I think thereâs alot of sense youâre talking here dragos. It looks as though the problem is with how it has been communicated in the first place to even get to postpone it but also they would have far more intelligence in the way their system is preforming that just makes the relatively abrupt decision to increase the margin requirements for everyone quite astonishing.
Iâve seen that other cfd providers have also had to increase margin but it does seem as though they communicated it better to their clients.
I think your point about using cfdâs poorly is probably a good one but isnât that down to 212 to manage? There are alot of clients asking how to even work out the margin they will end up with.
I agree, alot of people need to educate themselves alot more before investing. Or at least try a fantasy account first.
My point about being down to trading 212 to manage was more about the fact they should have had a better handle on the margin requirements if they felt people were using their platform poorly and over exposing them as a company?
I know they trade to do that a little by targeting specific stocks that couldnât have a new cfd contract put in place but this all seemed to be very quick which just seems to have been able to be handled better from an outside perspective.
We wonât know exactly whatâs happening with them but I can tell this margin point might not at all have been helped by the other issues they had this week.
So, 212 increased the margin requirement from 20% to 50%, after market, which due to the short trading day on Friday left their customers only an hour to trade to correct their positions or add more funds? Then due to the uproar on their forums where itâs clear some of those customers have no idea how to calculate the new margin, they relent and give an extra day to trade/fund, but they are stand up guys and a good company?
Whereas FT going to the Plus model, which is based on simple buckets FTSE350/FTSE All Share, AIM 100/Aim All Share are just the worst and folk want to leave for 212? Good luck with that.
And thatâs leaving aside a number of people saying they canât even see a withdrawable balance on 212 far less actually remove their funds.
Ignoring cfdâs which freetrade imo shouldnât ever offer (at least in the way the industry is currently regulated), what features would you want to see in freetrade that would make you amalgamate your two portfolios?
Freetrade will keep any interest gained on available funds
25. Interest On Your Available Funds
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Your Available Funds will not attract any interest, even if they are in credit. You acknowledge that we may receive interest on all of our clientsâ funds held by our Custodians, and hereby waive your right to claim payment of any part of such interest.
Iâve always believed that T212 isnât the real competition - the real competition are the legacy platforms for investors (not traders) which provide long(er) term investing via ISAs and SIPPs. Thatâs the market I think Freetrade is going after.
Reading the T212 forum itâs a bit of an eye opener how many people are in for 000âs on CFDs and donât seem to fully understand them.
Even on the Invest side the GraniteShares 3x short Rolls Royce instrument where people got cleaned out totally appeared not to be understood by some investors.
I just went to double check the rates and it turns out it doesnât look like anyone is offering interest anymore. HL and Vanguard both used to, though it was basically the base rate this year. But I donât think it matters, I donât think anyone hold money in their account to gain interest over waiting to move on a position.
I suppose you could put it in a money market fund, I donât think there are any on Freetrade. Short term bonds maybe?
The risk of CFDs is just an excuse. The only risk is leverage. The only risk is CFDs are much more powerful than buying shares and if someone doesnât study, easily lose money.
Its more disappointing in how they handle the issue after it happen. And how their user base had no way to consistently reach them to discuss the concerning matter at hand. If they were a serious business in any way they would have set up the necessary steps in anticipation of dealing with the problem more effectively. Every company has some form of issue that arises over time. What I notice is 212 have normalised a low level of respect in how they treat their customers when it happens. Their customers donât even question them in a serious way either they just complain and everyone just forget about it. Their customer base fear of losing their free privileges will keep putting them at a disadvantage and issues like this to keep happening.
Being a heavy Freetrade user and a light 212 user I concur! However I cannot stop going back to Freetrade even though other platforms have more data points and content and features. Simplicity doesnât clutter the mind and following their ethos of not believing in day trading, I think their simplicity choice has so far been correct. The hard part is how to add further features without complicating the UI.
The way some other platforms offer customers the ability to buy their shares for free sounds like it will become more and more difficult in the future if they arenât a profitable enterprise. I honestly hope the other platforms sort themsleves out as I believe in the phrase âa rising tide raises all shipsâ.
Plus has been launched but freetrade have stated there are more features to come to make it a âno brainerâ and so I definitely agree at the moment it probably isnât worth it to a large amount of users, but it is useful even in its current form to some and hopefully alot more so in the future to many more.
Letâs not forget that an isa is free with plus too so youâre paying 7 pound for plus and if you had a sipp then thereâs an even greater saving for alot of people who pay an arm and a leg for theirs Sipps with other providers.
In my case even a cheap tracker sipp with no ability to trade your own shares elsewhere becomes more cost effective to be with freetrade when the portfolio is in excess of ÂŁ16k. Thatâs not counting those hundreds of thousands of people with Sipps that pay management charges and transaction charges for the privilege too.
I really think everyoneâs comments are valid, and their opinions too. Freetrade is growing, itâs a relatively young company that has completely created its whole eco system (with the exception of the US facilitator) but that has to be the best course of action at the moment, and proven to be quite effective during recent volatility.
However, someone pointed out the cost per trade consideration and i was looking at the numbers.
ÂŁ3/m for an ISA, which becomes cost effective reasonably quickly even when compared to Vanguard for example.
Get it with plus and youâre looking at ÂŁ3 for the ISA ÂŁ7 for plus, which yes lets be realistic is just access to most stocks. However if you make 7 trades that comes out to ÂŁ1 per trade which on the grand scheme of things is actually really good.
Add on a SIPP and plus is ÂŁ4/m if you consider the SIPP and ISA at full cost
That said, Vanguard is pretty cheap, and imo a Freetrade competitor at least for a subset of users. the extra cost for my consideration is not just the total fee (Vanguard is cheaper for a SIPP and ISA even up into the ÂŁ100k). But Freetrade open up a larger array of options. Now i can consider do i pay a little more for access to some trusts i would like my SIPP in? Or do i stick to VWRL in Vanguard?
Theres a threshold at which is becomes a good price, and thats going to be different for most people depending on what theyâre investing for and what their goals are.
Im heavily considering potentially moving my SIPP for the access to a much wider variety of securities even though at this time it would technically cost more to do so.
Definitely there are different thresholds for different people in different circumstances and so itâs important people do their own research.
In my case I was comparing an existing sipp I have with Pensionbee that is invested in one of their cheaper tracker funds and because I would be paying ÂŁ7 per month for freetrade sipp, I would be paying less in freetrade than my pension bee one at around 16k portfolio value thatâs charged at a %
Vanguard giving up on the factor funds makes Freetrade a much easier sell for me. The fact that a SIPP is the only tax-advantaged way to hold certain shares (ADRs)
I still believe that people should have multiple broker accounts, the chances of Freetrade, 212 and Degiro all missing a stock / having downtime / getting expensive is very low. I also think it would remove a lot of emotion around Freetrade missing stocks, although admittedly for ISA / SIPP itâs harder to diversify.
