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If you’ve recently received a letter from your broker asking for your National Insurance number, best thing to do really 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 financial centre of the universe. Security and due diligence being the corner stone of modern financial services business.
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But why are brokers asking for national insurance numbers now?
It’s not like they don;t already have them? At this years 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 Pus 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 like ETX Capital followed suite.
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 form trading unless your account is fully compliant. It literally takes less than one minute.
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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously acting as multi asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2000.