Fineco Bank pulling out of the UK

wmb194

Marchitiello said:

mikael said:

Lions_89 said:

N26 used the same excuse, in reality I suspect their UK business was not viable. Brexit may have threw a spanner in the works but it wasn't the fundamental cause. 

Triodos obtained a UK license. 

I have more sympathy with N26 as their decision was made much closer to the UK leaving the EU. In Fineco's case it really does seem like an excuse as their management would have known the ins and outs of the post-Brexit rules and if they knew they were too complex and expensive they would have have closed their UK operation down before making a big marketing push for their stocks and shares ISA offering over the last couple of years. I suspect they have just not been successful enough with their offering.

Sure, not successful enough to justify a full UK based operation, and they were likely starting from a Stronger customer base that N26 had on the 24th January 2020, but also the application process is likely not straight forward as expected initially, I believe Revolut applied for a UK banking license and it still chasing it years later… 

In recent years there have been a number of new banking licences issued e.g., Kroo, Chetwood Financial, Recognise Bank. Revolut seems to have specific issues. Another route to a banking licence is to buy an existing bank and there are quite a few small players in the UK that probably wouldn't be too expensive.

https://www.bankofengland.co.uk/-/media/boe/files/prudential-regulation/authorisations/which-firms-does-the-pra-regulate/2023/list-of-banks/banks-list-2302.pdf

For some context, Fineco's H1 2023 total revenues were €600m and of these the UK comprised just €1.9m. It's a shame to see it go but I'm not surprised.

https://images.finecobank.com/docs/pdf/pub/corporate/investors/2Q23-Results.pdf

FirstUser

Those revenue figures say it all really. But I would give it a twist: either F decisionmakers were pretty dumb, or pretty smart. It might have been a haphazard gamble to proceed with a hopeless post-Brexit launch of a project that senior manager were already too deeply committed to before the referendum. Boardrooms can be prone to sticking to half-baked initiatives for too long, as we have also just seen with Goldman Sachs's Marcus.

Or, it's a post-Brexit soft launch designed to hibernate until Labour come in and renegotiate. What makes me think that? I literally must have been the last customer signing up before their exit announcement, received the confirmation just hours before, and today been told my debit card is in the post. All this costs them money so it's either dumb bureaucracy, or a manifestation of what they indicated in the exit announcement: that it will be a slow winddown over some time, with no immediate effects on customers.

Will I sinkd money into their ISA now? Hell no. Will I continue using their fantastic Level 2 Orderbook data, the only free offering in the market? You bet  

wmb194

FirstUser said:

Those revenue figures say it all really. But I would give it a twist: either F decisionmakers were pretty dumb, or pretty smart. It might have been a haphazard gamble to proceed with a hopeless post-Brexit launch of a project that senior manager were already too deeply committed to before the referendum. Boardrooms can be prone to sticking to half-baked initiatives for too long, as we have also just seen with Goldman Sachs's Marcus.

Or, it's a post-Brexit soft launch designed to hibernate until Labour come in and renegotiate. What makes me think that? I literally must have been the last customer signing up before their exit announcement, received the confirmation just hours before, and today been told my debit card is in the post. All this costs them money so it's either dumb bureaucracy, or a manifestation of what they indicated in the exit announcement: that it will be a slow winddown over some time, with no immediate effects on customers.

Will I sinkd money into their ISA now? Hell no. Will I continue using their fantastic Level 2 Orderbook data, the only free offering in the market? You bet  

Yes, FinecoX is nice. I have it open now, actually. It'll be a shame when we cannot use it anymore.
 
