An Honest Critique of FreeTrade

FreeTrade is a project I believe in, that’s why I joined the last round of funding. It starts with why: to make investing simple.

However, when it comes to features, FreeTrade severely lags behind its older and more mature competitor: Trading212. And looking at the roadmap, it doesn’t look like this will change anytime soon.

The reason people choose FreeTrade over Trading212 is less to do with any particular substantive thing FreeTrade can offer than Trading212 cannot, it’s more a feeling. Like an Apple fanatic will defend the Mac and the iPhone at length against Windows Computers and Samsungs with superior features, FreeTrade users will defend it against its competitors based on feeling - brand loyalty.

This is largely thanks to the ethos the team at FreeTrade follow, that has seeped into every element: from the name of the company to the UI to the support. Everything is about being simple and helpful.

To a complete outsider, Trading212 sounds like some sketchy 00s website. And when they join it, they will wonder: so is this for trading or investing? The UI on 212 feels oppressive and unfriendly when compared to FreeTrade. It definitely suffers from a lack of positive branding and connection with its userbase.

But it doesn’t lack in features.

Particularly, the new AutoInvest feature with Investment Pies puts 212 a country mile beyond FreeTrade in terms of functionality. And it challenges FreeTrade’s whole ethos: making investing simple. Because what is more simple then saying I want to invest 10% here, 5% here, 20% here, now do this for me automatically, thank you, I’ll check on you in a few years time.

The fact this isn’t on the roadmap for FreeTrade worries me more than anything else, in terms of FreeTrade’s ability to position itself as the dominant player in the UK stock broking market. Because this feature is not just a gimmick, it’s not a fun extra, it really is what the future is for the average investor. It’s easy to set up, it does almost everything for you and it makes investing fun.

I like to allocate my investments by % of my portfolio. To do this on FreeTrade requires a rather complex spreadsheet that turns my head in circles whenever I confront it (and I’m reasonably good at maths). For investors with less capital, thanks to a lack of fractional shares on UK stocks, the percentages simply never work out as planned, not even close.

FreeTrade is by far, the better brand. But, its platform still lacks. Particularly, the feature I mentioned above.

This thread mostly serves to highlight how adding this feature would closely match the FreeTrade ethos, whilst giving people no reason to move over to its competitor.

I strongly hope this feature is at least in the minds of the FreeTrade team.

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you read my mind…

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I think for many investors there’s actually a massive cost implication for picking Freetrade over 212 which is the massive FX costs, which could easily run into the £00s

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I haven’t seen an update on this feature, but consider not all features make it on the Roadmap, sometimes you hear about them in a podcast or interview e.g. there’s a benchmarking feature coming, so you can see if you’d be better off tracking against an index than picking your own stocks.

I know Adam was questioned about auto-invest during an AMA and hinted they would go a stage further than percentage allocations, they’ve clearly done some thinking on this but it’s hard to guess when something might land. They tend to build for the long term rather than rushing features out in the short term.

Trust and the brand are very important, this approach can’t easily be copied.

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Spot on, really - Freetrade has this community/cult following (which is testament to their brand) and I think thats why people tend to be quite loyal when it comes to them. I would just add that many people here are investors in FT so have a vested interest in seeing them succeed, which adds to their loyalty.

I say all this as a Freetrade fanboy who is now slowly having to move over to the competition; with the implementation of Plus, it’s currently just more cost-effective for me to be elsewhere.

Also, Just to add to your points on autoinvest/features:

Feature Freetrade Competitor
Web Platform :x: :white_check_mark:
European Stocks :x: :white_check_mark:
FX fee :x: (0.45%) :white_check_mark: (free)
Auto Invest :x: :white_check_mark:
Fractional UK & EU stocks :x: :white_check_mark:

I have faith that Freetrade will close the gap; the competition is basically out-spending FT and capitalising on their head start (having been in the sector for some time), and that won’t necessarily go on for ever.

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As an investor is have thought you’d have done some research in which case you’d have found plenty of references to ‘Autopilot’ … This is the exact feature you are describing… (auto investing) and has been mentioned by the FT team many times including by Adam… It’s not on the immediate roadmap but its pretty clear how important this feature would be

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Yeah I was in a Zoom call where it was hinted. There’s a difference between it being hinted as a distant possibility and it being on the roadmap and a priority. In my opinion, it should be. And hopefully this thread will serve to show that is a shared sentiment amongst the FreeTrade community. With any luck, we may get some updates on when this feature may come into play.

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Definitely, you’re right about the branding and it shouldn’t be rushed. We all saw what happened with RH pushing out features without proper consideration and testing. Trust is essential. Just hoping this feature can be put officially on the agenda. Even if it has to have a long Beta period. I’d be the first to sign up test it, at risk of a few errors.

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Some good points made here, the comparison with Apple and Google is very relevant. FT’s UX is very simple and user friendly, along with the nice branding which definitely draws people in I think this is a major reason FT has a loyal customer base even if other providers offer more features. I think we are all sticking with FT in the hope that eventually FT will catch up to other providers with features and possibly go further than them, given FT is still young it has a lot of room to grow.

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At 0.45% you’re looking at investing c.23k before FX costs start to hit £100. If people don’t want to pay for trades, FX costs, ISAs, Plus and so on ‘because T212’ how do they propose Freetrade make money and become viable in the long term?

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The auto-investing idea was also discussed quite a bit when Perry Blacher joined as a non-executive director (there’s a blog post about him).

Perry founded Covestor, one of the first robo-advisor companies, and still has a lot of interest and optimism for auto-investing.

I don’t really have a problem with the roadmap not being 100% reflective. Anyone who has been here long enough will have seen that backfire on Freetrade. Basically feeding the competition with ideas. As an investor, I’d prefer they keep ideas under wraps until they’re almost ready, get some customers to test it briefly, fix any little issues, then release. As a customer, I’d love to know what’s coming and when for the next 5 years :stuck_out_tongue: .

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Spot on! I think Freetrade have found a really good balance and at the end of the day you can’t keep everyone happy.

I bet there would be more investors complaining if revenue targets were missed when the next investment deck is released than have an issue paying £10 for plus access…

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It’s 0.9% as eventually you have to sell the shares. For comparison, DEGIRO only charges 0.1% FX fee (0.2% for both buy and sell). If you buy shares in the US stock markets it’s something like 0.5£ or so trade fee, no stocks hidden behind a subscription. It’s already a better deal than FreeTrade. At the moment, ISA is the only thing that keeps me on FT. The moment DEGIRO supports ISA I’m moving to them.

A very articulate post.

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The auto invest pie should be priority for freetrade. It is absolutely magnificent offering. Please Freetrade get this feature ASAP

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Everybody on this forum could provide a cheaper alternative to their specific investing details. Judging by their 6 page fee schedule document DeGiro have found plenty of ways to subsidise that 0.1% FX rate …

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You might be waiting a while. People have been waiting for a DEGIRO ISA for over 5 years now.

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I stopped using Degiro when they told me they weren’t sure they could still offer any service after Brexit. Apparently, they have found a way, but this did not instill trust.

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Auto-invest (We’ve internally codenamed it Autopilot) is on the long-term roadmap still!

There are some significant technical hurdles we’d need to solve first though - UK fractionals, for example - and other priorities before those.

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Great news! Glad to hear it is on the agenda.