£0 commission investing - any users of Trading212 ISA?

dellboy102

Hi All

I've just realised Trading212 do ISA's as well now (guessing they have done this for a while but i've not been up to date!), the fees and the 0 commission trading sound too good to be true, has anyone here tried it and can offer their opinions? My funds I already hold on iWeb so not too worried about the lack of funds on this platform.

My inititial thoughts were the buy/sell spreads will be higher so they can make money however reading on other forums it does not look like this is the case..

dellboy102

Surprised no ones used it here, if I go for it i'll let you know how I get on

Herbalus

The prevailing view on here is that buying singular shares is quite risky, and that the possibility of changing individual shares at a whim because of no cost can promote meddling which can drag on returns over the longer term.

eskbanker

If you use the search facility you'll find plenty of discussion about it, but at the risk of generalising, most investors on here use more mainstream platforms and perceive one marketed as free as inherently suspicious - they obviously have to make their money somewhere, and promoting CFDs is one area best avoided.  Also worth considering how sustainable their model is....

cloud_dog

To support their zero commission model they do not execute live trades, trades are bundled and traded in as efficient a manner for their transactions, so you cannot guarantee the trade price.  They also have the ability to load the bid/offer spread/prices; it is in their T&Cs but it it a little unclear if they do or do not apply it for stock trading, or if they do to what degree (%) do they load the prices.

Bottom line for me is that whist the advertisement shouts free trades, their charging structure is opaque to say the least.

Thrugelmir

Trading 212 also generate income by lending investors shares held. 

Alexland

Thrugelmir said:

Trading 212 also generate income by lending investors shares held. 

To be fair many fund managers do that too but they share the benefits. BlackRock claim their lending programme started in 1981 and have since had only 3 defaults for which the losses were entirely covered by the collateral. No idea if T212 are as careful with their lending.

dellboy102

Thank you all for the replies, it does echo similar concerns i've had, at the moment i'm mainly in funds and index funds on iWeb, there is a small portion of my account which I use to buy and sell individual shares on the understanding it is a lot more risky however this is always limited to 15% or less of my portfolio.

Thrugelmir

Alexland said:

Thrugelmir said:

Trading 212 also generate income by lending investors shares held. 

To be fair many fund managers do that too but they share the benefits. BlackRock claim their lending programme started in 1981 and have since had only 3 defaults for which the losses were entirely covered by the collateral. No idea if T212 are as careful with their lending.

Blackrock are a different scale though. Being the largest Asset Manager in the world. 

dellboy102

Just noticed under spread markup it says none so for now doesnt look like they do increase the spreads and make money this way.

cloud_dog

Thrugelmir said:

Alexland said:

Thrugelmir said:

Trading 212 also generate income by lending investors shares held. 

To be fair many fund managers do that too but they share the benefits. BlackRock claim their lending programme started in 1981 and have since had only 3 defaults for which the losses were entirely covered by the collateral. No idea if T212 are as careful with their lending.

Blackrock are a different scale though. Being the largest Asset Manager in the world. 

And T212 are still needing new capital so as to remain solvent/grow the business.  My memory isn't what it was but I think they had a new injection of cash earlier this year.  This is its own right is not unusual for young companies but 'life' has taught me that T212 are likely to be fine for 'dabbling' in the market but I'm not sure I would want to hold my ISAs with them.