Freetrade app

takesyourchances

tin586 wrote: »

Thank you for sharing.
I’ve been considering a general non ISA share dealing account with Freetrade or similar, but have struggled to find info to prove or disprove their loading of the execution price. They might have free trades, but there is no free lunch after all.
The price you paid seems a bit higher than the data I am seeing for trades going through at around the same time.
For one or a few shares this is pretty immaterial, but it would become a serious consideration for a larger number to set against the apparent benefits of the ‘free’ trades.
Thanks again.

No problem at all, happy to help. That was the final price with the 0.5% stamp duty, there is an option as well on freetrade to do an instant deal at £1. The free offering is a bulk grouping which closes at 3pm each trading day (it used to be 4pm) so there could of been movement in price during this period. How accurate their price is to the time I am not 100% sure, but as you said nothing is fully free and for small amounts it would not overly matter.



As I said I will be keeping my main investing in my HL S&S ISA and SIPP, but fancied a non ISA account for some shares to build up and hold at a low trading costs as I won't be going heavy in single shares and this type of account suits the smaller sums I would be putting in.


The likes of Robinhood and M1 finance seem popular free trading apps in the US, I am interested what Robinhood will be like for us in the UK when it happens. Equally fractional shares be interesting for the US with freetrade at some point. I am hoping freetrade will add realty income corp in the US at some point as I would like a dabble with it too. M1 finance in the states offers fractional shares if I am right so maybe others will follow suit.



I have read on some blogs others in the UK using Freetrade for shares / ETFs which was were I heard about it but outside of that not a lot of noise.

barnstar2077

tin586 wrote: »

Thank you for sharing.
I’ve been considering a general non ISA share dealing account with Freetrade or similar, but have struggled to find info to prove or disprove their loading of the execution price. They might have free trades, but there is no free lunch after all.
The price you paid seems a bit higher than the data I am seeing for trades going through at around the same time.
For one or a few shares this is pretty immaterial, but it would become a serious consideration for a larger number to set against the apparent benefits of the ‘free’ trades.
Thanks again.

Why would you want a non ISA account with Freetrade, isn't it better to have your investment in an ISA? Or are you already maxing out your ISA?

tin586

barnstar2077 wrote: »

Why would you want a non ISA account with Freetrade, isn't it better to have your investment in an ISA? Or are you already maxing out your ISA?

Already maxing out ISA (and am sorted with pensions).

While I could ultimately go with an iWeb general sharedealing account (£5 a trade is not in the final reckoning such a big deal) I am looking to diversify, due to the amount I have with iWeb already in my ISA account.

Unfortunately, it is very difficult to find info on the likes of Freetrade and Trading 212 that goes beyond the surface hype. Even the otherwise sensible Monevator site is encouraging sign-ups by peddling free shares.

Bravepants

Just downloaded this app for my iPhone...on the "What's your nationality?" page it is asking for my National Insurance number.


Is that normal?

darkidoe

I am also quite skeptical about the business model of freetrade. It sounds very much built like the unicorn startups banks of Monzo, Starling focusing on mobile app based services. Very attractive in ideology but is there a catch?

bowlhead99

Bravepants wrote: »

Just downloaded this app for my iPhone...on the "What's your nationality?" page it is asking for my National Insurance number.

Is that normal?

It's not abnormal. If you haven't declared your nationality, country of residence and tax ID they would find it more difficult to be able to fulfill their obligation to report your account to HMRC to be passed on to a relevent foreign tax authority (e.g. if you were a resident of France or a citizen of USA).

darkidoe wrote: »

I am also quite skeptical about the business model of freetrade. It sounds very much built like the unicorn startups banks of Monzo, Starling focusing on mobile app based services. Very attractive in ideology but is there a catch?

They are offering a service (allowing people to trade small amounts for tiny fees or no fees) which has not really been offered by the existing players in the industry (other than occasional promotional activity) because it wasn't profitable. They will hope to eventually get it to commercial viability by getting huge volumes. In the meantime they will have someone financing it while it likely makes large losses.

The ideology is attractive to potential customers who want to trade cheaply. Disruptors that succeed in meeting un-met wants or needs can be successful. The question is just can they reach sufficient profitability before they run out of funding for set up and marketing and operations.

