eToro: Pros and Cons
Pro and Con
- Officially the world’s biggest social trading broker
- Holder of three Tier-1 licences: FCA, CySEC and ASIC
- Excellent mix of assets, including real stocks and cryptocurrencies
- Accounts funded in currencies other than USD attract substantial exchange rate costs
The eToro platform was first-launched in 2007 by three men with technological backgrounds and an avid interest in trading. They went on a mission to “disrupt the world of trading…” by making it accessible to all. The result was eToro, the world’s first ‘social trading’ platform.
The eToro enterprise was (and still is) funded by a group of venture capitalists and it remains a privately-owned company. Those experts who doubted the wisdom or longevity of the project have all been proven wrong as 24 years on, eToro is still going strong, with an estimated 15 million members scattered across the globe.
No other licensed social trading platform comes close to offering the same copy trading opportunities as eToro, or has such an eclectic mix of assets which includes real stock and crypto trading, CFDs and Forex. If you compare stock broker platforms, eToro has definitely succeeded in opening up this market to retail traders. Using the eToro dashboard-style platform is really intuitive and straightforward, appealing to even the most non-technical of users.
Plus500: Pros and Cons
Pro and Con
- A well-known, highly-regulated provider of CFDs since 2008
- Holds a total of five licences, three at Tier-1 level
- Numerous account funding methods offered, including PayPal
- Provides customer support 24/7 via live chat
- All assets have a pre-defined default leverage ratio, which cannot be adjusted
Plus500 was founded in 2008, making it one of the longest-standing and best-known retail brokers in the world. Plus500 is extremely well-regulated under the UK’s FCA (Financial Conduct Authority), CySEC Cyprus Securities Exchange Commission) and ASIC (Australian Securities and Investments Commission). It is also listed on the London Stock Exchange, so it is considered a safe and reliable broker.
Plus500 has always specialised in the provision of CFDs, rather than asset investment opportunities, on the basis that this makes trading more accessible and affordable. Traders are not short-changed in asset choice either; Plus500 currently offers well over 2000 tradable assets across six different markets. It is highly competitive within its peer group, including the big global operations, Interactive Brokers vs IG for example.
Plus500 has opted for a web-based platform for traders, which is complemented by several apps suited to various mainstream operating systems and a whole range of different devices. All formats of the platform are available as pre-funded demo versions. No account registration is needed to use the demo platform, which has all of the same assets and features as a live trading account.
eToro vs Plus500: Usability, Look and Feel – Two very different websites and platforms
eToro has a great website with fast-loading pages and a pleasing green/white/black colour scheme that reflects its memorable corporate logo. Plus500 by comparison has a rather bland blue/white colour scheme and although web pages load fast, there is a lot of scrolling and clicking required to navigate to them.
We found eToro’s navigation is as easy as it gets, with mainstream information clearly defined under appropriate menu tabs at the top of the page and further menu options at the bottom of the page, which can all be accessed with a single click. By contrast, Plus500’s is a lot less intuitive and disorganised in places. It was particularly disappointing that there is no menu or obvious link for Customer Support.
When we looked at mobile availability, there were far less discrepancies between the two brokers. Both eToro and Plus500 have dedicated apps for iOS and Android smartphones and pads, with Plus500’s apps having slightly better user ratings than eToro’s. When we visited the app download pages, it was good to see that both brokers had responded quickly to all user comments added there.
Both operators have developed an app for Mac users and Plus500 has recently added a Windows 10 Trader app for PC users. As eToro is a cryptocurrency broker, it has provided a separate crypto wallet app for storing coins. Overall, both brokers’ mobile apps offer very similar functionality to their main platforms, but we noted that the Plus500 option makes a small screen very crowded and for clarity of detail it is possibly best used on a Pad rather than a phone.
eToro vs Plus500: Payments and Fees – Two different approaches, two different fee structures
For CFDs, both eToro and Plus500 are similar in that they both use a zero-fee trading approach, with their profits derived from spreads. eToro also offers commission-free stock and cryptocurrency trading, where its income is derived from a small percentage added to the price per lot of the asset. A better comparison for stock trading would be eToro vs IG as Plus500 does not offer this type of trading.
