Trading platforms like eToro and Trading 212 need your national insurance number when you open an account to help identify you and reduce the risk of money laundering.
If you’ve recently received a communication from your broker asking for your National Insurance number and still want to trade with them, best thing to do 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 the financial centre of the universe. Security and due diligence are the corner stone of modern financial services business.
However, a lot of UK financial professionals are getting a bit fed up with this and are setting up online trading platform offices in Dubai. Fair enough, the weather is nicer…
But why are brokers asking for national insurance numbers now?
It’s not like they don’t already have your ID? 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 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 who is not regulated to do so.
- Always do your own research before depositing money with a broker
- Never trade speculative products with money you can’t afford to lose.
Richard is the founder of the Good Money Guide (formerly Good Broker Guide), one of the original investment comparison sites established in 2015. With a career spanning two decades as a broker, he brings extensive expertise and knowledge to the financial landscape.
Having worked as a broker at Investors Intelligence and a multi-asset derivatives broker at MF Global (Man Financial), Richard has acquired substantial experience in the industry. His career began as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson), following internships on the NYMEX oil trading floor in New York and London IPE in 2001 and 2000.
Richard’s contributions and expertise have been recognized by respected publications such as The Sunday Times, BusinessInsider, Yahoo Finance, BusinessNews.org.uk, Master Investor, Wealth Briefing, iNews, and The FT, among many others.
Under Richard’s leadership, the Good Money Guide has evolved into a valuable destination for comprehensive information and expert guidance, specialising in trading, investment, and currency exchange. His commitment to delivering high-quality insights has solidified the Good Money Guide’s standing as a well-respected resource for both customers and industry colleagues.
You can contact Richard at richard@goodmoneyguide.com
