA|
Features and Platforms
Traders may choose between the MT4 and MT5 trading platforms, but Alpari merely provides the most basic versions without any of the required third-party plugins to unlock their full potential. It renders both choices insufficient and lacking critical features. This broker provides ECN accounts without noting which ECN bridge it deploys to connect the MT4/MT5 accounts to the Electronic Communication Network (ECN). Due to the lack of transparency, it remains unclear if ECN trading is enabled or noted for marketing purposes.
PAMM accounts are a fundamental focus of Alpari, with over 56,000 catering to more than 550,000 traders. It additionally supports social trading via its Alpari CopyTrade platform. Educational material via webinars and written content allows new traders to increase their knowledge about the Forex market. Research is provided on the Alpari.com website but is absent on Alpari.org. A loyalty cashback program reduces trading costs for active traders.
Alpari provides excellent trading conditions to over 2,000,000 traders with a heavy focus on retail asset management.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74.74% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
This broker’s proprietary Trading Station provides a superior trading portal as compared to the MT4 trading platform, which is available as the most basic version. Traders may opt to utilize the independent NinjaTrader or engage in social trading through market-leader ZuluTrade. All trading platforms fully support automated trading, and FXCM enhances trading conditions via a suite of tools that support algorithmic trading solutions.
FXCM features an outstanding selection of written content covering financial markets and trading-related topics. New traders are encouraged to try the educational course before deploying funds to their live account. FXCM Plus, the prime service provided by this broker, provides traders with market analytics and trading signals. Auxiliary trading services create an exceptional trading environment, evident in the failure rate of traders currently noted as 69.66%.
FXCM hosts a very competitive trading environment and fully supports automated trading.
|Type of Platform:||MT4, MT5||MT4, Trading Station, NinjaTrader, ZuluTrade|
Guaranteed Stop Loss:
Interest on Margin:
Alpari presents over 250 assets with the primary focus on the Forex market. The commodity and equity CFD selections are unacceptable, index CFDs grant entry-level exposure, while cryptocurrencies are scarce. Pure Forex traders will be pleased, but proper cross-asset diversification is not possible. FXCM’s distinct weakness is asset selection. The Forex market is inadequately represented, with merely 39 currency pairs. Commodity and cryptocurrency assets are limited, while equity trading is unavailable. Index CFDs provide entry-level exposure to this sector.
Typical Spreads and Fees
Spreads at Alpari start as high as 1.7 pips in the Micro account, lowered to 1.2 pips in the Standard account. It is slashed to 0.4 pips in the ECN account for a commission of $3 per round lot ($1.50 per side). FXCM deploys a more competitive pricing environment with commission-free spreads as low as 0.6 pips. A reduction to 0.2 pips for a commission of $25 per $1,000,00 or $2.50 per lot, further increases the competitiveness at FXCM.
Both market makers charge swap rates on leveraged overnight positions. Traders may obtain precise amounts from inside the trading platforms. Corporate actions like dividends or mergers impact equity and index CFDs and are either debited or credited to and from accounts. Third-party charges regarding deposits and withdrawals apply, and FXCM carries a £50 inactivity fee. Alpari and FXCM deploy a very competitive cost structure, but active traders will find a better pricing environment at FXCM.
The ECN account at Alpari is competitively priced, with spreads as low as 0.4 pips for a $3.00 commission.
FXCM presents a very transparent execution model and a cost-effective trading environment.
Security and Trust
Alpari’s owner, Exinity LTD, is regulated by the Financial Services Commission (FSC) in Mauritius as a full-service investment dealer excluding underwriting services. Enhancing protection is participation by this brokerage in The Financial Commission’s compensation fund. It provides coverage up to €20,000 per case, on par with EU regulated entities. The Financial Commission is the world’s first external dispute resolution (EDR) mechanism operated out of Hong Kong.
