Their aim is to democratise long-term investing, not trading. If anything I think the general public put far too little money into stock markets at present. There is lots more money in Cash ISAs than S&S ISAs for example, in spite of the pitiful or even negative rate of return at the moment.
2 Likes
I don’t think they’re doing anything wrong either. Their educational blog posts try to nudge people in the right direction as well.
We were just commenting on an inevitable consequence of their fee structure that has unfortunate downsides.
They can (and have plans to) do more to help people avoid making costly mistakes. I’m on the side of nannying people as much as possible. You can bet they’ll feel bitter and blame Freetrade if they lose all their life savings, in spite of Freetrade not offering advice and trying to gently steer them in the right direction.
1 Like
There are already superior platforms for long term investing, suitable for virtually everyone.
Freetrade doesn’t do anything new and “democratising” for the long term investor. The free trades democratise trading, while the fixed fee ISA is a barrier for those with little to invest long term (compared to other platforms).
I think freetrade’s main and most valuable contribution in terms of bringing long term investment to the masses is in merely existing as a modern platform with a cool app, able to get word of mouth out there that S&S investments are for everyone, and that it is easy.
This contribution is of a marketing nature though, not a platform features thing.
1 Like
If they have little to invest long term, do they need an isa?
No, they don’t. And yes, the free GIA is the best thing about Freetrade. (But Trading 212s is better)
I find it quite disappointing (and somewhat unethical) that Freetrade staff on their forums always ignore the numbers and circumstances and play up the fear, uncertainty and doubt by always suggesting people start with the ISA account.
I think Freetrade wish their GIA account didn’t exist at this point.
Been meaning to ask for months but do you work for Trading212?
1 Like
No, why would you think I do? Let me be clear that I wouldn’t recommend T212 to anyone because I wouldn’t trust them with a barge pole.
But that’s my personal opinion, and when I mention them I am only being objective and impartial. They categorically have a better fee structure than Freetrade.
I realised I was looking at the wrong FAQ page and deleted that particular reply.
Looking at the right one now, they do have minimums - e.g. Minimum of £10 for a buy order. Whereas with Freetrade when I have a few £ from dividends I can pick up a couple more TRIG shares.
You recommend them all the time by commenting on how good their fees are. If you don’t say that you wouldn’t use them due to reason x it really does look like a recommendation
2 Likes
Why do you say a company that you don’t trust has a better account? Also why don’t you trust them?
6 Likes
True, but that is only because three quarters of their customers lose money with them thanks to their core CFD product. Trading212 can use these funds to subsidise free investing. But how sustainable would that business model be if the state will further regulate CFD providers or even outlaw them? That is up for a longer discussion.
6 Likes
My personal opinion doesn’t change the facts of which account is better. As I noted above, the way you make money in the stock market is through investing in the right things and minimising your fees to do so.
T212 has no isa fees and offers free instant trades, while Freetrade does not. All the other stuff is pretty irrelevant.
(Instant trades are also irrelevant to the long term investor, but it’s still better because at least you won’t accidentally pay for an instant trade, as a number of Freetrade customers have done by accident due the “dark pattern” employed in the Freetrade app that they’ve never bothered to implement a trivial 5min fix for).
I don’t trust that T212 will keep offering the free accounts long term. But it’s feasible since they’re presumably in profit due to their other offerings (CFDs). I also don’t trust a company that offers CFDs, since I find those unethical. And they could use dark patterns and other techniques to nudge innocent isa users into CFDs.
Equally, someone could not trust Freetrade will be around for the long term because their ability to make money is questionable.
Full disclosure: I have money invested via Freetrade. I do not have money invested via T212.
I do not quite understand your point - you find T212 unethical, you believe they will make CFDs attractive to inexperienced investors (which may lead to significant losses), you do not use it yourself hence your opinion is far from objective and your only concern about Freetrade’s “dark patterns” is that a user will forget to change the order type and accidentally pay £1? I am of course biased towards Freetrade but I think your comparison and criticism are simply disproportionate.
1 Like
My point is there are reasons to mistrust any platform. The level of trust is determined by a customers own personal perspective.
Comparing accounts on their features and fee structures can be done objectively. So if a platform has a better account, certainly it should be considered. Then it’s up to the customer to balance the features and fees against the more intangible things.
The fact that Freetrade make the £1 instant order the default is a fair criticism. I have fallen foul of this myself, which was hugely annoying - I no longer make changes to orders after 3:40 because of this.
3 Likes
Having previously used Halifax Share Dealing for £12.50 per immediate trade, the occasional £1 fee doesn’t upset me hugely, but in any event I’m always cautious before I do a trade, and was only caught out by this right at the beginning of my Freetrade use.
I agree. Like if you were expelled from the Freetrade forums, that would definitely colour your perspective, wouldn’t it.
I disagree. I think low flat fees for the ISA is a welcome change, as is low or zero fees for investing. I will be moving my SIPP to them when they support that solely due to fees. I also think fractional shares will help a lot of people to get into investing (though they don’t offer that yet). Of course some other providers will offer better terms sometimes, and other providers will match the fees.
I wouldn’t want to give a company promoting CFDs any money for anything, so I wouldn’t say they are better, sorry, they are a very different thing and certainly not investing. From their home page, as mandated by the FCA: 76% of retail investor accounts lose money when trading CFDs with this provider..
4 Likes
You’re not giving them any money (potentially, I haven’t seen if their spreads are artificially high), so no problem there 
Yes and no. It depends on the future, someone may get a pay rise, new position, etc. That’s not always certain, the ISA limit isn’t always certain either, it’s not likely to go down but I don’t think there’s any rule saying it can’t go down.
I wouldn’t pay for an ISA wrapper though when it doesn’t make financial sense and there’s no reason to.
Subscriptions is where they plan to have their single largest revenue stream over the next few years. Quite Frankly they have little choice but to persuade people that they need an ISA and/or alpha account despite the fact that it makes very little sense for the vast majority of their current target audience.
2 Likes
I’ve not stated anything of the sort, Mr Defensive.