An Honest Critique of FreeTrade

Definitely there are different thresholds for different people in different circumstances and so it’s 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 £7 per month for freetrade sipp, I would be paying less in freetrade than my pension bee one at around 16k portfolio value that’s charged at a %

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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 it’s harder to diversify.

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Ah, that makes sense. Vanguard seems cheaper than, but as I mention im looking at what advantages i may gain from a more flexible set of investment options with Freetrade

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The ability to trade in whatever the hell I want is a big draw. It comes down to research but as it will be a sipp (my employer has my main one with RL) I will probably go with half of it in a cheap tracker and half on what I would consider long term investments that should do well over the next ten years. The fact I can chop and change as I see fit without penilty though will be huge

I agree with @Bruce. I’ve just started a 212 account (only with £150 to see how it works) and although I can see they have much more functionality, I do love the simplicity of Freetrade.

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Hey, they now offer interest for money held in your account uninvested (for plus users), just fyi. Brand new for Plus members — earn 3% interest on cash, up to £4,000 :plus_:

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What difference does it make to you?

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It proves their business model is sustainable. I know that client money and assets are held separately but it’d still be a massive headache if anything happened to the company. Now this is much less of a worry.

There are so many ways they could define ‘profitable’ that it’s meaningless.

It could be gross profit not net for starters…

Nope

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I mean, I don’t want to burst the additional sense of security bubble that their statement is seeking to provide, but, it was literally just a statement put out by 212 with words to the affect that they are profitable. As Richard points out, it’s not clear on what basis. Revolut are also masters at announcing ‘profitability’ when in fact it’s usually a short lived uptick driven by market externalities rather than the structural sustainability of their business model.

A quick scan of their latest accounts shows 2019 revenues were cut in half over the previous year, with a recorded operating loss of ~£300,000 (against previous year’s profit of £1.5m) negatively impacting equity, while liabilities have increased almost 20% on the previous year.

On the face of it those are metrics that are heading in the wrong direction, and while it’s reasonable to assume there has been some improvement over the last 10 or so months due to the bumper interest from retail clients, I’d probably want a bit more meat on the bone before taking too much comfort from unverified statements, such as, um hi, we’re profitable.

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Good points. I think you’re right not to take their statements at face value. For me FT is getting somewhat expensive and I’m willing to give 212 a go. I like FT as a company and product and hope they do well.

Also just FYI I didn’t remove my earlier post it was removed by an admin because I’m a 212 shill.

I presume you’ve only looked at their 2019 UK accounts and not their group accounts or Bulgaria accounts?

Remember to read the terms carefully so you understand what service your using :wink: You’re previous post was misinformed

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What can we take from these to statements? That the UK is becoming unprofitable. Are there plans to shift UK accout holders over to Bulgaria. Are the Bulgarian accounts profitable? You can open T212 accounts quite a few countries around the world. How significant is the UK market to them.

They are a Bulgarian company

  • Revenues halved from £4m to £2m
  • Reported operating loss for 2019

Material, as per audited accounts.

I have no idea but I wouldn’t take much comfort from accounts being transferred to Bulgaria.

They haven’t filed 2019 accounts for group… but 2018 shows considerable growth in revenue, profit and equity over the previous year. Revenue was almost entirely driven by the CFD product. I haven’t seen Bulgaria accounts. I would be interested to see group performance in light of CFD regs changes.

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Interesting???

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The biggest impact on t212 profitability I suspect is the change to charge 0.7% on deposits over £2k lifetime not done by bank transfer - that will have removed a considerable cost from their accounts.

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Agreed. Ultimately for those investing and not day trading too many new funds, it’s not a massive hardship. Even Freetrade don’t allow Apple Pay after the initial £1,000 so it makes sense.

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Remember to read the terms carefully so you understand what service your using :wink: You’re previous post was misinformed

Why not inform me then; what was I misinformed about and what are your sources?