This broker does have a troubled past of bankruptcies and market exits while remaining in full compliance with its regulator. Following the 2015 de-pegging of the Swiss Franc from the Euro, Alpari’s UK subsidiary filed for bankruptcy. Three months later, it lost its NFA license in the US. In 2012 Alpari acquired a CySEC license, then chose to exit the regulatory environment in 2013. It was repeated in the Indian market with an entry in 2008 and an exit in 2014.
FXCM is primarily regulated by the UK Financial Conduct Authority (FCA), where traders enjoy the protection of the Financial Services Compensation Scheme (FSCS), up to £85,000. The Autorité des Marchés Financiers (AMF) in France, the Australian Securities and Investments Commission (ASIC), and the Financial Sector Conduct Authority (FSCA) in South Africa present supplementary regulatory environments. Accounts operated under the French regulatory framework are protected by the Fonds De Garantie Des Dépôts Et De Résolution (FGDR), up to a maximum of €70,000. The French regulated entity is fully compliant with the Financial Instruments Directive 2014/65/EU or MiFID II, and the EU’s 5th Anti-Money Laundering Directive.
During the twelve years ending in January 2017, under the previous management team, FXCM faced 13 CFTC reparations cases, 17 NFA arbitration decisions, and eight other US regulatory actions. The FCA, this broker’s current regulator, levied a fine of £4 million and £6 million in restitution paid to clients for defrauding traders. As a Leucadia company, FXCM has a clean regulatory record.
Alpari is regulated in Mauritius but opted for additional protection granted by Financial Commission in Hong Kong.
FXCM has been fully compliant with its four regulators since rebranding as a Leucadia company owned by Jefferies Financial Group.
Alpari vs FXCM Verdict
Alpari is a well-respected brokerage, as evident by over 2,000,000 traders, including 56,000 PAMM accounts with over 550,000 participating traders. The asset selection requires improvement, but the broad trading environment granted in its ECN account is competitive. Regrettably, this broker remains vague about its MT4 ECN bridge, and the turbulent past at Alpari should be considered.
FXCM provides excellent trading conditions, enhanced by auxiliary trading services. It has taken proper steps in leaving its troubled past behind, with the single critical flaw being asset selection, which needs to be significantly expanded. There is plenty of untapped potential at FXCM. If asset selection is important to you, Alpari may be the right choice, but if trading conditions, education, and a user-friendly trading platform is what you need, there’s no choice that FXCM is the right broker for you.
Does Alpari or FXCM offer lower pricing?
The commission-free spread at Alpari starts from 1.2 pips versus 0.8 pips at FXCM. Alpari takes the lead in the commission-based alternative, where traders face a mark-up of 0.4 pips for a cost of $3.00 per round lot. FXCM shows 0.3 pips and a commission of $40 per $1,000,000 traded or $4.00 per round lot. Active traders can lower it to $2.50 per lot, allowing for a superior cost structure, but Alpari maintains overall lower pricing.
Which is better, Alpari, or FXCM?
It depends on the trading preferences of the trader. Alpari grants more competitive pricing for most traders and higher leverage. FXCM presents a superior trading platform and choices together with a broader asset selection, more valuable research and educational tools, and excellent execution statistics, suggesting an edged in the underlying technology. Both brokers represent a reliable choice with an edge in their respective core markets.
How many Forex pairs and CFDs are available to trade?
Alpari maintains 60 Forex pairs while FXCM lists just 40. The former displays an additional 33 CFDs, taking the total confirmed selection well below the 250+ noted on the website. The latter does not provide a complete list of CFDs, but a random search of equities using the provide tools revealed more than what Alpari offers. Therefore, FXCM trumps Alpari in total asset selection and also presents basket trading but trails in the Forex market selection.
What about MetaTrader and copy trading?
The out-of-the-box MT4 trading platform is available at Alpari and FXCM, but the latter grants a superior overall trading platform selection. Social trading or copy trading at Alpari is available via its in-house developed Alpari CopyTrade, while FXCM supports it through market-leader ZuluTrade.