I think itās pretty easyā¦ the question to ask is how that affects your ISA (assuming you used one). Probably one to bring up with the Freetrade team
I think itāll pretty simple (youād hope but will be), but as FT havenāt stated charging for it yet, I havenāt gone through the process so far.
Good point - theoretically youād pay an additional Ā£7 in the months where you had added plus?
Okay. Well itās not very clear that this is an option.
If one wanted to add AA plc then they would need to pay the full Ā£120 so if I add this as a 6th trade Iām still better off with a traditional broker.
Besides I think traditional custodian brokers are charging trading fees because there is a difference between a custodial share holding and the interest in stock provided on freetrade or any other micro trading app.
My point it from an investment point of view Iām not sure it looks good that freetrade charges more that trade 212 for having an isa or trading selected stocks as its branded as free trading.
Itās a shame because I really like the app itās nice and very user friendly but itās not worth the premium over others for those things.
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If and only if you buy your 6 companies in one trade for the entire year and donāt sell.
HSBC would be Ā£108 (assuming 6 U.K. stocks only as other fees apply for everything else). In which case yes. It is cheaper. Freetrade isnāt changing its pricing for such a niche use case.
Are you really suggesting you only make 6 trades a year?
And thatās with keeping the Plus subscription for the entire year rather than for one month. As we know Plus is Ā£10 per month - showing it is a monthly subscription (they havenāt men toned anything about yearly payment /discount yet, all we know is that it is Ā£10 for a month). So even in this niche example - it would be Ā£36 for the ISA plus Ā£7 extra for the month where the one trade of AA plc takes place.
I appreciate the defence but Iām not convinced that being a fanatic for defending the model is wise.
I know youāre all invested and I have too but a trading app doesnāt quite sit as comfortably as a regular outgoing as say entertainment. I sincerely hope this will work with the membership they have.
Iām looking at it from my perspective or people that I know, you could say: subscribe trade, unsubscribe then repeat when you want to change but thatās complicated and defeats the point of a micro trading platform. Iām just imaging how Iād explain that to my non tech savvy mom.
People are willing to pay higher premiums for traditional brokers because the assets have tangible value more than book value. Itās a shame than holding AA plc in an isa with the challenger has become more complicated than buying with your high street bank.
Generally I make a few trades but some are buy and hold. I just donāt know what the target market is here there are so many paid brokers and budget brokers that freetrade actually comes over as expensive. Perhaps small trading accounts should be free; if you have a large account and youāre making many trades then it has value but are people putting 10K+ into their ISA app at this time? I doubt it and with a 1K account the fees are 10% - crazy.
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If you only have 1k why would you want to use plus? Just stick with the free model, there are certainly enough shares to choose from to make money!
I do agree that Ā£10 is a bit steep and it sounds like most people on this forum agree.
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I agree with your first point though, and as Freetrade have expressly stated - the Plus wonāt be for everyone and indeed they intend for the majority of customers to stick with the free version as it should be fine for most peopleās needs. Plus is probably a little high for me until my portfolio gets a bit bigger but I personally see it as priced at the right point (especially when other competitors that donāt charge for virtually any features have signified their intention to monetise more features in the future).
If AA inc is a dealbreaker then that is a shame but FT have a pretty clear vision of a decent sized free universe that will cover many peopleās needs and an ever larger universe of everything else.
With the friends I have introduced who are much more casual and less pro-active investors than me, they would look at whatās available and then buy from that range. Iād suggest that on a Ā£1000 with standard stock names and tracker ETFs not many people will have to look a lot further than what is available for free as Sims says above. I may be totally wrong, but the 5/6 people Iāve referred before have always been after the standard things that are remaining in free.
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Iām not sure that itās fair to say that people who defend the model are āfanaticsā and are āunwiseā. Though maybe some people blindly support FT, surely some do just see logic in what they are trying to do and believe that the free version will still be a good offering.
I also disagree that traditional brokers have a more legitimate reason to charge higher premiums - your shares are just as safe with Newer brokers as they are with traditional ones. I used Lloyds for a few years but basically never made the moves I wanted to as with the couple of thousand pounds I had invested it was crazy to spend 12 pounds every time I wanted to buy more or sell some, plus paying a quarterly charge that seemed steep. FT (and other challengers) seem incredibly cheap at Ā£0 compared to what seemed extortionate before and was basically a stitch up with all the legacy brokers charging almost identical amounts per trade - not because they had to, but because they could.
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If T212 introduce fees then that would help the model for sure but as an investor I wasnāt anticipating this move at this stage of the apps life.
- currently all the people you referred will have more stock options and free trading elsewhere.
The selected stocks Iāve mentioned are just examples, to be able to go onto a free trading app and buy U.K. major stocks is essential IMO - but it looks like the competition in this space wins in this case. Yes people can limit their options but I use AA as an example because itās a huge company for the U.K. but not available for trading but I can open trade 212 and trade it in an isa for free. - this is where it becomes a brand issue for me.
