Has anyone used FreeTrade App for ISA portfolio?

kingdavid3 · 27 April 2019 at 2:45PM

I started using it just 2 months ago to buy a few stocks for my ISA account. I'm liking it better than my Hargreaves Lansdown account.

It's a lot cheaper, £1 for instant trades and zero-commission for basic trades.

bowlhead99 · 27 April 2019 at 3:49PM

To begin with the ISA account has been free but will soon have an account maintenance fee of £36 a year. But with transaction costs of zero or £1 and reasonable fx costs on US share trades, most people will find it pretty cheap to operate and easier to build a diversified portfolio of shares than if they were doing it through HL or other traditional broker paying £5-£12 per trade.

Personally it's not for me as I want to hold a wider variety of things in my ISA (funds, shares on different markets etc) but you can't argue with the cost of the service, especially if you want to do a high volume of trading. What you can say is that their current operating costs well exceed their revenues (they keep going back to crowdfunding to fuel their cash burn) and they need massive growth in their user base to be sustainable if they are charging hardly anything per customer.

Small fintech companies like this will make dents in the existing mainstream competition (like HL, AJ Bell etc) but they are very vulnerable to anyone else with deeper pockets for better tech and infrastructure coming along and grabbing their customers and all the other customers from the incumbents and actually becoming profitable first.

So with new potential competition from other groups looking to offer the same sort of thing in the UK (revolut, robinhood etc), it is a coin toss whether they will still be around in a couple of years and it may be a hassle to transfer your assets elsewhere when (ok, if) they run out of funding.

Alexland · 27 April 2019 at 9:05PM

They certainly have the marketing buzz but the fundamental problem with this proposition is that most people will achieve more by diversifying and trading as little as possible. For small ISAs you could pay less than £36 with a percentage 'ad valorem' platform and for large accounts you could go with Halifax Share Dealing who are only £12.50 ISA account fee and £2 per regular trade.

Alex

kingdavid3 · 28 April 2019 at 9:03AM

Imagine buying small amount of shares. Let's say 200 quid shares of TWTR on Hargreaves. That's 12 quid commission, I would be down 6% just on fees and not to mention the fx fees.

I'm fine with the £36 a year. I analysed my commission last year, it was £2-£3K. FreeTrade's proposition gives me the flexibility to adjust my portfolio without costing me an arm and leg.

sendu · 28 April 2019 at 9:32AM

For heavy traders such as yourself, Freetrade's free trades look good. But Trading 212's free instant trades are even better.

But for the majority of wise long term investors, there are cheaper options as already pointed out above.

The only thing Freetrade has going for it is it's pricing, and it's pricing isn't even the best in the market for any kind of user.

Jack2104 · 28 April 2019 at 10:43AM

Is great IMO, the war on high fees is good for the consumer.

However, I only use the Freetrade general investment account - which is free.

Although this is taxable, it is not really important as until your account is quite large you are not going to pay any tax anyway (dividend allowance, PSA, CGT allowance).

That said it doesn't take much for the ISA to become cheaper than other providers out there.

Is early doors for Freetrade, I think to compete it will need to offer funds as well at some point.

Would definitely recommend trying the free general account option

Dird · 31 May 2019 at 2:58PM

For infrequent traders you can have cheaper options with more funds available.

Outside an ISA it is good because you have no monthly fees (for now) but they have no USP vs Revolut or Robinhood when they launch and Revolut is a more known name in the UK + Robinhood will have angel investor money to make a decent dent. Don't see why they would win out right now against them especially when they introduce £3/month fee and Revolut/Robinhood will likely start with £0/month and they'll be forced to backtrack or die

Their marketing guy is a tool who controls their forum so it remains an echo chamber too

tavyabe · 29 June 2019 at 8:58PM

I have been using Freetrade and Trading 212 for the past month, I plan to write up a full comparison at some point, but here are the major differences on ISAs (non ISAs are the same, except they don't have ongoing fees):

Ongoing Fees

Freetrade (£3pm)
T212 (free)

Trading fees

Freetrade (free if you queue it up to execute at 4pm, £1 per trade for instant)
T212 (free. all trades are instant)

ETF selection

Freetrade has fewer, but a much better selection (for example some tech and robo ETFs)
T212 - while Trading 212 have more ETFs listed, it is very misleading as they won't actually let you trade most US ETFs, so the real choice is much more limited than it appears at first sight.

Stock Selection
Freetrade - has fewer stocks, but they are adding all the time.
T212 - has far more available, but don't seem to be adding very often.

Customer services

Freetrade - very quick responses, and the representatives are pretty knowledgable and helpful.
T212 - very quick at responding, but it feels like English isn't their first language and that they don't really understand any technical trading topics (for example my question about transferring ISAs in from other providers took about 6 emails to get a response that actually seemed to know what an ISA was!).

Sign up offers

Freetrade offer 1 free share for signing up via a referral link (random share worth up to £80)
T212 offer 1 free share for signing up via a referral link (random share up to £100)

Referral links to both platforms can be found at https://referral-links.uk

Summary
At the moment, Trading 212 has the better app and cheaper ISA (especially with the instant trading benefit, compared with £1 per instant trade on Freetrade). BUT, Freetrade is very new and improving fast. I'll add a link if I get round to doing a full write up / comparison of the two platforms.

I should probably add that Trading 212 make their money from their CFD trading platform - in my humble personal opinion, CFD trading is bad, and should be avoided at all cost!

System · 30 June 2019 at 10:34AM

kingdavid3 wrote: »

Imagine buying small amount of shares. Let's say 200 quid shares of TWTR on Hargreaves. That's 12 quid commission, I would be down 6% just on fees and not to mention the fx fees.

I'm fine with the £36 a year. I analysed my commission last year, it was £2-£3K. FreeTrade's proposition gives me the flexibility to adjust my portfolio without costing me an arm and leg.

This suggests to me a relatively small portfolio and that you are trading excessively. Buy a world index tracker or global IT tomorrow and hold it for the next 5-10 years. Your problem is your investment strategy (daytrade yourself into poverty) not your choice of brokers.

N1ckS · 9 July 2019 at 2:31PM

Now offering a free share or fund worth up to £200 for signing up via a referral and loading account with £1. Free share added to GIA.

Alexland · 9 July 2019 at 9:31PM

I signed up for a general non-ISA account on the free share offer and, to be fair to them, they offer diversified passive ETFs such as Vanguard All World VWRL and do not offer CFD or Options trading. As such it should be possible to use this platform for sensible investment purposes. Still its irritating they don't have a website (they say they may add this in future) and I would rather have my money with a more established and financially viable platform.

Alex

Has anyone used FreeTrade App for ISA portfolio?

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