Stocks and Shares pot

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 :wink: 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.

1 Like

I agree that there are people who will never want to trade but the problem with a simplified product and no knowledge is that when people see the amount they’ve saved has reduced (which it will at some stage, even just for a few weeks in a blip) they’ll panic and withdraw their money. Then they’ll say what a crap product it is.
I’d like to see some kind of integration but I’m not sure if it would be in Freetrade’s best interests at this stage

1 Like

I think you’d have to brand it heavily as Long Term Saving and make that bit of it at least very very clear with advice not to save for less than say 5 years. That’s the risk you take for a far better return (and it’s not a big deal IF you are saving long term). Education is definitely a problem to be overcome though if you choose to target beginner investors but there are a lot of people out there who could benefit from this and know nothing about stock markets.


But there are already robo advisors so why change to try and fill a gap that doesn’t exist?
Freetrade are new but they’ll grow and will become known. The lack of fees is a huge advantage. Most people won’t need an ISA but I thought their proposed pricing was very good? Not something I’ve researched much though

Personally I’m not keen on the current roboadvisors or funds, they charge % fees, which is awful for long term saving. To me that’s the gap - transparent low cost saving into your choice of ETF, not obfuscated saving products which charge % fees, which is a killer for growth in the long term.

A nice flat low fee like free trade with a choice of a few global ETFs would be far better for people starting out, and would be an introduction to more complex trading later via the freetrade app (if they wish).

1 Like

Here’s what Adam, Freetrade CEO, said:

We’re anti-intermediation at Freetrade. Intermediaries, or middle-men, just drive up the price for the end customers. The fintech ‘marketplaces’, aggregators and the like are simply intermediaries that need to get paid (or disappear).

We’d love to partner with a company like Monzo, to offer a Freetrade pot, for example. But we wouldn’t pay for it.

The interesting point is about the assumption that Monzo would require a fee. They’re not in this for charity, but it’d be interesting to unpack this a bit more and see what would be mutually beneficial.

I wrote a bit about platforms and this exact case. This is what I had to say - I think it still stands:

Why would Freetrade sign up to the Monzo marketplace if they were asked to pay referral fees? They have their own app, so what’s in it for them?

The answer (I think) is threefold:

  1. At scale, a platform would connect more customers and suppliers than would otherwise find each other natively. This would have the effect of growing the market for everyone and giving Freetrade a broader ready-made market.
  2. If Monzo were able and willing to provide identity services – by which I mean somehow pass to Freetrade the identity checks that were carried out when you joined Monzo, then both the cost to Free trade and barriers to entry for the user would be reduced.
  3. Not relevant to Freetrade perhaps (a share trading app is likely to be sophisticated if hopefully not complex), but the platform could potentially evolve to providing the user interface for some standard types of account – or provide a simple way for third parties to run apps within the app (think of Farmville on Facebook). This opens the potential for the financial services market to reconfigure itself – imagine a smaller savings and mortgage provider deciding not to spend money on their own app (why would they when there are companies like Monzo that could do it for them?) focusing instead on their core business and competitive rates.

But what about that pesky referrals fee point? I think, oddly, money is a red herring. Scale is everything when it comes to platforms. Platforms need to grow – and grow fast. While Monzo might need referral fees in the short term to break even, the Freetrade comment is instructive – a different model might be needed to bring as many folk onto the platform as smoothly and as quickly as possible. These things only work when they’re big!


Adam’s comments were back in May so maybe they’ve given it more thought since the launch.
Might be better to raise this on the Freetrade forum as it’s not so much about integration but creating an entirely new product

1 Like

I think they’ve probably got more than enough to be getting on with for the short to medium term, though.

When they’re on their growth phase (like Monzo is now) it would be worthwhile partnering with Monzo, I think. The interesting part there will be the commercial agreement. Monzo needs more companies on board to prove the concept and get momentum; Freetrade will want customer acquisition. The key will be a fee to Monzo that is less than they would pay by traditional means but which a) advances Monzo’s goals and b) drives Freetrade customer acquisition.

1 Like

Completely agree with everything you’ve said here @Peter_G , thanks for quoting that comment and linking to the article, bookmarked for later.

Exactly. With sufficient scale, Monzo will become too large to ignore and their marketplace could become a really powerful force, and yet they will not need to charge much per integration to make money, making them even more attractive to companies trying to get their product in front of a young audience with money to spend on financial products. So I think the marketplace idea is a very good one if they execute on growth. I also think with sufficient scale they’ll be able to disrupt the payments marketplace too and challenge incumbents like visa…

The key attraction of this idea to me for Freetrade is that they’ll want to expand into people who have traditionally shown no interest in stocks - they can attract those who are interested already easily enough directly to their app, but reeling in those who have money but see stocks as risky is harder and requires using other channels, not just the App Store.


