Passfolio Review 2023: Is It Legit? How Does Passfolio Work?

passfolio review - Is it legit?

Last Updated on January 3, 2023

Passfolio doesn't work any longer in Nigeria. You can migrate your Passfolio account to Bamboo or Trove. 

Passfolio is a finance app that offers access to over 6,000 Nasdaq and NYSE stocks, ETFs, REITs and ADRs. It also offers access to crypto as well. On the other hand other assets such as mutual funds, bonds and options are not available on Passfolio. In this Passfolio Review, we’ll break down how this investment platform works, especially for people in Nigeria.

While Passfolio used to accept customers from 170 countries, the platform changed its clearing brokers and has stopped accepting customers from most countries starting from July 2022. The only countries supported by this financial app are; Brazil, Colombia, Mexico, Nigeria, and the US.

You can start investing in Passfolio with just $5.

This online stock broker in Nigeria was founded in 2018 as a global zero-commission stockbroker and is regulated by the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

See: How to Buy Shares in Nigeria

Passfolio Main Features and Highlights

  • Country of Regulation: USA
  • Trading Fees Class: Low
  • Inactivity Fee Charged: No
  • Withdrawal Fee Amount: $0
  • Minimum deposit: $0
  • Time to Open an Account: 1 day
  • Demo account provided: No
  • Investment Products Offered: Stock, ETF, Crypto
  • Account Opening and Maintenance fees: No

Passfolio Review Summary

Passfolio commission-free trading for ETFs, stocks and REITs above $5 is attractive to investors. This investment platform has an exceptional mobile app (No desktop platform). You can open an account instantly as well.

On the other hand, the assets you can access on this platform are predominantly from the US market (ETFs, stocks and REITs) which is sort of limiting. Depositing funds on the platform is not very hassle-free. There are also withdrawal fees.

The platform also has a strong focus on Portuguese customers (especially Brazilians), as a majority of its content is in Portuguese.

Passfolio is great for beginners and long-term investors in Nigeria interested in dollar and crypto assets.

Also See: The Benefits of Buying MTN Shares in Nigeria

Is Passfolio Legit or Scam?

Passfolio is regulated by top-level authorities (regulators) and offers extra protection to investors. So you can consider it a legit and safe investment app.

It also gives investor protection to its customers under the SIPC policy of up to an additional $30 million (with a cash sub-limit of $900,000 per account), subject to an aggregate limit of $150 million.

So how does this platform protect you exactly? Well operates via a single legal entity called Passfolio Securities LLC, a member of SIPC.  The SIPC protection covers notes, stocks, bonds, mutual funds, company shares, and other registered securities.

However, the SIPC does not cover instruments such as unregistered investments (securities), unregistered limited partnerships, fixed annuity contracts, currency, and interests in commodity futures contracts or commodities such as gold or silver.

It is important to note that Passfolio does not have a banking license and is not listed on any stock exchange.

Based on the fact that Passfolio offers its customers some protection, and is regulated by the US Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). We can conclude that it is a safe and legit platform.

Check Out: Best Apps for Cryptocurrency Trading in Nigeria

Is Passfolio registered in Nigeria?

While Passfolio and other Stock trading apps in Nigeria aren’t fully regulated by Nigeria’s financial regulators, they are currently in talks with the regulators to kick off registration.

This platform isn’t just for stocks, it also offers access to crypto and is fully supported in Nigeria.

Passfolio App

Passfolio app

Passfolio’s mobile app is very user-friendly. The app’s clean design and ability to easily access functions are part of what makes it a good stock trading platform. However, the stock order types are limited on the app.

This app is great for beginners well as older heads because of its simplicity and the functionalities are easy to find. it is also available in English, Portuguese and Spanish.

Passfolio Login & Security

Passfolio offers a safe login experience where its users can easily select their personalized login setup in the ‘Settings‘ menu. The platform uses two-factor authentication (2FA) and will ask for biometric authentication upon each login. The app’s two-factor authentication (2FA) works via SMS and is required of everyone upon registration and cannot be deactivated.

2FA offers a high level of security, while users can log in to Passfolio via its web app or mobile app.

See: Best Online Savings Platforms in Nigeria

Passfolio Minimum Deposit

Passfolio doesn’t require a minimum deposit from its users. They don’t also have to pay deposit fees as well.

How does Passfolio Work

There are two types of Accounts available on this platform; the Standard Account and the Pro Account.

The Standard Account is free and users can access commission-free stock trades (securities that cost less than $5 will be charged a fee of $0.02/share), fractional share trades, crypto and very limited access to the platform’s Robo Advisory service (Smart Portfolio)

While for the Pro Account, users are charged a $5 monthly account fee with the first month being free of charge). They will have access to all the features of the Standard Account. Extra features for the Pro account include stop orders, margin trading and dividend reinvestment. 

