Markaz App Review: Is It Legit or Scam?

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  • Post published:February 16, 2024
  • Post category:Reviews

 

 

 

The Markaz app has been gaining popularity recently as a new trading and investment platform, but is it legit or a scam? In this comprehensive review, we’ll take an in-depth look at the Markaz app, its features, legitimacy, safety, and whether it’s worth using for trading and investing.

Overview of the Markaz App

The Markaz app is a mobile and web platform that allows users to invest in US stocks, ETFs, cryptocurrencies, and commodities. It markets itself as an easy-to-use investing app with zero commissions, fractional shares, and auto-invest features.

Markaz was founded in 2019 and is based in California. The app is available on both iOS and Android devices, as well as on the web. It’s marketed towards beginner investors and claims to make investing accessible for everyone.

Some key features of the Markaz app include:

  • Commission-free trading – Markaz does not charge commissions on trades. This makes it easy to trade small amounts without fees eating into profits.
  • Fractional share investing – Users can purchase fractions of shares with as little as $1. This allows greater flexibility in building a diversified portfolio.
  • Auto-invest – Set up recurring automatic investments into stocks, ETFs, or cryptocurrencies. This makes dollar-cost averaging easy.
  • Easy onboarding – The app has a simple signup process and account setup designed for beginners.
  • Educational resources – Markaz provides trading tips, investing guides, market news, and other educational resources in the app.
  • Referral program – Users can earn free stock by referring friends.
  • Cryptocurrency investing – Users can buy, sell, and hold popular cryptocurrencies like Bitcoin, Ethereum, and Dogecoin.

On the surface, the Markaz app offers an appealing platform for beginners to start investing with little money. But is it truly safe and legitimate?

Assessing the Legitimacy and Safety of Markaz

When evaluating any investment platform, it’s important to look under the hood at the company itself, its regulatory compliance, security practices, and what users are saying about their experiences. This helps determine if the app is legit or potentially a scam.

Here are the key factors we evaluated to assess Markaz’s trustworthiness:

Company Background and Transparency

Markaz provides very little information about who owns and operates the company on its website or in the app. No founders or executives are listed. The company contact details include only an email address.

This lack of transparency about who is behind the company raises some questions. Legitimate platforms typically provide details about founders and leadership.

However, Markaz does appear to be a registered business entity in the US under the name Lion Street Financial LLC.

Regulatory Licenses and Compliance

Markaz states that they are compliant with all applicable US regulations for securities trading and investing. They claim to be registered with the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).

However, searches on FINRA and SEC databases could not verify Markaz or Lion Street Financial LLC’s registration. This raises compliance concerns. Unregistered platforms have higher risks for investors.

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Markaz acts as a broker and handles all account funding and withdrawals. Legit investment apps should be registered as a broker-dealer with FINRA to do this. The lack of verifiable registration is a major red flag.

Investor Protections and Insurance

Markaz does not appear to offer any investor protection programs like SIPC or excess SIPC coverage. These programs insure investor funds in case a broker fails.

The app also does not disclose any clearing firm partnerships. Clearing firms handle order execution and custody assets on behalf of brokers. Reputable brokers partner with major clearing firms like Apex or DriveWealth.

The lack of investor protections indicates higher risks. Users’ cash and assets could be at risk if Markaz failed as a business.

Data Protection and Security

Markaz states they use encryption and other security measures to protect personal data and financial information.

However, their privacy policy states they may share data with third parties for business purposes. This could include sharing data with undisclosed partners or vendors.

The app also appears to lack two-factor authentication for account logins. This standard security feature helps prevent unauthorized access.

While the security seems adequate, it may not match higher standards expected of heavily regulated financial brokers.

User Reviews and Complaints

Searching online reveals very few user reviews of Markaz at this time. A lack of chatter in investing communities and app stores is concerning for a platform claiming to be growing.

A few negative complaints indicate some users have struggled to withdraw funds from accounts. Issues with withdrawals could point to liquidity problems or worse with the brokerage.

There are also no reviews discussing tax forms or integrations with tax software. This makes it unclear if the platform properly handles tax reporting.

Summary of Legitimacy Factors

In summary, Markaz does not provide enough transparency, regulatory details, safety features, or user feedback to confirm its legitimacy and trustworthiness. While not definitive proof of a scam, these factors suggest high risks for users until more details emerge.

The lack of verifiable broker-dealer registration with FINRA is particularly concerning. Investors should exercise great caution using unregistered platforms.

Features and Offerings of the Markaz App

While there are legitimacy concerns, Markaz does appear to offer a wide range of investment products and features, especially for stock and cryptocurrency trading.

Here is an overview of the investing options available on Markaz:

Stocks and ETFs

Users can invest in over 5,000 US-listed stocks and ETFs on Markaz commission-free. This covers all major US exchanges like NYSE and Nasdaq.

Promoted stocks focus on well-known large companies like Apple, Tesla, and Amazon. However, users can search and trade any stock symbol directly.

