IIAwards - Review of Saxo

As part of the recently announced IIAwards, in which we celebrate innovations in the fintech and crypto industry, today we will analyze Saxo taking into account different categories.

Founded in 1992, Saxo Bank is a Danish investment bank that provides online trading and investments. The company is regulated by several financial authorities globally, including the Danish Financial Services Agency (FSA) and the UK Financial Conduct Authority (FCA). It classifies itself as "a leading fintech specialist focused on multi-asset trading and investment and delivering 'Banking-as-a-Service' to wholesale clients."

The company embraced the technological advancements of the late 90's in launching one of the first online trading platforms in 1998.

The fee structure is transparent and can be easily used to forecast the costs, however, the fee structure differs among various account types. Saxo Capital Markets' trading costs are either included in the spread, which is primarily how the broker generates revenue, or added as commissions, which are on par with industry standards.

Its forex bid/ask spread minimums for a "classic" account are advertised at 0.6 pips. Average spreads drop while benefits rise for the higher-tiered "platinum" and "VIP" accounts, offering the potential for substantial active-trader discounts. That said, the 200,000 GBP minimum to upgrade the tier will act as a deterrent to an average retail client.

Commission charges added to the listed spread come into play when trading other instruments. Overnight holding costs are average to competitive and there is an inactivity fee of £25/quarter if the client "only holds cash funds" in their account. There are a host of other costs, broadly characterized as "general charges," which, when combined, tend to be quite onerous to the average retail trader.

However, account holders will appreciate free withdrawals. Additionally, unlike most brokers, Saxo bank charges a holding fee on long-dated listed options with maturity beyond 120 days.

Saxo offers one of the widest portfolios in the industry. It covers all asset classes and provides access to a vast number of markets globally, including the most notable exchanges.

It has a great product selection in complex assets, like forex, options, futures or CFDs. Its range of products in more traditional asset classes such as stocks, ETFs or bonds is also highly competitive. Saxo gives access to a wide range of stock markets. You can trade both on major markets, such as US stock exchanges or Deutsche Börse, and on smaller markets like the Prague Stock Exchange or the Warsaw Stock Exchange.

While mutual funds are a relatively new addition to Saxo's product portfolio, they are available only in a few countries, like Germany, Poland or Denmark. In comparison with other competitors, this offering looks poorer. However, Saxo has a comprehensive and well-rounded offering of bonds, options, futures and CFDs. Many instruments can be traded through multiple venues and order routing techniques, providing impressive diversity. That said, some venues will generate higher-than-average costs. Nonetheless, the product suite is quite impressive and is sure to please a global markets aficionado.

Saxo Bank's web trading platform is one of the best among online brokers. It's easy to use, but also provides features favored by professionals, such as an advanced order panel. Saxo's user interface is proprietary. The broker built its trading platforms, SaxoTraderPRO (download) and SaxoTraderGO (web-based), with the end user (trader) in mind, providing major upgrades over the industry standard MT4, which can only be accessed through an API interface, and the newer cTrader.

Furthermore, seamless integration with third-party tools opens up a myriad of possibilities for an advanced trader. SaxoTraderGO offers limited customization.

This web-based version allows organization of charts, news, research and watchlists according to trader specifications. Charting and technical indicators are full-featured, with custom time management and linking among platform windows.

On the other hand, SaxoTraderPRO is a fully customizable desktop interface that can be downloaded on Windows and Mac operating systems. The user has the option of utilizing up to six screens to take advantage of the advanced workspace management that this platform has to offer.

Order tickets are engineered to optimize productivity while displaying all pertinent information. Additionally, algorithmic trading orders can be fully integrated upon activation. Subscription-based tools, such as "depth of market" and "time and sales" data, are available and can prove to be value-added features.

Additionally, Saxo offers clients the option to build bespoke applications via APIs, both its own OpenAPI and third-party API (Excel, etc.), that can access Saxo's data feeds. On top of all this, clients can also access third-party applications, such as TradingView, Dynamic Trend and MultiCharts, to assist them in their trading.

For example, MultiCharts allows traders to back-test strategies while TradingView advertises itself as a social trading platform. Saxo does not offer local VPS hosting.

Saxo's account opening is fully digital, user-friendly and available in most of the world, except for the US, Iran, Cuba, Sudan, Syria or North Korea. The required Saxo Bank minimum deposit is 500 GBP in the UK for a Classic account.

