Independent Review Pacific Financial Derivatives

Founded in 1999
Headquarters in New Zealand

Introduction

Website: https://www.pfd-nz.com/en

Pacific Financial Derivatives Ltd (PFD) is an online broker operating out of Auckland New Zealand, but with a global reach. The broker has been licensed as a Derivatives Issuer with license #FSP28944, and authorized to operate by New Zealand’s Financial Markets Authority (FMA). It has also entered into the Financial Dispute Resolution scheme in New Zealand, which is a third-party run resolution service that works to solve disputes between clients and brokers.

As a broker licensed by the FMA there are a number of laws and regulations that PFD is required to follow. These include limiting hedging activities to dealings with licensed hedging counterparties, the maintenance of adequate capital, and segregation of client funds. All of these help to keep clients funds safe, and risks contained.

Pacific Financial Derivatives has been operating for over 2 decades, having been founded in 1999 by a Japanese businessman who had previously been conducting similar activities in his home country. This broker offers trading in currencies, commodities, and stock indices on the Metatrader 4 platform. With its long history of client services PFD has become a globally recognized broker.

Besides keeping low costs and offering clients excellent trading methods, the broker is also well known for its client support. This support team is comprised of individuals who are knowledgeable and professional, willing to help clients in any way they need. This isn’t limited to what you would typically consider to be customer support, but it extends to technical support, and advice regarding market analysis.

Clients of PFD range from beginners to professionals to institutional clients, and PFD is consistently highly rated by its client base.

Quick Look at Pacific Financial Derivatives

As part of the research process to write this review, we set up a demo account with Pacific Financial Derivatives and accessed their website and their mobile trading platform. The process of opening a demo account was straight-forward and quick, taking just about 1 minute. Opening a real account might take somewhat longer as more information is required when opening a real money account.

The demo account is very useful in determining what trading through this broker might be like. Because live price feeds are used using the demo account is a good simulation of live trading. It also gives those who are unfamiliar with the Metatrader 4 platform used here the chance to experience the platform first hand. This can help in live trading as the experience with the platform can help to avoid potential mistaken orders.

With several account tiers available, and a strong history of client trading education, Pacific Financial Derivatives is a broker that’s suitable for any level trader, and their client base reflects this.

The rest of the review will focus on the details of the broker and will help you decide if they are suitable for your own trading.

Regulations & Licenses

Countries/Regulators

PFD is registered as a company in New Zealand holding the registration number 973842. In addition to that it is also regulated by the country’s Financial Markets Authority (FMA) under license number FSP28944. This regulation provides for several client safety features, such as the segregation of client funds from operating funds.

The broker accepts clients from most countries around the world, except for U.S. residents and residents from countries that have been sanctioned by the UN or OFAC. It is recommended that potential clients check the laws of their own jurisdiction to ensure that the activities provided by PFD are legal.

Languages

The PFD website is available in English, Russian, Chinese, and Vietnamese. Customer support is also provided in these languages. These languages are supported because the bulk of the broker’s clients are located in China, Russia, and Vietnam, or in an English speaking country.

Account types

Retail Trader Accounts

There are three basic account tiers available at PFD, and additionally clients can take advantage of Islamic accounts and demo accounts. Here are more details:

PFD Trader Account: This is the base level account, and it is unique in that it has no minimum deposit. It also comes with no commissions or fees as the broker revenue is included in the spreads. The account offers 300:1 leverage on accounts with balances of $5,000 or less, and 100:1 when the account balance exceeds $5,000. Minimum trade size is 0.01 lots.

PFD Pro Account: The PFD Pro account also comes with no minimum deposit, but keeps leverage capped at 100:1. It also has tighter spreads than the PFD Trader account, but there is also a commission of $1 per lot per side. Minimum trade size is 0.01 lots.

PFD Pro Plus Account: This top tier account features the tightest possible spreads, along with a commission of $1 per lot per side. There is a maximum leverage cap of 100:1 and a minimum trade size of 0.01 lots. The account also requires a minimum initial deposit of $1,000.

Islamic Accounts: The Islamic account follows Sharia law in that it does not charge swap fees for overnight positions. However, any position held for three consecutive nights will begin to incur administrative charges. Other than that, it is the same as the PFD Trader account.

Demo Account

PFD makes a demo account available to prospective clients so that they can test the trading platform and the broker’s price feeds. The demo account comes with $10,000 in virtual currency, which can be increased on request. The downside to the demo account is that it expires in just 15 days, although there is no limit on the number of demo accounts that can be opened by an individual.

Fees, Costs & Spreads

As mentioned above there is a commission charge of $1 per lot per side for two of the three account tiers, but that is compensated for with lower spreads. In the case of the base level Pro Trader account those spreads begin at 0.7 pips for GBP/USD or 0.8 pips for EUR/USD. Spreads for other pairs, CFDs, commodities, and indices are higher. Spreads for PFD Pro and PFD Pro Plus accounts are far lower, beginning at 0.1 pips.

There are no fees on these accounts, although the Islamic account could face an administrative fee when overnight positions are kept open for three days or longer.

There are also fees charged on deposits and withdrawals, which will be covered below.

Deposits & Withdrawals

PFD is somewhat unusual among online brokers in that it charges fees on deposits as well as withdrawals. These deposit fees can range from 1.5% to 3.2% depending on the method used to deposit. Most funding options, credit/debit cards and electronic wallets, are credited immediately, but bank transfers can take up to 5 business days. It also appears there are no fees charged by PFD on bank transfers, but it is quite likely the bank itself will have fees.