If you click on the hyperlink I provided, the full comment reads as the following:

We’re anti-intermediation at Freetrade. Intermediaries, or middle-men, just drive up the price for the end customers. The fintech ‘marketplaces’, aggregators and the like are simply intermediaries that need to get paid (or disappear).

We’d love to partner with a company like Monzo, to offer a Freetrade pot, for example. But we wouldn’t pay for it.

There’s already an app store for financial services. It’s called the App Store. Your phone is the platform. It’s a swipe to move apps and see your investments in Freetrade. No need to try and cram everything into one app (:point_right: Revolut).

For some reason, @Peter_G omitted the part in bold :thinking:

Thanks for that. You’ll see Iinked to the original post - I just quoted the bit I thought was relevant. You have different views, obviously. That’s okay :slight_smile:

(Not too sure about the :thinking: emoji though. But hey, emoji away!)


With respect, I think the part in bold is the part which is dead wrong.

Nobody (to a good approximation of nobody) searches the App Store for financial apps, discovery and user retention on the App Store is terrible except for games, and freetrade are going to need significant effort in other channels to drive downloads. They’ve done well prior to launch by leveraging strategies like referrals outside the App Store. When someone else has gathered millions of users saving money in one app, that has lots of value.

They’re also going to need to drive adoption amongst people who currently have zero interest in stocks and investing if they want to really grow outside that niche. For now they can grow by stealing customers from the other offerings, at some point they’re going to have to grow the market past enthusiasts and into people who wouldn’t think of using an app to invest. The App Store is a pretty terrible way to do that (I have developed several apps on it for largish brands so am quite familiar).


It’s transparent to give a reader the full picture as much as possible so the emoji was used. Fair enough, point out what you think is relevant or not but be mindful not to overlook the whole message please.

I use Moneybox which invests in Stocks & Shares. It links to my bank accounts and rounds up my spending to the next £, which is then collected weekly by DD. I can also if I wish top up and boost the amount being invested.


To be honest, the “niche” which Freetrade is operating in is a massive one (£200bn+ market). Freetrade don’t need to gain customers outside the DIY investment platform market in order to be successful, but it is admirable that they want to and I’m convinced they will.

The thing that separates Freetrade from Monzo for me is that they have a revenue generating business model straight out the gate. Freetrade (will) have 3 revenue steady streams which you’ve already pointed out which at scale will be sufficiently profitable.

On that point of scale, Freetrade don’t need Monzo in order to scale and certainly don’t need to pay them a fee for the privilege. There’s latent demand for the Freetrade product just waiting to be untapped. The same way Marcus by GS snapped up 100,000 price-sensitive customers & over £2bn in savings in little over a month, Freetrade will do the same but in the investing space and at their own pace.


Clearly we disagree on the value of a marketplace listing, interesting to me also that Adam would like to be part of a Monzo marketplace, he just doesn’t want to pay for it :joy:

I see it as like a referral scheme - another good channel to boost growth and worth some low fee to participate.


We don’t disagree because I too would love to see Freetrade in the Marketplace; I just don’t see it as a necessity for their success.

1 Like

That’s exactly right. To (selectively) quote myself from earlier:

Monzo needs more companies on board to prove the concept and get momentum; Freetrade will want customer acquisition. The key will be a fee to Monzo that is less than they would pay by traditional means but which a) advances Monzo’s goals and b) drives Freetrade customer acquisition.

Adam (Freetrade CEO) - at the time of writing - seemed clearly in favour of a Monzo integration (“We’d love to partner with a company like Monzo, to offer a Freetrade pot”). But, also at the time of writing, seemed unwilling to pay for it (“But we wouldn’t pay for it”). My point is that if the cost of customer acquisition via a Monzo pot integration is less than via other methods (particularly organic growth via, for example, advertising), then one could make an argument that it would make commercial sense. And if Monzo provided other services (like KYC) then they could potentially lower Freetrade’s cost base, too.

But none of this is a necessity. I’d like to see it happen. I’ve set out that I think it could be beneficial for both organisations in the medium term. But ultimately only they will decide whether it’s worth the effort, risk and reward.

(Lest anyone take an issue with partial quotes, the bit I quoted from myself originally came from here. The post from Adam is here).

1 Like

Monzo should buy Freetrade. #freemergersandacquisitionsadvice

That would be seriously disappointing (to me). There are much more immediate needs for Monzo investment than this (in my opinion).