I understand the company needs income but the price point is crazy, should have been 1/2 this to begin with but itās not my business. I just inherently know this probably wonāt work.
Even the people that are pro this premium exclusivity say buy premium then cancel after you buy the stocks; Thus making a small monthly trading fee - well thatās not gonna work for freetrade ltd.
I guess theyāre hoping of 50K members, 5K convert to bring in a monthly return but you have a real mixed bag of people using the platform, some will return to CFDs others will trade and some will cancel after making selected trades. I want it to work but a quarterly fee wouldāve been better. Currently itās great for high balances but not for low budget portfolios which was the point of the app.
With regards to it being as safe; the way I understand that the book value of your shares is protected with FCA but there are no underlying assets registered on your behalf with the company either direct or in custody.
There are some legal issues here, so with shares registered in your name they are an asset you can borrow against or leverage with your bank or broker. With a micro trading app my understanding is you have made selected stock on the platform the company then pays out as if you owned the physical shares for real. All of this nonsense about T212 holding shares on behalf of the client with IB is ridiculous and not true. It would be impossible for them to settle that many trades with them and be in profit. I donāt even think fractional shares are possible with a CREST account.
I hope so 
Do you mean you werenāt expecting Plus to be released yet? (FT have had Plus on the horizon since they launched and for many it is much later than originally expected). Or you arenāt expecting T212 to monetise some of what is currently free in their invest offering? (Freetrade doesnāt need to wait until their rivals make a move in order to reach timely implement their own vision for a sustainable freemium model). Or paywalling some stocks? (they did announce this intention in the spring).
Thatās true but they seem happy to use the app and current offering which are fine for their needs. Time will tell if enough people experience the free offering, and then go looking for something that offers them even more stocks, features, etcā¦
With regard to the last para about T212 "All of this nonsense about T212 holding shares on behalf of the client with IB is ridiculous and not true. It would be impossible for them to settle that many trades with them and be in profit. I donāt even think fractional shares are possible with a CREST account. - you completely lost me there and I have no idea what you are referring to - whatever it is that you are referring to, or think I said, I didnāt understand what you meant here.
Clearly you have a strong idea as to what would work but FT have their own thoughts on which way to go - it will be interesting to see how Plus progresses and how the new freemium model works. I personally think it is great for low budget portfolios - but admittedly my focus is on long term growth stocks and less on defensive stalwarts like AA who may well appeal to many more investors than I realise.
In the meantime Iāll bow out of this thread for now as itās less of a constructive discussion and becoming more a polarised tit for tat for/against the new Plus. (though a lot of the time I think the written word makes a lot of posting seem more combative than it can possibly be meant and certainly the majority of us on here all mean well, as I am sure you do).
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Of course, I wouldnāt bother posting if I didnāt want FT to be a success.
What I meant was I didnāt expect major stocks to be paid for, I know it was a subscription based company but when it was announced it will be the price of Netflix and mining stocks and other U.K. stocks would be removed from the GIA members I was shocked.
The other part was comparing these new micro trading apps to legacy platforms; just making the point i think thereās no assets held in custody by these companies they store your book value; Iām not sure how this would be paid in the event of a collapse. eg. You hold 1 Apple share, FT closes, FCA claim for book value would be at the point of the app shutting down and if the FCA would include any increases in asset value is what is in doubt. Whereas shares with Lloydās if Lloydās goes into administration are still registered to you and you can transfer them.
This is incorrect. Lloyds (Halifax) operate the same way Freetrade do. Investments are held by a nominee company with you retaining beneficial ownership of the investments.
(Worth noting that this setup does not stop you being able to transfer your shares in the event of administration)
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Iāve not seen a contract note from freetrade so didnāt know they hold the shares in custody. Are you absolutely sure about this as I didnāt think it possible to hold fractional shares etc.
How can instantly settled trades on a platform be held on your behalf? You think they have a deal with a broker to hold them?
With a nominee broker you can borrow against your asset value, if you can get someone to underwrite your FT assets then Iām very interested
āWhen you invest with Freetrade, any UK-listed stocks or ETFs that you buy are held in your name by Freetrade Nominees Limited, which holds stocks and ETFs , with you as the beneficial owner.ā
More info here: https://freetrade.io/security
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Along with @weenieās post you can check section 23 and 24 of the terms and conditions which go over this arrangement.
You might also want to read section 9 on risk warnings which cover some issues regarding fractional US shares
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The statement in its self is reassuring but I donāt believe it is possible to settle a trade as quickly as they do on the app. Perhaps they balance the books at the end of every night but it would cost FT more than they make to keep interacting with LSE. Without competent auditors though I have limited trust in the statement alone for these reasons.
@Eden - Precisely my point they must settle through FT or they are worth book value at best, nothing at worse.
When I get a statement I could take to an underwriter and secure a loan, then I will believe they are genuinely held like for like.
Iām of the option small trades are overlooked (until they reach a minimum order value aggregated across many accounts). If they are genuinely buying everyones Ā£2 investment in XXX and selling similar micro-transactions then I apologies but how comes to mind.