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MagnumFX Review 2023 – Broker Obscures Ownership Details

MagnumFX Review

MagnumFX, alongside ETFinance, is an online broker under the parent company Magnum FX Ltd. They have a current CySEC license, as every Cypriot broker must have to offer financial services.

Despite maintaining their registration, our MagnumFX review uncovered that the broker had a series of issues with the financial regulator.

MagnumFX Platform – A View From 2023

Let’s see what we know about MagnumFX broker in 2023. Should you still trust this CySEC-licensed firm, and why?

To begin with, the company has had several regulatory issues, including its partial ban from providing services in June 2020. Then, they allegedly complied with regulatory demands, after which they were allowed to continue their business.

However, in March 2022, the company had to pay a fine, this time 150,000 EUR, for violating the Investment Services and Activities and Regulated Markets Law of 2017. Upon settlement agreement, the brokerage voluntarily renounced its CySEC license and is currently under examination.

With the previous FCA ban and the paid fine, it’s clear that MagnumFX is not the broker it once was. The company has had some severe criminal allegations as well as a whole lot of negative reviews.

Note that affiliated sites, including:

  • etfinance.eu
  • financedome.com
  • etfinance.com

Are all under the same examination and are not allowed to offer financial services in Europe as such. None of the sites are currently available, meaning that customers cannot log in and request a withdrawal.

If you have any remaining funds and the brokerage refuses to cooperate and lets you get a refund, it’s time to act. No, it’s not alright to lose your money for their bad business practices, and yes, you can still file a report to CySEC and other relevant authorities. And we’re here to help you fight for your rights.

To conclude, you should not open an account with MagnumFX in 2023, and you should definitely request a refund.

MagnumFX Review of Trading Conditions

MagnumFX has a decent selection for their clients. They offer both forex currency pairs and CFDs. This broker has over 50 forex options in total.

They place a strong focus on stock and index CFDs, with over 150 options. Anyone looking for cryptocurrency CFDs should look elsewhere, as this broker has bare-bones offerings.

Forex traders will be disappointed with their spreads, with the benchmark EUR/USD trading at around 2 pips for most account types.

Traders can try out a free demo account to take a closer look at the broker’s spreads themselves.

MagnumFX Trading Platform

Traders with MagnumFX use the popular MetaTrader 4 platform. It’s the top choice for many online forex and CFD brokers. Traders who switch between different brokers are likely familiar and comfortable with this platform.

The platform is available in a variety of languages. It’s available as a desktop app and also on both iOS and Android app stores.

Traders celebrate the platform for their advanced analytical and technical indicators. These indicators make understanding positions and developing trading strategies much more efficient.

The platform also features the ability to share custom indicators with other traders, creating a truly adaptive experience. Professional trading indicators are also available to all traders.

Trading options like one-click buy and sell available for advanced traders who know what they’re doing. There are a variety of charting options that allow each investor to personalize their experience.

Most of these options are available through mobile apps as well, along with the charting tools and technical indicators. The mobile apps feature a simplified layout that ports well to smaller screens.

Seemingly Uncompetitive Spreads

MagnumFX Spreads

Our MagnumFX review found the broker to generate revenue from spreads alone, charging no commissions. The spreads on most assets weren’t very impressive. The EUR/USD currency pair is a good indicator of a broker’s overall offerings, and most traders use it as such.

The spread at this broker was about two pips, which really isn’t anything to sing home about. Traders scoping out brokers for the best offerings are looking for much closer to 1 pip.

While that particular spread is too high, it doesn’t rule out other spreads being competitive, and it doesn’t work well for the broker overall.

The ESMA has strict regulations on leverage, keeping retail traders to a maximum of 1:30. As a CySEC register broker, MagnumFX is under their jurisdiction and must abide by that limit.

However, by registering for a professional account, traders can access leverage of up to 1:500. Registering for a professional account requires traders to meet specific criteria, demonstrating that they are a professional trader.

Some of the former client reviews online have alleged that the broker has been lax in their professional trader requirements, possibly allowing some novice traders to access professional leverage.

Online Client Reviews About MagnumFX

There are very few online reviews on this broker, a fact disquieting in itself. It seems that this broker is much less prevalent than its sister broker, ETFinance.

For this MagnumFX review, we can probably safely assume that the same kind of practices goes on at one broker as at the other.

If this is the case, the online reviews for ETFinance paint a dire picture of the broker. The bulk of the reviews are from former clients who are highly unsatisfied.

The client reviews have a few common complaints among them. One of the most prominent issues that come up is the broker’s use of fake celebrity endorsements.

Former clients are angry that they were brought in under false pretenses. Many people trust celebrity endorsements and aren’t happy to have lost money after listening to fake endorsements.