It has to 'close' by the end of December, though, as this is when the passporting arrangement ("Temporary Permissions Regime") expires. What usually happens is that there is a date from which no more deposits can be accepted or financial securities purchased but then you're allowed to withdraw your deposits and transfer or sell your securities over subsequent months. Based on the notice on the FCA website below this could be what will happen but we need confirmation from Fineco:

"The FCA now expects any firms remaining in the TPR that do not have active applications for full UK authorisation to either apply to cancel their temporary permission or indicate that they expect to enter the UK’s Financial Services Contracts Regime (FSCR) to run-off any remaining UK business (if they are eligible)."  

https://www.fca.org.uk/brexit/temporary-permissions-regime-tpr

FirstUser

Very useful links, thanks  - so that's better than I would have expected, the FSCR allows a wind-down window of at least 5y for pre-existing contracts and up to 15y, so depending on how that will implement for Fineco that will stretch beyond the Brexit trade deal review in 2025, with a new government and new European Commission. 

Will be interesting to see whether 'no new contracts' after December will mean that the brokerage business will be the first to close, or whether that part of the business can continue under pre-existing account contracts. But lets hope pre-existing portfolio positions and certainly ISAs will continue to be serviced for more than five years given that not all instruments can easily transfer out to other brokers necessarily.

 

SouthLondonUser

Today I compared the GBP - EUR rates between Fineco and Wise:

converting £10,000 GBP to EUR, I get 0.13% less with Wise than with Fineco

converting €10,000 EUR to GBP: I get 0.25% less with Wise than with Fineco

I only got quotes, I didn't carry out the actual transactions.

Also, this is just a one-off test, I have not verified this over time and cannot be sure that it won' be different at different points in time.

So, basically, yes, Fineco is cheaper than Wise, but the difference is not huge and, for my limited needs, I think Wise will be fine. Of course everyone's situation will be different.

I am not a big fan of Revolut - the pricing seems messy, they charge more at weekends  and there are certain limits based on the type of account you have

Emily_Joy

I am a bit confused, to be honest. I cannot find anything on Fineco pages, i.e. uk.finecobank.com. I am currently using Fineco only for currency exchange and their card is handy in countries where Barclays rewards visa, for instance, does not work, such as Netherlands. Do the news mean that the bank cards will stop working and all accounts of UK residents will be closed?

PloughmansLunch

Emily_Joy said:

I am a bit confused, to be honest. I cannot find anything on Fineco pages, i.e. uk.finecobank.com. I am currently using Fineco only for currency exchange and their card is handy in countries where Barclays rewards visa, for instance, does not work, such as Netherlands. Do the news mean that the bank cards will stop working and all accounts of UK residents will be closed?

Emails from them were sent out on 15th Sept - maybe it went into a junk/spam folder?

There's also a text block that mentions it on the front page of uk.finecobank.com:

wmb194

Emily_Joy said:

I am a bit confused, to be honest. I cannot find anything on Fineco pages, i.e. uk.finecobank.com. I am currently using Fineco only for currency exchange and their card is handy in countries where Barclays rewards visa, for instance, does not work, such as Netherlands. Do the news mean that the bank cards will stop working and all accounts of UK residents will be closed?

Yup, it's toast. The details need to be confirmed by Fineco but its authorisation expires at the end of December 2023 so from January at the latest we shoudn't be able to deposit new funds. There should be a wind-down that'll still allow withdrawals and the transfer of investments out but I don't know whether this will include continuing to be able to use cards.

From the Q&A webpage:

"Fineco is committed to ensuring a smooth transition for all its clients during the wind-down process. In the short term, clients' accounts will remain fully functional with the same level of regulatory protections. Fineco will be in touch with clients over the next few months to discuss the account closure process, providing details about their rights and necessary actions to be taken."

https://cloud.mail.fineconews.com/closure

Emily_Joy

PloughmansLunch said:

Emails from them were sent out on 15th Sept - maybe it went into a junk/spam folder?

 You are of course correct. I was on business trip abroad and Fineco emails were far from my priorities.

FirstUser

So which other provider of Level 2 Order Book data is worth looking at to replace the free feed in FinecoX? The LSE only lists two CFD platforms alongside Fineco, only one of which appears to offer direct securities trading and charges pretty steeply for Level 2. There must be other DMA platforms with more affordable retail packages?