Trading 212

sarahTT

Hubby is (and sometimes I as well) a big user of Wise and we both have SS ISAs with AJBell. He does most of the investment footwork and he's now looked into T212. He thinks that they look a lot like Wise/AJBell combined in what they offer. Given that their fees seem much lower as well we're wondering what others make of them, esp if they have experience with Wise. Thanks for all comments!

sausage_time

I use Trading 212 for ISA (to hold US Stocks and cash).  I keep Wise for now for moving currencies around.  Right now I don't see any way to send US$ from the US into T212.  I also have iWeb for some other ISA holdings (some of which I moved from AJ Bell).

HowDoYouInvest

I'm trying to open up an ISA with them. It asks for passport, NI number, address and video of you turning your head! All O.K. I guess, to make sure you are you and check background. Going through details, webpages and links to my bank to transfer and ... 'page failed' Not sure if it's my internet or something, and bank mobile message says I've authorised a payment, but guess not got through (nothing on my bank or Trading 212 login) A lot of trouble compared with a 'normal' bank!

spreadsheeterapple

T212
Why are they top of the cash ISA leaderboard?
Zero cost trading; so how do they make their money?

possible Answer to q.1. to draw in funding and grow their business, for which their borrowing cost will be 5.17%, cheaper for them than commercial borrowing for a higher-risk business venture if that is what they would otherwise be assessed as by a commercial lender. Also a loss-leader as they surely hope clients will not just run cash ISAs but will also do stocks & shares trading.

possible Answer to q.2. their business lends out the stocks which clients buy through the platform, the stock borrowers doing so hoping to short the stock. You don't own the shares you buy, you're the beneficial owner of shares managed by the platform, hence they can lend 'your' shares. Look up short trading if you want to understand more of how that works. Basically shorters win in a falling market. Is there going to be a falling market? There's a fair bit of political and global trade turmoil going on, whether that might lead to more volatility in stock markets and/or failures of businesses which issued the shares you might have bought are questions for each investor to decide; same applies anyway whichever share trading platform is used.

My words don't count: always DYOR.

Aidanmc

spreadsheeterapple said:

T212
Why are they top of the cash ISA leaderboard?
Zero cost trading; so how do they make their money?

possible Answer to q.1. to draw in funding and grow their business, for which their borrowing cost will be 5.17%, cheaper for them than commercial borrowing for a higher-risk business venture if that is what they would otherwise be assessed as by a commercial lender. Also a loss-leader as they surely hope clients will not just run cash ISAs but will also do stocks & shares trading.

possible Answer to q.2. their business lends out the stocks which clients buy through the platform, the stock borrowers doing so hoping to short the stock. You don't own the shares you buy, you're the beneficial owner of shares managed by the platform, hence they can lend 'your' shares. Look up short trading if you want to understand more of how that works. Basically shorters win in a falling market. Is there going to be a falling market? There's a fair bit of political and global trade turmoil going on, whether that might lead to more volatility in stock markets and/or failures of businesses which issued the shares you might have bought are questions for each investor to decide; same applies anyway whichever share trading platform is used.

My words don't count: always DYOR.

I think you have to opt in to share lending on T212 if you want to use that feature.

wmb194

spreadsheeterapple said:

T212
Why are they top of the cash ISA leaderboard?
Zero cost trading; so how do they make their money?

possible Answer to q.1. to draw in funding and grow their business, for which their borrowing cost will be 5.17%, cheaper for them than commercial borrowing for a higher-risk business venture if that is what they would otherwise be assessed as by a commercial lender. Also a loss-leader as they surely hope clients will not just run cash ISAs but will also do stocks & shares trading.

possible Answer to q.2. their business lends out the stocks which clients buy through the platform, the stock borrowers doing so hoping to short the stock. You don't own the shares you buy, you're the beneficial owner of shares managed by the platform, hence they can lend 'your' shares. Look up short trading if you want to understand more of how that works. Basically shorters win in a falling market. Is there going to be a falling market? There's a fair bit of political and global trade turmoil going on, whether that might lead to more volatility in stock markets and/or failures of businesses which issued the shares you might have bought are questions for each investor to decide; same applies anyway whichever share trading platform is used.

My words don't count: always DYOR.

It makes most of its money from people gambling on CFDs. You can read about it in its annual reports on Companies House. It's quite a good business. It's looking to diversify into conventional stockbroking and at some point it may introduce a, 'freemium' model similar to Freetrade and CMC Invest's*. 

You don't have to lend your shares if you don't want to - only available with the Gia, not the Isa - and the returns from lending shares for shorting are for the most part extremely meagre anyway so that's not going to drive the business.

https://find-and-update.company-information.service.gov.uk/company/10014283/filing-history

*CMC Markets (LSE:CMCX) is another CFD provider that's looking to expand its stockbroking business through its CMC Invest app. Just this week it launched a cash Isa paying 4.85%. 

sarahTT

Thanks all! I think the trading bit is no big problem, as I assume they offer roughly similar services as do eg AJBell. It'll be interesting how they compare on the money moving side as we have relatives in CH and BE and regularly have to move money back and forth.

wmb194

sarahTT said:

Thanks all! I think the trading bit is no big problem, as I assume they offer roughly similar services as do eg AJBell. It'll be interesting how they compare on the money moving side as we have relatives in CH and BE and regularly have to move money back and forth.

A difference to AJB is that T212 doesn't offer OEICs.

What are you thinking, that they will be able to send money to your/your husband's T212 account and you to them? Not possible, it needs to come and go from accounts in your own name.

sarahTT

wmb194 said:

What are you thinking, that they will be able to send money to your/your husband's T212 account and you to them? Not possible, it needs to come and go from accounts in your own name.

Hm... I wasn't thinking much Hubby looked into their website and saw that they have a pretty low fee for money exchanges, eg between GBP and EUR... so he jumped to the conclusion that this works a little like Wise which we use to move money between currencies. But apparently it doesn't!
Confusion cleared and thanks a lot!

sausage_time

For transfers you may want to look at Zing.  It's a bit of a Wise clone (including the colour scheme!) owned by HSBC, and has some interesting offers from time to time.

nestle-elvis

HowDoYouInvest said:

I'm trying to open up an ISA with them. It asks for passport, NI number, address and video of you turning your head! All O.K. I guess, to make sure you are you and check background. Going through details, webpages and links to my bank to transfer and ... 'page failed' Not sure if it's my internet or something, and bank mobile message says I've authorised a payment, but guess not got through (nothing on my bank or Trading 212 login) A lot of trouble compared with a 'normal' bank!

Hi, I opened up an ISA with 212 Trading and went through all the security checks ect, then made a deposit without issues. I then did the same for my wife and all security was set up for her but she was unable to make a deposit. The problem was with the phone operating system which couldn't update our own banking app. This was resolved using a new phone ( bought weeks before but still in box.......don't ask why! ), which allowed updates on the banking apps which then allowed the deposit to be sent to 212 Trading.
It may seem like a lot of trouble to many but I'm quite pleased with the 212 Trading App and the daily interest notifications.