The other big complaint is about their account managers. The broker has account managers for their traders whose main job is to clue them into great trading opportunities. Client reviews say that these account managers are far too aggressive.

The former clients claim that the managers would call them repeatedly, even after customers asked them to stop. They say that their aggressive push to open more positions led to them losing even more money in the long run.

Precedent-Setting Ban From the FCA

MagnumFX is best known for being part of the first wave of bans by the FCA against CySEC forex and CFD brokers. On June 1st, 2020, the FCA banned four Cypriot firms from offering services to UK residents.

These firms included Hoch Capital Ltd, Rodeler Ltd, F1Markets Ltd, and Magnum FX Ltd. Neither MagnumFX nor ETFinance can now offer any of their financial services within the UK.

These bans came after the brokers used fake celebrity endorsements in their advertisements. The brokers all offer CFDs, which the FCA regulates very strictly.

The financial regulator said they believe UK traders lost hundreds of thousands of pounds in investing with these brokers. The ban completely shuts down the ability for these firms to offer CFDs within the UK.

The FCA forced the brokers to close all positions held with UK clients and to return their funds.

The FCA also stated that the ban was due to a lack of risk disclosure. All brokers that offer CFDs must display prominent disclosures that state what percentage of traders lose money while trading CFDs.

This is meant to make it clear to new traders that CFDs are not a get rich quick scheme and that trading them brings serious risk.

Further complaints included issues that some clients had making withdrawals and incidental fees from the broker.

The passporting rights of CySEC-registered brokers allow them to offer financial services to residents of the UK. This ban was the very first time that a financial regulator had rescinded passporting rights.

In the months to follow, the FCA would take similar actions against more brokers found to be operating in the same manner as MagnumFX.

Further Actions Taken by CySEC

MagnumFX

MagnumFX and the other banned brokers weren’t out of the water yet. Later that same day, CySEC announced that they were implementing a partial suspension of the brokers that the FCA had banned. CySEC implemented a temporary partial ban that would last for one month, pending corrective measures.

Their statement cited several violations from the brokers. CySEC claimed that the brokers did not appear to act honestly, fairly, and professionally when providing investment services to clients.

Their statement further read that the brokers did not appear to assess the compatibility of financial instruments with their clients’ needs, likely referring to CFDs offered to novice traders.

Marketing practices made up a big part of CySEC’s decision to suspend the brokers. The regulator stated that the brokers did not provide proper information to clients and that their marketing communications were misleading.

They said that the broker did not provide appropriate information in a timely manner or an understandable form.

CySEC’s suspension reiterated that the brokers are no longer allowed to provide investment services to their clients within the United Kingdom or seek new clients there.

The suspensions added a prohibition against the brokers accepting any new clients during the suspension from any country. CySEC also prohibited brokers from performing any advertising as a provider of investment services.

Eventually, CySEC decided that MagnumFX and the brokers had made the proper corrective actions to restore their operations. On June 18th, 2020, the regulator issued a statement saying that the suspension was over.

The report noted that all brokers involved had successfully abided by the terms of the suspension, stopping the intake of new clients, stopping advertisements, and ceasing all business with UK residents.

Customer Support

It isn’t hard to reach MagnumFX, especially for clients who face constant calls from their account managers. Their phone lines are available for any of their clients. They also have a live chat on their website, but it’s only staffed during business hours.

Clients can also reach Magnum through email and through their website’s contact form to request a callback.

Making Deposits and Withdrawals

MagnumFX has typical deposit and withdrawal options for their client. Traders can fund their accounts through credit and debit cards, bank wire transfers, along with most of the leading online payment processors.

Withdrawals are a bit trickier than deposits, with many of their online customer reviews citing difficulty making a withdrawal.

One caveat is that the withdrawal account has to match the full name on the trading account. Traders who didn’t know this at the time of signup and entered their name incorrectly could face significant problems.

The broker also reserves the right in their terms and conditions to charge a $50 withdrawal fee to accounts that have “insignificant or no trading activity.”

Educational Resources

MagnumFX has a few resources available for trader education. They host several videos about forex and CFD trading basics and how to use the MetaTrader 4 platform effectively.

Like many other brokers, they have an economic calendar that highlights important developments in the finance world.

Traders can use these upcoming events to speculate on how their positions are going to fare.

Help Your Deposit Get Started on the Way Back Home

In conclusion, the FCA does not ban CySEC registered brokers lightly. Traders should take it as a major warning sign.

These warnings come too late for some traders, who have already lost their deposit with their broker. If you cannot retrieve your deposit, you can contact us today to evaluate your chargeback options.