Well, that’s one of the attractions, however it is only for scheduled trades. At scale it would certainly be possible to allow micro purchases and charge no fees (by scheduling them all up at 4pm that day). The ISA £3 a month I feel would be a more significant hurdle for customers. I think an ISA would be best for clarity and because it would lend authority to the offering in the minds of those who don’t know the provider (free trade or other), however Freetrade do need to make money somehow - at present their model is a flat fee on things like ISAs, and a fee for immediate trades. That could be adjusted for a product like this to hide fees somewhat, but the money has to come from somewhere. Those are all minor details though where most could live with whatever choices were made. Not too important where the fee is charged if it is transparent and low.
I see that as more of a negotiating position than a definite no I do see why Freetrade want to pursue that approach and grow customers themselves right now, and also their hostility to a referral fees, given how abused these have been in financial products. I’m hoping they change their mind and perhaps there could be moderation on both sides (low ask from Monzo, flexibility from Freetrade). IMO it’d be good for both Monzo and Freetrade and would be a perfect fit for the Monzo marketplace because it brings customers who would never consider Freetrade otherwise.
There’s a huge market of people out there who will never want to trade, don’t know or care that their pension is invested in stocks, but DO want to earn more money than a paltry 1.5% a year interest on their savings. Those people don’t want to research stocks or learn jargon like ETFs, they just want to get a decent return which is reasonably safe over the long term. They are essentially never going to become customers of free trade except if offered a simpler product via their bank. Interesting figures here from the UK gov. on ISA subscriptions 40 million in cash (losing money in real terms), vs 30 million on stocks this year.
The perfect way for free trade to target those people is to offer an incredibly simple bundled product which hides the details of trading, and just says we’ll buy £100 of the USA for you every month, don’t sweat the details, very low fees and watch it grow over the years - would have to be branded as long term savings, but I think it’d be great for Monzo, Freetrade and customers.
But from Monzo’s point of view, this doesn’t have to be one integration/provider, they could offer a few different simplified S&S ISA offerings from different providers.