Alfa Financials – Review

AlfaFinancials.co.za briefly

Alfa Financials (Pty) Ltd is a South African financial company, providing traders access to the global markets. Alfa Financials is regulated by the South African Financial Services Board (FSB). Customers can trade currency pairs, indices, and commodities through the company’s own trading terminal called Alfa Trader. You can open a live account with as low as USD1,000 and leverage up to 1:100.

Regulation

It is particularly important to know whether and where the company is regulated Alfa Financials (Pty) Ltd is regulated by the South African Financial Services Board (FSB) under license number 45695. It is licensed to provide investment and brokerage services. Client funds are held in the company’s segregated client bank accounts and cannot be used to pay back creditors in the event of default.

Account Types

A 30-days demo account is available, and it is better to open this type of account before you start trading for real money. This is risk free trading with virtual money. However, not all instruments are included in it (forex and spot metals only).

There is only one type of real account, so trading conditions are equal for all categories of traders. Spreads are floating, and the average one is 1 pip for the EUR/USD pair (spreads are fixed in the demo account and the one for the EUR/USD pair is 3 pips). The minimum deposit is USD1,000 and the leverage can be up to 1:100. A commission of USD15 will be charged for each transaction per standard lot. Transactions of customers with larger account balances are subject to a lower commission. It ranges from USD12.5 for a balance of USD10,000 to USD5 for balances over USD500,000.

Market Maker or STP brokerage?

The Order Execution Policy document shows that the company is always the counterparty (or principal) to every trade. Alfa Financials acts as principal, and not as agent on the client’s behalf, for all transactions in the instruments provided by the company and therefore is the sole venue for execution of the clients’ orders. This means that the Alfa Financials is a market maker, which involves a conflict of interest because when the company executes orders, it keeps the risk to itself. Every loss for customers is a profit for the company.

The same document reveals that at the time that an order is presented for execution, the specific price requested by the client may not be available; therefore, the order will be executed close to or a number of pips away from the client’s requested price. All orders are subject to slippage and the company warns that it is a normal market practice and a regular feature of the foreign exchange and stock markets under conditions such as illiquidity and volatility due to news announcements, economic events and market openings.

Stop loss orders are not guaranteed – once the market reaches the stop loss price, the order is triggered and treated as a market order, which is subject to slippage.

We could not find any information about the presence of a Negative Balance Protection policy. However, the Risk Disclosure document shows that you may lose all your investment capital. There is no mention of any additional losses that could exceed your initial deposit. We recommend clarifying this with the company before you start dealing with it.

Fees

In addition to the common fees such as spread, swap, rollover and commission, there is an inactivity fee as well. If the Trading Account is inactive for one month (30 consecutive days) or more, the company reserves the right to charge a monthly account maintenance fee of USD100.

Deposits and Withdrawals

Alfa Financials does not offer a variety of deposit and withdrawal methods. It only uses a bank transfer as a payment method. The company only accepts funds originating from a bank account or an account in the client’s name held at a licensed financial institution.

Withdrawal requests will be processed up to two business days.

Alfa Financials does not charge any internal fees for deposits or withdrawals. However, payments to and from banking institutions may attract intermediary transfer fees. Any such fees will be covered by the client.

The minimum initial deposit amount is USD1,000.

Trading Platforms

The company has developed its own trading terminal, which is called Alfa Trader. It is available as a desktop version and as a mobile application for Android and iOS devices. The company claims the platform is updated simultaneously on all versions, which means you can open a position from your desktop PC and close it from your smartphone. The terminal allows you to see the full depth of the market (Level II quotes) and offers everything traders need to analyze markets and place orders for currency pairs, precious metals, commodities, indices, and shares.

Assets

Alfa Financials offers the following groups of trading assets:

Forex – More than 40 popular major and minor currency pairs can be traded. The spread for the EUR/USD pair is 3 pips and trades are subject to a fixed commission of USD15 per standard lot traded.

Commodities – 2 precious metals – Gold and Silver are available for trading. Trading involves commissions of USD15 for traded lot.

Options – You can trade 1-, 5-, 10-, 30- and 60-minute options of GBP/USD, EUR/USD. USD/CHF and USD/JPY pairs.

Indices and Shares – They are not available in the demo account and there is no information about them on the webpage.

Summary

Alfa Financials has a South African FSB regulation, which allows it to provide financial services across Africa and globally (except some restricted countries). The company acts as a market maker, and the main conflict of interest exists. It provides not so wide range of trading instruments via its own trading terminal called Alfa Trader. There is only one type of real account, and you can start with at least USD1,000. Spreads are not attractive, and you will be charged a commission of USD15 for all trading instruments.