For both operators, there are some non-trading fees to take into consideration. The first is the Inactivity Fee of $10 per month, which is automatically applied to any account that has been dormant for three calendar months. In both cases, this can easily be avoided by simply logging in to your eToro or Plus500 account, there is no trading requirement.
The second relates to currency exchange and can represent a substantial addition to your overall trading costs. eToro only permits USD as the base currency for its accounts and if you deposit in a different currency, you will incur quite high currency exchange costs, Plus500 also implements a similar policy, but does offer eight different base currencies.
Both eToro and Plus500 require a minimum initial deposit of $100 to open a live trading account and both offer the same options for funding: bank transfer, credit /debit card, a selection of local e-wallets and PayPal. All deposits and withdrawals for Plus500 are free of charge, subject to a minimum of $50, but eToro charges $5 for every withdrawal, subject to the same minimum amount.
eToro vs Plus500: Customer Service – Live chat is the preferred option for both brokers
We like to consider customer service in all of its manifestations, as an entire support network, rather than just somewhere you go with a problem. That includes all of the things a broker includes to support its clients from the start of their trading experience and beyond.
Comparing eToro vs Plus500 there are distinct differences between these two operations. Whilst eToro naturally inclines towards support due to its ‘social’ perspective, it also features a broad spectrum of educational material, in various formats including in-house crash courses. Conversely, Plus500 appears to rely on those wishing to trade on its platform to have a certain level of prior knowledge of the CFD marketplace.
In more specific terms, eToro vs Plus500 trading hours are the same and both are easily contactable for individual help. Both operations strongly advise that urgent matters are directed via live their live chat facilities, where support staff are in place to contact instantly. In a direct comparison of Plus500 vs eToro, the former has the better service, offering 24/7 support, with eToro offering availability 24/5. Our tests also indicated that Plus500 has a better response time, even during peak trading hours.
When we examined client reviews of eToro and Plus500, we found a moderate amount of negative reviews for both operations. In that respect, it must be noted that both brokers were very quick to respond to comments left in any medium (positive or negative) and to politely re-direct clients to their respective formal support options for assistance.
eToro vs Plus500: Licensing and Security – There is little to choose between the two brokers for this section
Our comparison found that both operations take their clients’ security very seriously. eToro and Plus500 both use https:// SSL certification, implemented by DigiCert, on their websites, with all financial transactions enjoying additional 2FA encryption and authentication processes.
Although both of these brokers operate using a network of global subsidiaries for licensing purposes, eToro is privately owned, it is not listed on any stock exchange and is therefore not required to disclose financial reports. Plus500 is listed on the London Stock Exchange and its financial reports are therefore in the public domain.
eToro operates three major subsidiaries which all hold Tier-1 licensing. eToro (UK) is regulated by the UK’s Financial Conduct Authority (FCA), eToro (Europe) is covered by the Cyprus Securities Exchange Commission (CySEC) and eToro (AUS) is regulated by the Australian Securities and Investments Commission (ASIC). Plus500 has five subsidiaries in total and holds the same three Tier-1 licences: Plus500UK (FCA), Plus500CY (CySEC) and Plus500AU (ASIC). The additional subsidiaries are Plus500SEY licensed by the Seychelles Financial Services Authority and Plus500SG which is licensed under the Monetary Authority of Singapore.
Both brokers operate a segregated account policy, whereby client funds are kept separate from company accounts and apply the investor protection appropriate to their Tier-1 licensing. In addition to the statutory amounts applied by the FCA and CySEC, eToro also has a Lloyd’s insurance policy for £/€/$1,000,000 for the protection of all clients in the event it becomes insolvent.
