Afrifocus Securities – Can You Trust Them?

Website URL: https://afrifocus.co.za

Founded: 2018

Regulations: None

Languages: English

Deposit Methods: Credit Cards, Wire Transfers

Minimum Deposit: ZAR 500 (~$30)

Free Demo Account: Yes

Number of Assets: Not Specified

Types of Assets: Forex, Indices, Commodities

Trading Accounts and Conditions

Afrifocus Securities has not provided any information about the types of trading accounts they have. When we registered for an account, we found out that this broker offers a single account type for all traders.

Trading conditions have not been clearly specified. There is no mention of leverage ratios, and spreads were only found on their trading platform, which were high at 3 or more pips. Other trading conditions such as fees and commissions are also not clear mentioned.

Afrifocus Securities – Advantages

Here is the main advantage that we could find while reviewing Afrifocus Securities:

• Regulated Broker

Afrifocus Securities is a regulated broker, owned and operated by Afrifocus Securities (PTY) Ltd. Which is a positive. This broker is regulated by the FSCA (Financial Sector Conduct Authority), South Africa’s financial regulator. The broker provides all of the necessary details about their regulation status – license number, company details, address and contact information.

However, while this broker is regulated, we need to point out that the FSCA is not among the strongest financial authorities in the world. Their regulations are not as thorough as some of their European counterparts; customer protection is minimal and if you are trading from outside South Africa, then these regulations will not apply to you.

In fact, it would be best to find a broker that is regulated by one of the more reputed regulators, such as the UK’s FCA (Financial Conduct Authority) or even the CySEC (Cyprus Securities and Exchange Commission). These financial authorities offer their clients an umbrella of protection that you will not get from FSCA regulated brokers. Strongly regulated brokers are required to segregate their accounts from the customers’ accounts. There are also leverage restrictions (which is not imposed by the FSCA), negative balance protection, and higher operational capital requirements. And you get deposit insurance funds, which means that if your broker goes bankrupt or is found to be a scammer, then you will be compensated for your losses (up to 20,000 Euros for the CySEC and as much as 80,000 GBP for the FCA).

Afrifocus Securities – Disadvantages

Despite being a regulated broker, here are some serious disadvantages that Afrifocus Securities have that make them a poor choice:

• Trading Software

Afrifocus Securities offers their clients the use of the MetaTrader platform. This should actually be a positive, however, the MT4 platform offered by this broker is actually licensed to Velocity Trader, another broker (fully licensed and regulated). There is also a web-trader that Velocity Trader offers, which can be used by Afrifocus clients, however, it is not as competitive as the MT4 platform.

Since this platform is not registered to Afrifocus Securities, we cannot be sure about its authenticity, which is why we have marked it a disadvantage.

Plus500

$100

Minimum Deposit

Start Trading

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82% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money

Plus500 is a FTSE 250 listed brokerage providing online trading services in CFDs, across 2,000+ securities and multiple asset classes.

 

AvaTrade

$100

Minimum Deposit

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The company was created as a combined effort of financial professionals and experts in web-commerce with the goal of perfecting the online experience for retail traders.

• Issues with Trading Conditions

We also have issues with the Afrifocus Securities’ trading conditions – the broker hasn’t published any.

When we checked the MT4 platform, the conditions were quite favorable – low spreads, leverages within legal limits, and traders get to choose from a large variety of asset classes. Unfortunately, these are trading conditions set by Velocity Trader, not Afrifocus Securities.

Furthermore, the web trader platform shows massive spreads, that range mostly above 3 pips. Leverages are not mentioned at all!

The broker has not even mentioned any trading conditions in their terms and conditions. Therefore, a broker not having their own trading conditions is another red flag for us.

• Deposits and Withdrawals

The minimum deposit is very competitive, just about ZAR500, which is about $30 under current exchange rates. The problem is that if you deposit money, you are actually depositing into Velocity Trade’s account, and not Afrifocus Securities’ account.

• Connection with Velocity Trade

Everything that we have seen leads us to believe that Afrifocus Securities is not an independent broker, but actually an affiliate of Velocity Trade. This in itself would not have been a problem, however, what we do have an issue with is that neither broker has explicitly mentioned what their connection to the other is.

We have this broker using Velocity Trade’s trading software and trading conditions however, the broker does not specify what their relationship to the other broker is. This is an issue, since reputed brokers are usually very transparent about their relationships with their affiliates.

• Transaction Fees

Afrifocus Securities accepts deposits via bank transfer and credit cards, which are quite standard in the industry. The challenge here is that this broker charges some rather steep transaction fees for deposits. We would like to point out that most brokerages across the world no longer charge any fees for deposits, so a 2% transaction fee for credit cards is rather high on this broker’s part. And if you deposit using a bank transfer, then you will have to pay ZAR 450 (~$27) per transaction.

Added to that, there are also withdrawal fees. So, if you do a bank transfer, you’ll be paying another ZAR250, which is about $15, with is very expensive.

Thus, even if this broker is regulated and not a scammer, these costs are just not competitive and therefore this is not a broker that we would recommend to traders. 

Conclusion

Afrifocus Securities is not a scammer, but neither is this broker totally trustworthy. While they are regulated, the broker is not regulated by one of the stronger authorities; the FSCA is not known for its stringent regulations, which means that traders are still at risk. Added to that, this broker’s trading conditions are not advantageous and their trading software is not among the best.

With so many issues with Afrifocus Securities, we would recommend that you find another broker to deal with.

Afrifocus Securities

2.7

User Experience

3.0/10

Payment Options

3.0/10

Security

2.5/10

Support

2.3/10

Reputation

2.6/10

Pros

• Regulated Broker

Cons

• Trading Software
• Issues with Trading Conditions
• Deposits and Withdrawals
• Connection with Velocity Trade
• Transaction Fees