Anyone looking for an online broker for trading stocks, forex, crypto, or other investment products can easily find one. But if you ask us, not all brokers are created equal. If you have wondered whether the broker HeroFX is legit or a scam, this article will give you our honest HeroFX review.
We do not recommend Hero FX since it is not regulated by any financial authority, and it offers banned products in some countries, which can get its users in trouble. HeroFX has also been the subject of numerous customer complaints around issues such as poor customer support and withdrawal problems.
That is our HeroFX review in a nutshell. If you wish to find out more about HeroFX and discover reputable HeroFX alternatives, keep reading.
What is HeroFX, and how does it work?
HeroFX presents itself as an online broker providing trading in forex, crypto and CFDs.
In the forex market, HeroFX states on its website that it offers trading in more than 70 currency pairs. In the crypto market, it says that it provides trading in dozens of coins and tokens. In the CFD market, HeroFX offers exposure to global stocks, indices and commodities.
Users can access the HeroFX trading platform through desktop and mobile apps or on the web.
HeroFX offers two account types: RAW Spread and No-Commission. The RAW Spread account is marketed as offering favourable spreads and flat-rate trading commissions. On the other hand, the No-Commission is marketed as offering favourable spreads and zero-commission trading.
Each of these accounts requires a minimum deposit of $20.
HeroFX users can access leverage of up to 500x their deposit. While it offers generous leverage for clients who wish to trade on margin, HeroFX lacks negative balance protection features. That means that traders can lose more than their account balances and get into more financial problems.
The broker primarily accepts crypto deposits, supporting Bitcoin, Ethereum, and the stablecoin Tether-USDT. Additionally, other funding methods, such as CashApp, Apple Pay, Google Pay, debit cards, and wire transfers, are also listed as available.
HeroFX Review: Is it legit or a scam?
If you only listen to what HeroFX wants you to know, this is supposed to be the ideal broker for forex, crypto and CFD traders.
HeroFX is marketed as the perfect trading platform for those looking for low-cost trading, fast order execution and access to a broad range of markets. The broker also touts flexible funding methods, generous leverage and availability of trading signals and social trading features.
But that is not what you see when you look under the hood. Instead, you see red flags that should raise your eyebrows.
HeroFX’s questionable company address
Brokers in legitimate businesses strive to win and retain the trust of their customers. They do this by being transparent with their customers about their background, location, operations and teams. On location choice, reliable brokers seek to base their headquarters in countries with robust regulatory oversight to help bolster their credibility among investors.
HeroFX’s website states that it is headquartered in Saint Lucia.
Saint Lucia may be known for its beautiful mountains that have made it a popular tourist destination, but the island is also famous for being an offshore tax haven and a place where you can operate a forex brokerage without a license.
While the St. Lucia Financial Services Regulatory Authority doesn’t license forex brokers on the island, HeroFX suggests that the authority oversees its activities on its website. That is misleading and a red flag against the broker’s claim of legitimacy.
HeroFX is an unregulated broker
HeroFX is available in almost every country.
Although the broker states that it does not accept clients from the U.S. and Sweden, people in these countries can still open an account with HeroFX and trade the financial products offered on the platform. In fact, much of the broker’s web traffic comes from the U.S.
For HeroFX to operate legally in the U.S., it must be licensed by the SEC and the CFTC. But that is not the case. For a broker to operate legally in the UK, it must be authorised by the FCA. Yet, it lacks approval from the authority.
Other major financial regulators, such as the BaFin in Germany, the FINMA in Switzerland, the ASIC in Australia, and CySEC in Cyprus, also do not recognize HeroFX.
HeroFX is prone to conflict of interest
The lack of regulatory oversight means HeroFX lacks accountability and transparency, which can harm its users.
If left alone, brokers can engage in illicit activities to maximise their profit at the expense of their clients. For example, without regulatory supervision, brokers can run deceptive marketing campaigns, charge exorbitant hidden fees, deny withdrawals or disappear with clients’ money.
A financial authority like FINRA looks out to protect investors from abuse by brokers. It sets out rules to ensure that brokers comply with ethical practices. For example, it aims to identify misconduct, prevent fraud, and obtain restitution for investors. FINRA can fine, suspend or ban brokers that violate its rules. But FINRA only supervises licensed brokers.
Since HeroFX is not licensed to operate in the U.S., it is not under FINRA’s watch. That means that HeroFX can easily abuse its clients and get off scot-free.
HeroFX lacks protection for client funds
Apart from intentional misconduct that FINRA seeks to prevent and punish, brokers can also fail like any other business. When a broker goes bankrupt, its clients should be able to recover at least some of their money.
The Securities Investor Protection Corporation (SIPC) provides protection for investors’ funds in brokerage accounts. The SIPC ensures that if your broker fails, you can recover up to $500,000 of your funds in cash and investments.
However, the SIPC insurance is only available to clients of member brokers. A broker must be regulated by the SEC to be a member of the SIPC. Because HeroFX is not regulated, there is no protection for its clients’ funds.
Traders entrust brokers with more than their money. They also hand over sensitive personal data to brokers when they sign up for an account to make deposits. Without regulatory oversight, brokers can abuse the data and expose clients to fraud.
HeroFX faces many customer complaints
HeroFX customers have limited channels to get help when they need it. Since the broker doesn’t have a live chat for customer support, those looking for assistance have to contact it through phone or email.
As part of our research for this HeroFX review, we discovered overwhelming customer complaints against the broker. An analysis of HeroFX customer feedback reveals that users have consistently complained about difficulties with withdrawals, trouble completing trades and poor customer support.
The numerous customer complaints point to an untrustworthy broker.
Using HeroFX can put you in trouble
HeroFX not only operates illegally in the U.S., which means it lacks accountability and protection for clients’ funds and data, but it also offers banned financial products in the country.
HeroFX offers CFD trading, yet CFDs are prohibited in the U.S. under CFTC regulations.
If you are caught using offshore brokers such as HeroFX to trade CFDs, you could face punitive regulatory actions. The CFTC could fine you up to $200,000 if it finds out that you traded CFDs through an unregulated foreign broker. The regulator could also lock you out of the U.S. financial markets if you violate its ban on CFD trading.
HeroFX Alternative Brokers
With all the red flags regarding the reliability and security of HeroFX, you should seek out alternative brokers that comply with regulatory standards, provide a secure trading platform, and have a good reputation with customers. Below is a list of HeroFX alternative brokers we recommend for you.