Retail Account vs Professional Account

Retail is the default account classification for every EU client unless they qualify as professional. Retail accounts at any EU-regulated broker come with the full suite of ESMA investor protections: leverage capped at 30:1 on FX majors, 20:1 on minors and gold, 10:1 on other commodities, 5:1 on equities, and 2:1 on crypto. Mandatory negative balance protection ensures you can never lose more than your deposited balance, and client funds must be held in segregated accounts at top-tier banks.

All EU retail clients are also eligible for investor compensation schemes — EUR 20,000 per client at CySEC brokers via the Investor Compensation Fund, up to EUR 100,000 at BaFin brokers via the Deposit Guarantee Scheme, up to GBP 85,000 at FCA brokers via FSCS. These protections cost nothing and activate automatically.

A professional account lifts most of the ESMA retail restrictions in exchange for waiving key protections. Leverage can go up to 500:1 on FX majors at some brokers, negative balance protection becomes optional or waived, and investor compensation coverage typically does not apply. To qualify, a client must meet at least two of three criteria defined by MiFID II:

1. Financial instrument portfolio (cash + securities) exceeding EUR 500,000 2. Average of 10+ significant transactions per quarter of €X size (typically €50k+) over the previous four quarters 3. At least one year of relevant professional experience in financial services

Brokers must also conduct a suitability assessment to confirm the client understands the risks. The application process usually takes 5–10 business days.