Freetrade S&S ISA - Bad Customer Service

matthewfifield

Freetrade Warnng! - Transfer Out Taking Months To Complete - Bad Customer Service

I wanted to share my ongoing bad experience with Freetrade, the share trading app company. The Freetrade customer service experience has been terrible. I have complained to Freetrade but there has been no meaningful communication regarding the matter, so I'm posting a warning to all MSE users.

It all started off so well. I started a S&S ISA using the Freetrade app in May 2021. The app is well-designed and easy to use. So far, so good.

Over the following years I built up a simple and modest diversified investment portfolio of stocks and bonds via Vanguard VWRP and VAGP fund ETFs. When I opened the account in May 2021, Freetrade platform fees were £3 per calendar month. I was a happy customer. Then it all started to go wrong.

The Freetrade platform fees for a S&S ISA account have now doubled to £6 per calendar month for the same level of service. This makes the platform very expensive when the portfolio size is relatively small.

Transfer Out - Very Long Delays

The Freetrade platform fees are now twice as expensive, given the amount I invested using my S&S ISA. I needed to transfer my S&S ISA to another platform to reduce my investment costs to help boost my investment returns. I opened an S&S ISA account with Vanguard and on April 4th 2023 I instructed Vanguard to initiate a Transfer Out from my Freetrade S&S ISA account to my new Vanguard S&S ISA account. A simple request which should be easy for Vanguard and Freetrade to execute. Or so I thought.

I read on the Freetrade app customer services "Contact us" area that a Transfer Out can take up to 6 weeks. So I waited. And waited. And waited. Six weeks went by but nothing happened. No messages were sent to me from Freetrade or Vanguard to indicate any progress with the Transfer Out.

On 9th June, two months after instructing Vanguard to initiate the Transfer Out, I asked Vanguard for an update on progress and complained about the lack of communication on the matter.

Vanguard immediately investigated the matter and on 9th June 2023 they replied and confirmed as follows:

"We submitted your transfer request to Freetrade through our electronic transfer system, Origo, on the 05/04/23. We have not received a reply from them to proceed with the next steps of the transfer.

I have now arranged for our transfers team to chase your current provider and re-submit the transfer request if necessary. Please be assured, we will actively monitor your case and provide you with updates where possible."

The problem was with Freetrade.

Their "Contact us" chat system is awful. I have tried to report the problem with my Transfer Out many times with little or no reply following each attempt. There appears to be multiple chat conversation threads but they are not being actively managed by anyone. Most replies are automated "chat bot" responses which just give the same stock answers over and over such as this less than helpful reply:

"Transfers out typically take 2-4 weeks for cash and up to 6 weeks for investments (tocks and ETFs)."

Poor Customer Service

When you leave a chat message (no live online chat with customer services is available) the useless "chat bot" just keeps replying with the same message:

"Sorry we weren't able to answer your query immediately.

A member of the team will review this and get back to you within 2-3 working days."

Very few replies have been provided despite my sustained efforts.

I had an urgent need to Transfer my S&S ISA to Vanguard so I could manage my investments in one place and sell assets to help repay a fixed-rate mortgage that was coming to an end of the fixed rate. 

The delays with the S&S ISA created a real problem with my personal finances. I did not want to sell any assets on the Freetrade platform while the Transfer Out was being processed but I had no way of knowing when the transfer would happen. Yet I urgently needed to sell some shares to help pay off my remaining mortgage.

No updates from Freetrade, no timescales, no useful information to help me plan what to do with my mortgage.

To avoid going overdrawn I was forced to risk interfering with the ongoing Transfer Out process and sold some of my shares from my Freetrade S&S ISA account. The sell order was processed by Freetrade and the money was shown in my Freetrade cash account. I withdrew the cash from my Freetrade cash account to transfer it to my bank current account on 15th June 2023. At the time of writing this post I am still waiting for the cash to arrive in my bank account! It's so frustrating that I can't get my money.

Platform Fees Doubled

Not only has Freetrade hiked up their monthly fees to double what it was in 2021, not only have they completely screwed up my Transfer Out but they have also charged me £4.99 for April, £5.99 for May and £5.99 for June for their awful service.

Where's My Money Gone?

Freetrade have also rubbed sale into the wound by holding my cash for several days to make a tidy profit in interest, while it is "transferred" from my Freetrade cash account to my bank account. Freetrade say it takes up to 5 working days to transfer. Why so long? When I transferred money from my bank account to Freetrade the money moved instantly. Why does it take five days to move my cash from Freetrade to my bank account? Five days of interest paid to Freetrade on my money, that's interest that customer get no share of, that's why!

I do not get any of the interest Freetrade earn on my money during transfers to my bank account, I do not get a decent customer service experience. I have to pay £6 per month for this so called "service" and I have the stress of trying to pay off a mortgage while being prevented from accessing my assets and cash.

The delays and bad customer services are costing me time and money.

I expect that this poor customer experience is being duplicated many many times over with other people and impacting many other Freetrade users. 

Warning - Steer Clear

This is a warning to all MSE users who may be thinking of using Freetrade. My advice is STEER CLEAR!

I now use InvestEngine and Vanguard investment platforms instead of Freetrade. In comparison, for my use, Freetrade is expensive and offers very poor customer service when you need support.

It's such as shame because it all started off so well. The app is great but customer support sucks.

masonic

Are you trying to transfer the investments (in specie) or liquidating and transferring as cash? The former often takes weeks to complete (up to 12 weeks in my experience), but the latter is usually completed much faster, but means time out of the market.

If you haven't made a formal complaint to Freetrade, then it would be worth doing so now. It would be reasonable to request that they stop charging their service fee and perhaps refund the last couple of months.

When you sell investments, the trade is usually done on a T+2 settlement basis, the money would only be available for withdrawal at that point. A number of brokers use old-style BACS transfers to process withdrawals with a 3 day clearing cycle. That would add up to 5 working days, or are you saying it takes 5 working days after settlement?