Albeit, the minimum deposit can vary depending on your residency and the account type you choose. For example, the required minimum is 10,000 USD for Middle-Eastern or Central European clients, and 2,000 USD for Australian or Swiss residents. Saxo Bank offers three account types: classic, platinum and VIP. Saxo's account opening is fast and fully digital. Online registration takes approximately 10-15 minutes, while the account verification normally takes two days.

Saxo's account opening process consists of three steps: online application, approval process and funding. To verify one's identity and residency, the client has to upload the following documents: proof of identity: national ID card/passport, proof of residency: tax/bank statement.

After approval, you have to fund your account to be able to start trading. Depending on the chosen funding method, the process can take up to five days and the platform does not notify the client upon the arrival of funds, thus the client has to follow this himself.

Customer support, arguably, is Saxo's most pronounced flaw. The website has no live chat functionality. Online chat is embedded within the trading platforms but only available to funded accounts and local language support is limited to higher-account tiers.

However, prospective clients do have access to a demo account that allows them to test the platform prior to registering.

The broker does provide a robust support page with numerous topics, but the search function could be more efficient. Saxo advertises industry-standard 24/5 customer support, yet the contact page includes office reception and sales numbers, but no local or toll-free support number, while the small print indicates that departments are open between 9:00 a.m. and 5:30 p.m. local time.

There is also no direct number to the dealing desk.

While Saxo does not offer any educational articles, there are plenty of alternatives to guide prospective and experienced investors. At Saxo Bank it is possible to learn in the following ways: try out the company's demo account, watching platform tutorial videos or general educational videos as well as attending online webinars.

It is also possible to become a "student" at the Saxo Academy, where you can choose from tons of online educational videos, whose quality can be evaluated as superb. In general, the company's educational materials focus primarily on platform and product tutorials and introductory coverage of fundamental and technical analysis topics with few skill-building resources.

However, there is no glossary, at least in the widely accepted definition of that term, adding another obstacle for lower-skilled traders.

Saxo Bank does a great job tying in high-quality trading tools and research into its mobile app, unifying the reliable SaxoTraderGO web-based platform experience. The app is available both for iOS and Android users.

The mobile trading platform is available in the same languages and has the same search functions, order types and alerts as the web trading platform. The app's trading features include economic calendar, market news and other research content, including pattern recognition analysis from Auto Chartist that all matches the web-version of the platform.

The charting capabilities are rich with drawing tools, indicators and customizations, again providing a nearly identical experience with the web-based version of the platform. What is more, in addition to syncing watch lists, mobile charts in SaxoTraderGO mobile also sync with the browser-based version of the platform.

For example, if you draw trend-lines and add indicators in the web-version, they appear in the mobile app (and vice-versa).

SaxoTraderGO offers a crisp, clean design focused on usability. It's a brilliant platform. Watch lists display neatly on the left side of the platform.

Watchlists link to the product overview on the right side of the platform, so clicking on a new symbol automatically refreshes the chart. Adding new stocks to a watchlist or adding price alerts is a seamless experience.

The comprehensive account overview, besides a portfolio summary, includes performance analysis and returns breakdown. It allows traders to identify necessary adjustments to their trading strategy and improve overall profitability.

Protecting the bottom line is a set of risk management tools featuring a margin breakdown on each position, margin alerts and an account shield. SaxoTraderGO represents an excellent trading platform for manual traders, while automated trading solutions are not supported.

Menus have a similar feel, customized charts and watch lists automatically save and sync with the mobile app, and, all in all, great attention to detail can be seen throughout.

Saxo Bank is regulated by several financial authorities, including the top-tier FCA. It is a fully-licensed bank and provides negative balance protection. Saxo's software security is aligned with the best that the industry has to offer. In addition to two-factor and biometric authentication, the user will be logged out of both the web-based and mobile applications if they are not being used for a user-specified period of time.

Web disclosures include company procedures to ensure the best executions possible, underpinned by a broad range of direct market access (DMA), aggregated and in-house liquidity providers.

Saxo's latest addition is SaxoSelect. It is a mix of mutual funds and robo-advisory. It's suitable for everybody who is not eager to manage their investments and simply requires gaining some confidence in investing. It is possible to choose from different portfolios and trading strategies based on the individual clients risk appetite. The minimum investment usually starts from 20,000 USD though, and fees charged range between 0.5% and 1%.