MSE misleading on Trading212 ISA

Bastiat

MSE claims that Trading212 is "offering a loss-leading high-rate cash ISA" to attract customers when in reality all Trading212 does is stick your money in a money market fund, something you could have easily done yourself on any other platform to earn SONIA. This makes me seriously doubt MSE expertise and reporting on financial matters.

slinger2

See: https://www.trading212.com/legal-documentation/uk/isa/ISA-Terms_EN.pdf

Section 5.2 says "We will hold your Cash ISA cash in segregated Regular Bank Deposits and Term Deposits with banks, as detailed in our Invest Terms. For the avoidance of doubt, we will not use QMMFs to hold money that you have contributed to your Cash ISA."

nedwilsher

I agree MSE's portrayal of Trading212 is misleading. It's under the "Easy Access ISA - what we'd go for" banner; but for me Easy Access means I can access my money "easily". Yet, Trading 212 makes you wait 3 business days for funds to reach your account. Trading 212 says you can withdraw at anytime - no you can't. It is not until you withdraw that they tell you that you have to wait 3 business days! So, if you apply to withdraw on Good Friday for your Easter holiday it will take 6 days to arrive because of the long bank holiday. By contrast, Zopa and Chip pay instantly.
I also feel quite uncomfortable about the Trading 212 security set up. If I open Trading 212 on my browser it goes straight into my account without login and password!
It might be what Martin Lewis "would go for" but I'm withdrawing all funds and business from Trading 212 so that I can sleep at night!
And, finally, I'd strongly suggest MSE get its lawyers to look at its sloppy "what we'd go for" wording as that, to me, sounds like giving financial advice. Yeah, I know there is a small print disclaimer at the bottom of the page - but how water-tight is that?

masonic

Is this true of the cash ISA? Do you therefore lose 3 working days interest like in the days before faster payments.

The 3 business days for the S&S ISA would be to allow for sale and settlement of investments and is unavoidable.

nedwilsher

Yes, I think you do lose 3 days interest. The money has left my Trading 212 account but not yet landed in my nominated linked account.I have received an email with a login link saying its on its way (but could take 3 buisness days). The email has a link that opens my browser and goes straight to my account without any login. It seems to use a Trading 212 cookie (I requested essential cookies only - auto log in is NOT essentail). If you log out correctly I think the cookie goes away; but there is no log out button - well there is, but you have to hunt for it. Anyway - it's nasty and, in my opionion, insecure.
Goodbye Trading 212 - it's not one I'd go for.

kimwp

I'm not keen on the fact that it doesn't automatically log out either, also couldn't find the log out button for ages. If it wasn't using up part of my ISA allowance, I'd probably move my money out of it.

nedwilsher

I also worry about Trading 212s pause on accepting ISA transfers which is due, I believe, to high volumes. What happens if there is a max exodus when another ISA provider beats the Trading 212 rate? Will they be able to cope with the high volume? How much would you potentially lose?
Of course, everything could be fine and many will give a 5 star rating. I do hope that is the case for their sake. On a £20k ISA you'll get £20 more in a year over a Chip ISA. Still not happy? Then think about an ISA transfer out of Trading 212 to another provider to retain your ISA allowance.

gravel_2

Transfers appear to be open again.

dlevene

nedwilsher said:

On a £20k ISA you'll get £20 more in a year over a Chip ISA.

Not including the £200 I'll get from the 1% deposit cashback.

Or the £60 (so far) of free shares from referrals. Or the increase in value of those shares.

Just for me, personally, I'm finding some of these criticisms rather silly. "Easy access" does not mean, and has never meant, "instant access". "'What we'd go for' is inappropriate because I'm not interested!" - really? Is having to manually log out such a hardship?

Horses for courses but I'm extremely happy. Each to their own.

gravel_2

Since it featured on the home page and then the newsletter there has been a rash of moaners unhappy with the promotion of T212. It is hard to know if these are simply people who do not understand the product, don't like the product, or have something in general against investment products.

It's also worth noting that the MSE T212 link comes with probably the lengthiest caveats/explainers I've seen on this site. It should be clear to the average user that this is not a "normal" ISA and may not be suitable for everyone. FSCS protection is there but slightly more complicated than just being a customer at a bank. Nowhere is it listed as an instant access ISA and so on:

"Trading 212 is predominantly an investment platform – and its new 5.2% cash ISA* is clearly a loss-leading means of building a customer base for the investment side of the business. While there’s nothing wrong with this (it’s a regular cash ISA and your savings won’t be invested), it’s important to not be drawn in to opening other Trading 212 products without understanding what you’re doing. Investing comes with risk, as the value of your investment can go down as well as up.

If you just want the savings product, ensure you click ‘Trading 212 Cash ISA’  when you go to open the account. It offers a few different accounts, including a stocks and shares ISA, which is a very different product (and which we highlight in our stocks and shares ISA page).

About FSCS protection for this account

The cash ISA has full FSCS protection up to £85,000, however as Trading 212 isn’t a bank, it works slightly differently. When you deposit money, the funds are held in a ‘client money account’, separate from Trading 212’s own money. Trading 212 currently holds these with Barclays, NatWest and JP Morgan – this means YOUR money could be with one (or more) of these banks. These are all fully regulated UK banks and are therefore covered by the FSCS.

If you've existing savings with any of them, the FSCS only covers up to £85,000 per person, per financial institution – in other words, the total protection for all accounts held with a particular bank is capped at £85,000.

Just note that if you have significant savings with one or more of the above banks (or Chase which is owned by JP Morgan, or Ulster Bank which is owned by NatWest Group), you could be exceeding the £85,000 protection limit – and your savings could be at risk if your bank goes bust." 

masonic

nedwilsher said:

Yes, I think you do lose 3 days interest. The money has left my Trading 212 account but not yet landed in my nominated linked account.I have received an email with a login link saying its on its way (but could take 3 buisness days). The email has a link that opens my browser and goes straight to my account without any login. It seems to use a Trading 212 cookie (I requested essential cookies only - auto log in is NOT essentail). If you log out correctly I think the cookie goes away; but there is no log out button - well there is, but you have to hunt for it. Anyway - it's nasty and, in my opionion, insecure.
Goodbye Trading 212 - it's not one I'd go for.

Do report back when the money arrives. It would be very odd for a newish company offering savings products to be using the BACS system for outgoing payments.