Some of the functionality or future functionality like being able to trade fractional shares, sounds attractive to people with only small amounts. But from the perspective of the underlying investee company, the fractional share doesn't exist - freetrade's nominee company is the legal owner of (say) 100 shares and freetrade knows that customer A has a beneficial ownership of 7.84 of them while customer B has 60.06 of them and customer C has 32.1 of them. If freetrade has some problems, you won't be able to take your 7.84 shares elsewhere and re register them with another conventional broker or get a paper certificate. You would need to sell your funny partial shares through freetrade. Which is fine if trading is 'free' and freetrade are still in business to help you accomplish the transaction.

It is a bit like other brokers with low fees and quirky features. Like with DeGiro, cheap as chips, but if you buy shares and want to have shares properly held for you alone that they can't lend out to others to help them earn 'stock lending' income to defray the cost of their operations, you have to get a 'custody' account which can have a different fee structure. Understanding the small print and business model is important when looking at new market entrants.

Even without such quirks, any disruption to day to day operations caused by a relatively young, small or financially unstable firm going under can cause the customers big headaches, as you may lose access to your assets for a long period of time while the firm goes through insolvency or administration. You might still have the assets at the end, but be denied the chance to sell them when you want or need to, pending 'stuff' getting sorted out. See recent threads on SVS securities etc.

There are always people trying to 'shake up' the industry with groundbreaking service features or low costs. For mainstream investors, the benefits might simply be that the threat of new entrants causes the incumbent service providers to offer lower costs or better service to stave off this competition... with the result that you don't actually have to take a chance on the new provider yourself; the very existence of the new provider might drag the old-school provider into the 21st century.

eskbanker

bowlhead99 wrote: »

The ideology is attractive to potential customers who want to trade cheaply. Disruptors that succeed in meeting un-met wants or needs can be successful.

To me this hits the nail on the head - based on posts on here, there is clearly some sort of demand from people whose view of investing is "I have £25/50/100 that I want to invest, which shares should I buy and what's the cheapest way of doing it?".

The fact that such posts are usually met with collective eye-rolling from regulars (ahem!) doesn't negate the fact that many ask the question in the first place so Freetrade's approach would seem to match that well....

takesyourchances

Good reading above on Freetrade. I hope this app works out long term as it is a good shake up that the UK needs for this type of broker.

As I said in other posts here, I will be keeping my large investing with HL and never went to single shares there because of trading costs and I would not put large amounts into them so it was pointless, but for smaller money this works for what I would like and will only be a peanut fraction so to speak of my investing.

I will be keeping my IT's, Funds etc on HL and aiming to max out my ISA each year or as close as. This year I was able too. So a bit of smaller money as in £30 a week at the moment selecting shares over time this type of set up suits this.



I tried for the first time a second company share today with Freetrade and tried a US Company after submitting the W-8BEN which was very easy on Freetrade and bought a share with Bank of America. It was very straight forward, trading opened 2.30pm UK time and got it before 3pm for the free dealing and the FX exchange was $1.31 odd to the pound and all went through fine and effortless.

Freetrade does match this type of need well, just like Robinhood in the US and M1 Finance, with Robinhood due here this year too. Interesting indeed! Also the UK is a lot behind the US in mainstream investing, you see it advertised on TV alot there about investments were as I feel investing is still not openly talked about here as much, it is often a topic I would never hear much about with friends and mostly don't talk about it as they don't get it.

takesyourchances

I have been adding a bit more to my Freetrade account, still low amounts and have a total of £450 invested in several stocks now. Added Coca Cola and Verizon to US stocks.



I see they are expanding their platform soon which will be interesting and venturing in European markets, Ireland, Netherlands for users.



As I said, it won't be replacing my HL account and my large amounts there but for some single stock buying with small amounts I am finding it very interesting indeed

bowlhead99

{poster's_name_removed} wrote:

I have been very impressed with this company and their app. Buying and selling shares made easy, with their basic trading option being cost free. They have a good range of shares available, and their customer service is second to none.

I have a free share link if anyone wants to join. Send me a PM and I'll send it to you.

Good to hear the review. But please use the separate 'referrers' (https://forums.moneysavingexpert.com/forumdisplay.php?f=42) board so that the main boards can avoid being overwhelmed with posts from people posting or seeking referral links and touting for PMs to spread their links.