If you’ve recently received a letter from your broker asking for your National Insurance number, best thing to do really is just provide it as soon as possible and put it down to the FCA’s regulatory requirements.
Which, whilst annoying are in the best interests of clients and brokers. The rules are there to ensure clients are treated fairly and London maintains it status as financial centre of the universe. Security and due diligence being the corner stone of modern financial services business.
But why are brokers asking for national insurance numbers now?
It’s not like they don’t already have them? At 2017’s Finance Magnates London Summit, Natalia Hunik, Global Head of Sales gave an excellent talk on marketing in the Forex industry, and one thing that was covered was how much Plus 500 spent on marketing. Compared to other brokers it was a hefty 30% of revenue (see featured image). Clearly onboarding a huge amount of clients.
To reduce the onboarding costs and time, they only asked for the minimum amount of information required by the FCA. Sure enough, in order to complete, all the other forex brokers like ETX Capital followed suit.
It’s not a strategy that overly pays off in the long run, because the easier it is to open an account the overall quality of client goes down. i.e. lots of small clients meaning not enough time to look after the big ones.
Anyway, as part of the process clients could scan a copy of their passport, drivers licence, payslip etc. Which satisfied the regulators at the time. It also meant that in some cases your CFD broker does actually have your national insurance number and passport number, but as a digital scan, rather than inputted in numbers.
So, if you’re asked for additional information from your spread betting brokers, just get on an give it. It’s the rules and if you delay too long will mean that you will eventually be blocked from trading unless your account is fully compliant. It literally takes less than one minute.
Make sure you are trading with a decent regulated broker
Here’s how to make sure your broker is what we would class as good…
- Are they regulated by the FCA (check here)
- Are they in our comparison tables?
- Don’t trade with a broker that is based offshore or you won’t get FSCS client money protection
- Never be pressured into trading or take advice on high-risk trades from anyone that is not regulated to do so.
- Always a do your own research before depositing money with a broker
- Never trade speculative products with money you can’t afford to lose.
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.