Withdrawals are also subject to fees of 1% to 2.5% depending on the method used for withdrawal. Withdrawal requests can take up to 24 hours to process for most methods.

In all cases you can only deposit from and withdraw to an account that is in your name. Any third party deposits will be returned, and any third party withdrawal requests will be denied.

There have been no online reports of deposits going missing in transit at PFD, nor have there been any reports of legitimate withdrawal requests not being honored.

Trading Platforms

There is a single trading platform available from PFD, but the good news is that it is arguably the best trading platform available for forex and CFD trading. That platform is the award-winning Metatrader 4 platform, which has long been recognized by forex traders as the most powerful charting and technical analysis tool available.

Pacific Financial Derivatives Ltd Trading Platforms

PFD makes both the desktop and mobile versions of Metatrader 4 available to traders. The desktop version is available for Windows and the mobile version is available for both iOS and Android devices. Note that there is no web-based trading platform available.

In addition to the individual Metatrader 4 platforms PFD also offers Metatrader Multi Terminal and Multi Account Manager (MAM) platforms for use by money managers and institutions that need to manage multiple accounts.

There are several benefits to clients of using the Metatrader family of trading platforms:

  • MetaTrader4 Client Terminal is the online trader's tool that enables traders to conduct technical analysis, make trade transactions and work with Expert Advisors.
  • MetaTrader4 Mobile Terminals enable trade account management and technical analysis from iOS and Android based mobile devices (mobile trading).
  • MetaTrader Market. Third party developed trading robots and technical indicators to raise your trading to a new level.
  • Trading signals. Copying trades of successful traders, or social trading.
  • Wide range of tools for money managers, investors and professional traders.

Assets Available

PFD is somewhat limited in the number of assets offered for trading, although it does offer many of the major assets, so traders shouldn’t be at a loss when trading with this broker. While the broker does offer trading in 49 different major and minor forex pairs, there are only 9 CFDs on stock indices available, and 6 CFDs on commodities (Brent crude, WTI crude, Natural gas, Gold, Silver, and Copper). Notably missing are any CFDs for individual stocks.

Order Types

Traders can choose from the four basic types of orders: limit orders, market orders, stop loss orders, and trailing stop orders. Orders are able to be changed or cancelled at any time before they are filled. The Metatrader 4 platform makes order placement very easy, and orders can also be easily modified to add stop loss or take profit levels.

Notification and Alerts

Notifications and alerts at PFD are contained within the Metatrader 4 platform. Alerts are the most significant notifications of the important market developments. MetaTrader 4 allows you to create an alert for certain trading conditions, such as exceeding the specified values by Bid and Ask prices. If a specified event occurs, MetaTrader 4 will notify you by a sound or an email. You can also enable sending SMS or push notifications to your mobile phone.

Pacific Financial Derivatives Ltd Notification and Alerts

You can choose from multiple alert and trade/deal notifications and can even create alerts right from the chart.

Pacific Financial Derivatives Ltd Alerts from the chart

The trader is in complete control of all these alerts and notifications, deciding how to receive them (SMS, email, etc) as well as setting the levels necessary to generate the alert.

Risk Management Tools

Risk management at PFD is accomplished through the tools already described, such as the stop and trailing stop orders. There are also many third-party add-ons for the Metatrader 4 platform, and some of them are specifically made for risk management. And of course there are also the alerts and notifications that can be configured within the MT4 platform and will help with managing trader’s risk.

Pacific Financial Derivatives Trading Tools and Analysis

The only analysis tool provided, other than the technical analysis available in the Metatrader platform, is the economic calendar provided on the PFD website. It is there to help traders with their fundamental analysis and it is a schedule of important economic data releases from around the world. These can be especially important for forex traders as the world’s currencies often move in reaction to the strength or weakness of particular parts of the economy in each country of the world.

Education and Training

There’s really no education to speak of on the PFD website, which seems a huge oversight for a broker that’s been in business for over two decades. Perhaps in that time they’ve found that it isn’t something their clients want, which could be true given the huge number of online resources related to trading education. It’s possible they’ve decided to remain focused on being the best broker possible, and are allowing others to focus on being the best educational resource for traders.

Customer Support

The customer support team at PFD is said to be one of the best there is. We don’t know how to quantify that, but we can say that they were very quick to respond, and very knowledgeable about the Metatrader 4 platform, and about financial markets in general. That was the English speaking support staff and we can’t vouch for the Chinese, Russian, and Vietnamese customer support, but it makes sense they would also live up to the high standards that PFD has for its support staff.

It is possible to reach support 24/5 (no weekend coverage) via several channels. There is an online chat as well as a Skype chat that can be used. And there is an online web form. In addition they can be reached via email, telephone, or through their social media channels on Facebook and Twitter.

Independent Opinion & Rating

Pacific Financial Derivatives has a long history as an online broker, and a solid reputation as well. Its clients seem quite pleased with the services provided, and from what we’ve seen it isn’t a surprise this is true.

On the positive side the broker offers what is likely the best trading platform there is in Metatrader 4. It doesn’t include any add-ons with the platform, nor do they have tools such as VPS. They are also missing any sort of daily market updates or analysis. Now it is possible to get all of this information and training from other sources, so it’s possible that not including them was a conscious decision on the part of the broker.

The number of assets offered is quite limited, especially since equities are not offered at all. Those who are looking for forex trading will be pleased with the 49 currency pairs offered though. They will also be pleased with the low spreads on these currency pairs.

Also, on the positive side for PFD is its regulation and reliability, as well as the safety of customer data and funds. With no complaints regarding withdrawals over more than two decades it is easy to say that client funds are safe with this broker.

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