Freetrade: Free Share Trading

Think half leaving would be catastrophic, and hopefully worst case scenario.

Interestingly, one snippet from the InvestEngine 2023 pitch deck showed they’ve poached close to £10m AUA from Freetrade from price sensitive customers:

Positive note - shows how far Freetrade has come as a leading U.K. neobroker

Negative note - Freetrade shouldn’t be second on that list losing paying ISA customers to InvestEngine

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Very much a race to the bottom. For me to switch I could literally have the ISA for free at InvestEngine and people at Vangaurd are I assume also paying little with the 0.15% fee. Very interesting graph to see.

Would love to see this type of graph from a few more brokers, like where does HL get the majority of transfer from, does Trading 212 get the majority from Freetrade etc

Thanks for sharing

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Has anyone seen any more news about the situation at Freetrade? I saw a while back JPM were looking at them late last year and wasn’t Monzo also said to have had a look?

Strange also that we’re yet to see anything further on Monzo’s touted investment product.

Indeed. Their product manager did come on here a while back around the savings pot where it all got a little heated. I don’t think they came back for a bit after that. I too would be interested in this.

Regarding Freetrade, all rumour mill as far as I can see…saying much the same as you.

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The press reported (I’m paraphrasing) that Monzo took a look and passed on Freetrade. As presumably did JP Morgan.

I’m presuming both didn’t like what they saw under the bonnet - or Freetrade was holding on to what they saw was an overvaluation.

Monzo’s investment partner was also named in the media. If memory serves it was a start-up in which Monzo has taken an equity stake.

I’m hoping for news soon. It’s dragged on a bit.

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I’m working on the assumption that we didn’t scare them off to the point of delaying the investment product!

But I do hope that there’s a bit more care in the launch. The savings rate remains good, but the design in the app isn’t optimal and the knots they tied themselves in when trying to explain the Plus/Premium and savings pot interest rate wasn’t great. And I don’t want to reopen up the (ridiculous) single pot limitations and inability to schedule withdrawals etc.

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What thread is this?

I need to know which names to cross off my Christmas card list if we don’t get it before the year is out. I need somewhere to go post-Freetrade. Sooner the better, especially as I’ve heard rumblings that Revolut are set to expand their investments product beyond US stocks very soon.

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Likewise. And I recall the article you mention but can’t seem to find it.

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If they were scared off from by that thread then they really shouldn’t ever use the internet.

There’s a few people demanding/asking/questioning why it didn’t do everything instantly but nothing out of hand and only in the best Monzo interests, nothing bad.

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There’s a meetup in a couple of days: Community meetup - Meet the CTO May 2023 - Freetrade Chat 🔥 - Freetrade Community

I’d expect if there was anything to announce that might be a good point to do it.

From the horse’s mouth (CEO and Founder), the ambition remains to list on the LSE at some point this decade:

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Aren’t they running out of money this year (they were burning £1M/month)? How would they survive to any point this decade?

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They just had a community meet-up and are ahead of schedule to hit break-even. Their pivot to revenue enhancement and cost rationalisation, away from blind growth (blitzscaling), has definitely helped them to stay in business.

The plan was to break even Q1 2024, however Freetrade are still on track to beat this time scale. Q1 2023 was their best quarter yet and Q2 is expected to be even better.

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Hopefully, I’m wrong, but I don’t buy that. That’s why I left - can’t trust them with any amount of my money until they prove they can become a profitable company. So far - no indication, just promises that many of us, the early investors are sick of.

The app used to be in the top 20 finance apps on the App Store - now it’s gone, you can’t even find it because no one is downloading it. Last year they tried another funding round - but failed, that’s why they raised convertible debt. Then some more from retail investors (institutional won’t pour more money into a sinking ship). But those shots are fired now.
Then there were rumours of acquisition - nobody wanted to buy them, apparently, things aren’t looking good. On top of all T212 is open now for new customers again.

Not a great time to be a founder of a money-burning fintech.

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That’s your prerogative. I’m sure they factored into their models leavers and joiners for various scenarios. They’ve got little choice but to pivot to break-even, so little incentive in them lying about it especially as a private company anyway. We’ll see in 9 months how they’ve fared.

I mean every startup and their dog raised money via ASA’s last year; don’t know why Freetrade would be any different, they’re not immune to market downturns.

This is just pure speculation. Smart founders don’t sell at the bottom. Good on Adam Dodds and Viktor for navigating shark invested waters. It’s easy to criticise the men in the arena sitting on the sidelines.

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I like how you linked the slow process of transferring out an ISA, can always find examples of that anywhere, try a lot of the legacy brokers (obviously you might have had a good experience, some do and some don’t, but usually people share the worst)

Yep, that’s my speculation. The latest official data I saw was from the latest pitch deck. After that - just promises and expectations.

The inventive is that:

  1. Nobody freaks out that they’ve put their savings with a broker that may become insolvent soon - valid point
  2. Some ill-informed investor pours more money into them, or buys them - no need to become profitable then, it’s someone elses’s problem now.

I do hope they find a way to stay afloat. But it’s a risk I wouldn’t take with my money. That’s all.

FCA regulation and FSCS protection has that aspect covered for the majority of investors.

Freetrade updating their community in an in person forum to <100 of their customers (let’s face it mostly engaged crowdfunding customers) isn’t really as egregious as you think it is. They’ve not gone and pushed out a notification to their customers that they’re on track to break-even because quite frankly they don’t need to.

You seem to be on the conspiracy theorists side of mentality at worst and cynical at best, so do you and vote with your wallet.

Markets work in cycles and Freetrade being ahead of schedule to breakeven isn’t out of kilter with recent positive results from AJ Bell:

Everyone knows you are covered, but you would want to skip the recovery process altogether if you are a “conspiracy theorist” like me :grinning:

As you said, markets work in cycles - too many companies are born during the bull run, and too few survive the bear markets. Anyway, I agree with you that I might be too picky. Time will tell.

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I don’t know if the apps placement in the App Store is a key metric.

I had to scroll quite far on the main page to find the link to all categories to find the finance list, and then scroll again to find the top free app list. Hardly think most people looking at investing and such are doing that, nor are they going to the App Store first I imagine.

First I heard of FreeTrade was online not via the App Store. To me that’s not a huge issue