What protections matter most when choosing a broker?
Verdict
- The protections that matter most are a licence covering the company that holds your account, segregated client money, negative balance protection and capped leverage; Pepperstone provides all four to Australians through its ASIC-licensed company, and it is our first pick.
- A guaranteed stop-loss is a valuable extra that Pepperstone does not offer; Capital.com does.
- A compensation scheme matters only if a broker fails with a shortfall; Pepperstone names none for Australian clients.
- Every protection weakens if you opt up to a professional account.
Not every 'safety feature' carries equal weight. Some protect you on every trade, some only if the broker collapses, and some are marketing. We rank them in the order they are likely to save you money, and show how Pepperstone and Capital.com, our top two in Australia, measure up.
Our ranking, and why Pepperstone fits it
First, the right licence for the right company: your contract must be with an entity regulated where you live. For Australians at Pepperstone that is Pepperstone Group Limited, AFSL 414530. Second, negative balance protection, because a gap over a weekend can otherwise leave you owing money; Pepperstone restores a negative retail balance to zero. Third, leverage limits, which cap how fast losses can build: 1:30 on major FX for Pepperstone's Australian retail clients. Fourth, segregation of client money, which Pepperstone says it holds at top-tier banks. Pepperstone covers all four, and pairs them with a $10 minimum deposit.
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Pepperstone and Capital.com, protection by protection
| Protection | Pepperstone | Capital.com |
|---|---|---|
| Australian licence | AFSL 414530 (Pepperstone Group Limited) | AFSL 513393 (Capital Com Australia Pty Ltd) |
| Retail leverage, major FX | 1:30 | 30:1 |
| Negative balance protection | Yes, restored to zero | Yes, reinstated to $0 (help-centre statement) |
| Guaranteed stop-loss | Not offered | Offered (per its help centre) |
| Segregated client money | Yes, top-tier banks | Not in our verified data |
| Compensation scheme named | None | Not in our verified data |
The protection most traders overlook: stop-loss certainty
A normal stop-loss is an instruction, not a promise. If EUR/USD gaps 50 pips over a weekend past your stop, a 1-lot position is closed at the next available price, costing about $500 more than planned at $10 a pip. A guaranteed stop-loss closes exactly at your level, usually for a fee. Pepperstone does not publish one in Australia; Capital.com does. If you hold leveraged trades through weekends or major announcements, weigh that difference honestly.
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Protections that matter less than they sound
- Big client numbers or awards: they say nothing about how your money is held.
- A licence held by a sister company in another country: it does not cover your account.
- Compensation schemes, for most traders: they only pay if a firm fails and segregated money is short.
- Trading platform security badges: useful, but secondary to who holds your money.
How to check each protection in ten minutes
- Find the company name and AFSL in the broker's website footer and on your client agreement.
- Read the negative balance protection wording on the broker's protection page.
- Look up the retail leverage table for your account type.
- Search the PDS for 'segregated' and 'insolvency' to see what happens if the firm fails.
- Check whether guaranteed stops are offered and what they cost.
Sources
Protection pages published by the brokers.
Is negative balance protection more important than a compensation scheme?
For most retail traders, yes. It applies whenever a market gaps through your equity, while compensation only matters if the broker fails with a shortfall in client money.
Does Pepperstone offer guaranteed stop-losses in Australia?
No guaranteed stop-loss appears on its Australian pages or in its August 2026 PDS. Capital.com offers one.
Do professional clients keep these protections?
Not all of them. At Pepperstone Australia, pro clients get higher leverage and only a one-time negative balance protection of up to USD 100,000.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. This page is general information, not investment advice; read the broker's PDS and TMD before you trade.