Freetrade removes fees for instant orders

I would have never thought the numbers on this would be sustainable.

2 Likes

If I were them I would have included that in Freetrade’s Paid account. I don’t see how this is going to work out as something they can keep and be profitable, while convincing people to go Premium

Well, we don’t yet know what is going to be in their new Premium offering.

They still have the ISA account but that’s not much and I suspect there may be a number of people who don’t use Freetrade for their ISA.

I think this means they now make £0 from me…

Its nice that I don’t have to pay to trade, but it’s a little confusing. I thought I understood the free trade business model, but clearly I do not.

I thought it was a typical ‘freemium’ offering, ‘get them into your ecosystem with a hope of upselling to instant trades or subscription accounts with more bells and whistles’.

They’ve been slow at launching their subscription offer (bar the ISA) and they’ve now dropped the instant trade fee - so how do they manage to do that?

1 Like

Perhaps they expect instant free trades will attract more people to their platform which means more people to sell their Premium account to, which I guess must be imminent.

1 Like

Taking at face value, switching to their own (serverless) platform has reduced costs enough that they won’t be losing money doing this… but they are still losing an income source. I guess with the competition, especially Robinhood, they did not have much choice. But you’re right, the ISA and FX fees aren’t going to be enough, so I’m guessing a lot rides on their Alpha account.

I think they’ll actually be fine to live off of FX fees when they get a bunch more stock markets signed up, tbh

The 0.45% FX fee is what their external partners are currently charging. It is not a revenue source for Freetrade.

I think they had to offer free instant orders because there’s no reason a “normal” (ie. non-fan) person would pick Freetrade over Trading212 if trade cost was an important factor.

Now I think that on balance you can unreservedly recommend Freetrade over T212 or any other competitor in the shares-only space.

Their only source of revenue is ISA fees.

4 Likes

Out of curiosity…
Of those on here who use Freetrade, what are your thoughts???

I’m looking for somewhere to possibly invest a small amount, in the hope of making a half decent return.

I am basically using it for just that and haven’t seen a reason to look elsewhere. , The things that are missing (such as a Web app) are on their road map.

They’ll soon be offering fractional shares on US and UK stocks, the latter of which I still think will be a unique feature. They’re still in the process of adding stocks, but it should speed up now they’re running it all on their own platform.

This ISA is a fixed fee so not worth it for small amounts (which should be under personal allowances), but by not being a percentage it becomes increasingly better value if you have more to invest.

2 Likes

I echo @yams thoughts. I love Freetrade, and while they don’t offer everything I want, the stuff that is missing is on their roadmap for the future. I haven’t really looked at any of the other players in the investments space beyond MoneyBox, but that’s mostly because I’m incredibly satisfied with Freetrade and have no plans nor a need to look elsewhere. I’m excited about Robinhood though, and they will most likely be the first Freetrade competitor I’ll try.

2 Likes

I really like Freetrade, a breath of fresh air when you compare to the typical trade fees, quarterly account fees, etc. charged by most of the big players.

1 Like

Except for unit trust and OEIC funds. I’d say lack of these is the biggest downside of Freetrade (and in my view perhaps the only significant one) and they have no intention of supporting them.

If interested in funds you’re limited to ETFs and Investment trusts.

2 Likes

Thanks guys. :+1:

I don’t know an awful lot about stocks and shares, I must admit.
Plus with the amount of money I plan on putting in, I’ll only be basically playing at it lol.

But from what I can see, it looks like the perfect place to introduce myself to the world of stocks and shares without costing a lot of money :grin:

3 Likes

What are peoples thoughts on Trading 212? I was having a look and I prefer the app to FreeTrade (and it has a website) as it gives you much more info on the different stocks and the markets. It also seems better value too (free ISA, no FX). I’m thinking of leaving FreeTrade (well, not withdrawing as I’m so down at the moment), and switching to a S&S ISA with T212 for me new investments.

Also, don’t want to spam with referral links but they do the Free Share thing too.

Aren’t they a CFD broker? Not actual stocks and shares

I think that’s how they started but the cfd is now separate from their invest and ISA accounts.