To activate the Pro Account, simply click on the “Passfolio Pro” option in the “Account” tab. You activate the standard account when you sign up.

You can open your Passfolio account through a mobile phone or a computer. Both processes are smooth and effortless.

To open an account on a mobile device, follow these steps: 

  • Download the app on the Google play store or Apple Appstore
  • Then Click on ‘Get Started’ and Select language preference
  • Enter the requested information like your email address, name, phone number, country of residency and citizenship, tax number and residential address).
  • Next, verify your phone number 
  • Then answer questions concerning your employment status, income level, and your investment goals
  • Finally, Make a selfie with the camera and scan your government-issued ID, then verify your email address and you would have created an account.

One of this platform’s unique selling points is that it allows users can top up their crypto accounts with cryptos, which is very attractive to a lot of people as well as its high margin rates for stock trading. On the other hand, users of this platform can only choose between Market and Limit orders, which is a narrow order offering like some competitors that offer more order types.

See: How to Buy Foreign Shares in Nigeria

How to Invest in Passfolio

There are three ways to invest on Passfolio:

  • Invest in US Stock Markets.
  • Invest in Cryptocurrencies.
  • Join PassEarn and earn passive dollar income (s 5% per year for any Passfolio user and 7% per year for Pro users) with no fees or minimum deposit.

Passfolio Fees

There are different ways to deposit funds into Passfolio with most of them coming free of charge. So you will hardly experience deposit fees on this platform. Except for credit/debit cards with a charge: 3.8% conversion fee + 1% Passfolio fee.

The deposit transfer methods this platform supports are; USD paper checks, wire transfers, Wise, Revolut, ACH, TEDs, SWIFT, SafetyPay and SEPA. Although the transfer options available to you will vary according to your location.

However, withdrawals are not free on this platform. All withdrawal transfers come with a fee. However, Passfolio’s overall withdrawal fee profile is still fairly okay.

Trading in all assets except for cryptos is free of charge as long as the trade value is above $5, but trades less than $5 cost $0.02 per share.

Also See: Best Forex Trading Apps in Nigeria

It is important to note the difference between trading fees and non-trading fees. Trading fees happen when you make a trade. Trading fees can be commissions, spreads, financing rates and conversion fees. While Non-trading fees include charges not directly related to trading, like withdrawal fees or inactivity fees.

Passfolio’s no trading fees feature makes the platform well-suited for beginner traders.

When users trade Stock, ETF, REITs (real estate investment trusts) and ADRs (American depositary receipts, essentially stocks of companies not listed in the US), Passfolio charges no commission on these trades as long as they are above $5. Trades with a value of less than $5 will be charged a $0.02 fee per share. 

Check Out: Top Real Estate Investment Platforms in Nigeria

While for Margin trading (you borrow money from your broker and can purchase more shares than you could with just the available cash in your account), you have to pay interest on the borrowed money – the interest rate is called the margin rate and it can account for a significant portion of your trading fees.

Passfolio margin rates are high.

Its annual margin rate for stocks is 9.8%, while in regard to Crypto, Passfolio’s crypto partner Gemini charges 0.35% on each crypto trade, but the platform does not charge any fees on top of that. Opening, maintaining, and closing your crypto account with Passfolio are all free.

Then there are also Robo-advisor fees. Passfolio offers a Robo-advisory service called Smart Portfolios, which charges a 0.75% fixed annual advisory fee.

However, other fees related to Smart Portfolios may apply. As the total Robo-advisory fee is proportional to the time of use of the service and the total amount invested on the day of collection.

Please note that all withdrawal transactions on the platform comes with a price.

Passfolio Customer Servce

Passfolio customers can get in touch with the platform via three customer care channels; email, live chat and phone support.

The email service response is super fast (they reply within 20 minutes), while the live chat is a bit slower than the email channel. On the other hand, its phone support is terrible.

Getting in touch with Passfolio customer service is very helpful as its representatives provide answers that are detailed and relevant.

other helpful options for customers that the platform provides include a client support page, and a detailed FAQ section.

Is Passfolio right for You?

This platform is still in Infancy and is still growing, however main attractive feature of Passfolio is that you can trade free of charge as long as your trade exceeds $5.

Depositing funds is free and there are no account opening or maintenance fees either. The mobile app is easy to use and opening an account is pretty fast. The platform has three main investment options; stocks, crypto and PassEarn.

However, order trade types are limited and all withdrawals come with a fee. Educational content for customers is few and is mostly available in Portuguese. If you’re looking for a simple platform for investing in US stocks or securities then Passfolio is suitable. Or you can check out other top investment platforms in Nigeria

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