The difference is whose money is at risk and where the trades go. At a broker you deposit your own money, your orders are executed or arranged for you, and every loss comes out of that deposit. At a prop firm such as WhitePips you pay a one-time fee, trade a simulated account to published rules, and the firm pays you a share of the simulated profit, so the most you can lose is the fee.
Neither is a better version of the other. They are different arrangements that answer different questions, and this article sets them side by side. It is general education, not a recommendation for either.
What does a broker do?
A broker gives you access to a market. You open an account, deposit money and place trades, which the broker executes, passes to a liquidity provider or takes on itself, depending on its model. With CFDs and futures it offers leverage against your deposit, and it earns from spreads, commissions, swaps or fees.
Everything on the account is yours: the deposit, every gain and every loss. There is no profit target, no daily loss limit set for you and no outside rule on how you size or how long you hold, beyond the broker's margin requirements. If losses eat into your margin, positions can be closed for you; how that works, and whether there is any protection against a negative balance, depends on the broker and where it is regulated. Its own disclosures say which.
A licensed broker holds client money under its regulator's rules, and some regulators run compensation schemes for clients. Which protections apply, if any, depends on the licence.
What does a prop firm do?
A prop firm of the WhitePips kind sells an assessment. You pay a one-time fee, receive a simulated account and trade it to published objectives: a profit target where there is one, loss limits, and conduct rules. Pass, and you are issued a funded account, which is still simulated, on which payouts can be earned. Instant accounts skip the assessment and are funded at purchase, for a higher fee.
The Terms of Service are explicit about what the firm is not. WhitePips does not hold client money, execute orders for you, manage your assets or give personal recommendations, and no order you place is sent to an exchange or broker. Unless the website says otherwise, it is not authorised by a financial services regulator, so the protections of regulated brokerage, such as investor compensation schemes, do not apply. Payouts are rewards paid by the firm from its own resources, based on simulated performance.
Whose money is at risk?
At a broker, yours, all of it. Leverage multiplies the effect of every price move on your deposit, in both directions.
At WhitePips, the fee. The FAQ answers the question directly: no capital of yours is placed at market risk, and you cannot lose more than the account, because the Max Loss ends it first and there is no negative balance, no margin call to fund and nothing to repay. That does not make the fee safe. The Risk Disclosure warns that the whole fee can be lost, and that buying further evaluations after a breach adds up.
How does the same move compare at each?
Take a $10,000 deposit at a broker against a $10K Edge 1 Step at WhitePips, which costs $114.
- A 7.5% drawdown. At the broker, $750 of your own money is gone and the account stands at $9,250; you can keep trading it. On the Edge 1 Step, $750 is the Max Loss, so equity touching $9,250 ends the account. What you have lost is the $114 fee; the $750 was simulated.
- A 4% losing day. At the broker, a $400 day is a bad day and nothing more. On the Edge 1 Step, $400 is the Max Daily Loss, and reaching it ends the account.
- A 10% gain. At the broker, $1,000 is yours, before costs and any tax. On the Edge 1 Step, $1,000 is the profit target: reaching it, with three days that each closed at +$50 or more and no positions open, passes the evaluation. Nothing is paid for it; it earns the funded account.
- The next $1,000, once funded. At the 80% split, $1,000 of payable profit is an $800 payout, once the conditions are met: three profitable days before each payout, with the first request on demand once funded.
The comparison cuts both ways. The broker puts far more of your own money at stake and lets you keep every dollar of gain; the prop firm caps your cost at the fee but sets hard limits and pays a share.
How do the rules differ?
A broker's rules are mostly about margin. A prop firm's rules are the product. At WhitePips they include:
- A Max Daily Loss and a Max Loss on every CFD plan, measured on equity including open losses, both hard limits. On futures, a trailing Maximum Loss Limit and, where the plan has one, a Daily Loss Limit that stops trading for the rest of the day.
- A cap on size: Max. Exposure on CFD accounts, and on futures a maximum number of contracts, such as 4 Mini | 40 Micro on a $50K account.
- Holding rules. On CFD plans without the Weekend Holding add-on, positions open at 4:45 PM New York time on Friday are closed by the system. On futures, open positions are closed at 3:55 PM CT every session.
- Conduct rules: expert advisors and trade copiers only for your own trading, and a list of prohibited practices reviewed by the risk desk.
- Identity verification, approved before the first payout.
None of this exists at a broker, and none of it is optional at a prop firm. If you would find a hard daily limit intolerable, that is worth knowing before you pay a fee.
What do trades cost at each?
At a broker, spreads, commissions and swaps come out of your own balance, at whatever rates that broker sets. At WhitePips the same kinds of cost are charged on the simulated account and count toward its profit target and loss limits like any other result. On Edge and Instant plans the commission is $5 per lot round turn on forex, $6 on metals and $6 on energies, with indices and stocks free and crypto at 0.06% of the trade value. Positions held through the daily rollover can be charged swaps unless the account has the swap-free option.
How is the money paid out?
At a broker you withdraw your own balance under the broker's withdrawal terms. At a prop firm you request a payout, which is your share of the simulated profit on a funded account. At WhitePips the split is 80% up to 95% on Edge, 75% up to 90% on Instant Pro, 70% up to 85% on Instant Go, 80% and then 100% after 30 days funded on Prime, and 90% on both futures plans. Payouts go by bank transfer or crypto, and each plan publishes its own cycle and minimum.
Because payouts come from the firm's own resources, they depend on the firm continuing to operate and being able to pay. That is a different kind of counterparty risk from a broker's, and the Risk Disclosure says so plainly.
Which suits which kind of trader?
That is a personal decision, and nothing here is advice to choose either. What can be said is which question each arrangement answers.
- If you want to trade your own capital with no outside rule on how much you lose in a day, that is what a broker account is.
- If you want a fixed, known cost for a test of your trading, and you can work inside a daily loss limit and a fixed floor, that is what an evaluation is.
- If you are comparing the two on cost, compare like with like: the fees you might spend on attempts against the deposit you would put at risk, not the account size printed on a plan.
- Either way, check that the service is lawful where you live. WhitePips does not serve restricted jurisdictions, and a country missing from that list does not mean the service is lawful there.
To see the plans themselves, the CFD accounts run on MetaTrader 5 and the futures accounts on Volumetrica with dxFeed data. The choice inside a prop firm, between an evaluation and an account funded at purchase, is covered in instant funding or evaluation.