The investigations we carried out during this broker comparison showed clearly that both eToro and Plus500 perform consistently well under all of the regulatory guidelines applied by their various licensing authorities.
eToro vs Plus500: Spreads – Both operators are competitive for highly-traded assets
Both eToro and Plus500 operate using a zero-fee structure, so their spreads are variable and assigned per asset. This means that spreads change regularly, as determined by the respective markets and you will need to check each asset separately.
eToro makes the task really easy using its dashboard-style platform. As well as viewing a snapshot of each asset, which includes live bid/ask prices; you can see the current spread in pips. Plus500 does have a web page featuring the current spreads for the most-traded assets, but one thing we did not like is that Plus500 lists its spreads as a percentage rather than in pips. This means you have to either perform a manual calculation or click on the asset to see the pip value.
We made a direct comparison of eToro vs Plus500 using highly-traded assets common to both operators, we found that the average spreads offered by Plus500 were marginally narrower, corresponding to an average difference of 0.02 pips. However, for other less mainstream trading assets, there was a bigger variation between the two operators of about 1–5 pips either way. The only notable exception was one minor Forex pair, which was quoted 50 pips different between the two brokers.
One other point worth noting is that eToro offers trading in stocks and cryptos, as well as CFDs for the same assets. If you see an asset with no spread shown against it, then you are buying the asset itself, where there is a spread value indicated, then it is a CFD pertinent to the underlying asset. eToro’s crypto availability is slightly limited compared to some, eToro vs Robinhood for example, but it is building this side up gradually.
Generally speaking, both eToro and Plus500 were competitive for the assets which routinely have a high market trading volume, but rather variable for many others. Neither broker offers any type of retail trading account featuring better spreads based on trading activity.
eToro vs Plus500: Conclusion – Different business models, both with positive features
The brokers in our comparisons are selected for their outward similarities and we have a set list of criteria to compare them by in this type of review. There are usually some surprises for us along the way and our eToro vs Plus500 comparison is no exception to that.
These two operations were launched within 12 months of each other but have moved in somewhat different directions in the two decades that have passed since their respective launches.
eToro has certainly fulfilled its mission to make all types of trading accessible to the retail trading community and has done so in a very unique way. Plus500 on the other hand has stuck firmly to the tried and trusted, providing a specific financial derivative and making it available to clients via a more traditional trading platform.
Both have enjoyed a good deal of success in their different ways, with eToro attracting younger traders in their droves, thanks to the ‘social’ aspects of its platform and Plus500 steadily accruing more clients to add to its loyal supporters. Along the way, eToro and Plus500 have formed subsidiary companies and expanded globally, both collecting an impressive array of high-tier licensing whilst doing so.
From a more subjective viewpoint, if you want to trade solely in CFDs, then Plus500 has a vast array of assets to select from. However, if you like a bit of diversification, then eToro may have more appeal, as it also offers opportunities to purchase assets like real stocks and cryptocurrencies. From the crypto aspect, eToro vs Coinbase is a better comparison.
For someone who already has some CFD trading experience and knows their way around a more traditional type of trading platform, then Plus500 is ideal. For those of you who are just starting out, then eToro’s dashboard-style platform and copy trading elements make a perfect entry point and give you more opportunities to gain trading skills as you go along.
eToro vs Plus 500: FAQs
🏅 Is best broker eToro or Plus500?
Both of these brokers have plenty to offer the retail trading community. However, they both have different business structures and their own approaches to trading. If you are looking for a broker, then please browse our in-depth broker reviews, or take a look through our eToro vs Plus500 comparison. These guides, as well as many more, are available at Betting.co.uk.
📈 No spreads listed for eToro assets?
Alongside CFDs, eToro gives you the opportunity to purchase the assets themselves. Please take a look at our in-depth review of eToro for further insights into how this broker operates. You can also browse our enlightening eToro vs Plus500 Comparison guide at Betting.co.uk.
📉 No spreads listed for Plus500 assets?
Plus500 frequently updates lists featuring the most-traded assets within each market and publishes the related spread as a percentage, rather than by pip value. If you need to know how to calculate percentages to pips, or want to learn more about CFDs in general, then please head for our extensive trading guides at Betting.co.uk.
⭐ What is copy trading?
Some brokers offer clients the opportunity to observe expert traders, follow their trading decisions and to replicate their trades, which is a form of ‘social trading’. There is only a few licensed brokers that offer this, see who they are by checking out our in-depth reviews right now at Betting.co.uk.