Markaz also highlights popular ETFs from providers like Vanguard and iShares. There is a focus on broad market ETFs like SPY and QQQ.

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Fractional shares allow investing in stocks and ETFs with as little as $1. Automatic recurring investments can be used to dollar-cost average into positions over time.

Cryptocurrencies

The Markaz app supports buying, selling, and holding major cryptocurrencies including:

  • Bitcoin (BTC)
  • Ethereum (ETH)
  • Litecoin (LTC)
  • Dogecoin (DOGE)
  • Cardano (ADA)
  • Polkadot (DOT)

Cryptocurrency prices update in real-time within the app. Users can track values and performance across holdings.

Markaz states they partner with unnamed established cryptocurrency trading platforms for price data and liquidity. Users own the actual cryptocurrency held in custody by Markaz.

Commodities

A small selection of major commodity ETFs are available for investing, including:

-Gold (through GLD ETF) -Oil (through USO ETF) -Silver (through SLV ETF) -Natural Gas (through UNG ETF)

This provides simple exposure to commodities without needing a futures account.

Educational Resources

Markaz offers limited educational resources within its apps focused on beginner education.

Resources include introductory guides on subjects like stock trading basics, technical vs fundamental analysis, understanding market caps, dollar-cost averaging, and pens vs calls options trading.

There are alsoperiodic market news updates and videos from the Markaz team discussing current events and trends.

The education content covers the basics well but lacks depth compared to established brokers. Given the platform’s focus on simplicity though, it provides enough for most beginners.

Account Minimums and Costs

Markaz advertises $0 minimum balance requirements and zero trading commissions on its website and app stores.

However, once registered, the platform requires a minimum deposit of $250 to start trading. This deposit can be made via debit card, wire transfer, or crypto deposit.

While deposits carry no fees, there are some other fees to consider:

  • Inactivity fee – $10 per month after 12 months of account inactivity
  • Paper statement fee – $5 per mailed paper account statement
  • Outgoing wire transfer fee – $25 for wire withdrawal

These fees are low compared to traditional brokers. But worth being aware of, especially the inactivity fee if you don’t plan to use the account often.

Pros and Cons of Using Markaz

Based on its offerings and features, here are some of the key advantages and disadvantages of using the Markaz platform:

Pros

  • Easy to get started investing with no account minimum
  • Fractional share investing available with dollar-based amounts
  • Supports a wide variety of US stocks, ETFs, and cryptocurrencies
  • Useful auto-invest scheduling for dollar-cost averaging
  • Educational resources helpful for learning basics
  • Mobile app makes accessing and monitoring investments easy

Cons

  • Concerns over transparency and regulatory compliance
  • Lack of details and protections around investor funds
  • Very limited customer support options beyond email
  • Small inactivity and other fees add up over time
  • Missing some expected features like DRIPs and 2FA security
  • Overall legitimacy and longevity remain unproven

The low barriers to entry and commission-free trades make Markaz appealing for basic investing. But the transparency and compliance concerns create substantial risks around using the app.

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Markaz App Review: Is It Legit or Scam?

Given the legitimately concerns around Markaz, we recommend exercising extreme caution if choosing to use the app. Here are some tips for mitigating risks:

  • Start by depositing only small amounts to test the platform, rather than large sums. Look for any issues with transfers or trades.
  • Stick to only the major, liquid stocks and ETFs. Avoid low-volume securities with high spreads.
  • Use strong, unique passwords and enable all available security features. Avoid depositing extremely sensitive information. Monitor accounts closely for any unauthorized activity.
  • Review account statements regularly to ensure accuracy with holdings, transactions, and fees. Raise any discrepancies immediately.
  • Maintain detailed records of account balances, transaction history, and statements to protect against potential platform issues.
  • Understand risks around assets held by Markaz and lack of SIPC coverage. Be comfortable with potential loss of any deposited funds.
  • Consider well-established, regulated brokers as alternatives. These offer greater transparency, protections, and recourse compared to newer fintech apps.

Exercising caution and maintaining thorough records can help mitigate risks. But ultimately using regulated brokers with proven track records is recommended over platforms like Markaz with transparency concerns.

Conclusion: Unproven Platform with Serious Risks

The Markaz app provides an easy entry point to investing in stocks, ETFs, crypto, and commodities commission-free. Its mobile and web experience focused on beginners is well-designed.

However, the lack of business transparency, unproven regulatory compliance, limited security protections, and lack of investor insurance make using Markaz quite risky. Too many red flags remain compared to regulated and established brokers.

Until Markaz provides further transparency and assurances around its operations, legitimacy concerns outweigh its usability benefits. Traders and investors are best served sticking to proven platforms that prioritize regulatory compliance and investor protections.

There are now many great commission-free and fractional share trading options available from reputable firms that offer higher security and transparency. While the app seems appealing on the surface, currently too many open questions and risk factors surround the Markaz platform.

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