Complex Investments - Buys restricted

Logged on to the app today to receive messages stating they consider some of my holdings to be complex investments and therefore unable to buy more, but can sell or continue to hold these until they introduce a knowledge check which will need to be passed before I can purchase any more.

Has anyone else had these? Keen to know thoughts and ideally a timeline of when said knowledge check will be introduced.

I understand the sentiment behind it, but becoming more disillusioned with FT as we go - this seems like a strange step to add without having any clear indication of when this will be resolved.

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This thread should not be closed as although its being discussed under many other individual stock threads it should be covered under one correctly named thread like this to gather all relevant info on this important topic. This issue seems to be affecting many many stocks and as yet freetrade haven’t released info. to its customers on the scale of stocks affected, instead dealing with each one individually. This is important as its spent the last several years telling us how large the investment universe is. Only fair to now tell us how much its been reduced especially when i see other threads saying some simple reits have been removed. Complex instruments are a standard part of trading and the thing missing here is the process to manage it, which i would hope will be prioritised. Plus the horse has bolted given many customers would already hold something they may now be deemed to be too high risk for their experience! I have requested more info. from freetrade so hopefully more information will come to light soon.

Btw - Looks like this may have come as a surprise to freetrade as the stock universe is still showing those that have been removed / now unable to buy.

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Thanks, keep me up to date with how you fare with gaining further info.

For me personally, BBGI Global and AEW UK REIT are affected. It would be interesting to hear what others have been impacted too.

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So far only apax global alpha for me but i have loads way more complex than some that others are posting as removed like SHED so im expecting more in the coming days / weeks as freetrade looks at the stocks it has on its platform.

I must admit I do find this a bit strange. I can’t buy more £VOF, yet freetrade has an inverse ETF on the platform, and is also looking to add Crypto support.

I’d suggest Crypto is far more risky than anything the regular (non leveraged/CFD) stocks and shares world could possible offer.

I’m totally confused.

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With respect, the crypto thing here is a red herring.

Freetrade will implement a “Risk appropriateness” procedure and then most of the stocks “turned off” will turn on again. The shares being marked out are not “standard shares”. I get it people don’t realise that and in some way emphasises why it is a good thing that the FCA wants this appropriateness check done.

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I understand some may not have been aware of the dangers, but personally I think the main issues though are:
1 - There must have been some awareness that this would need to be implemented, but there has been no communication around this until it was implemented
2 - It has been extremely vague around when this knowledge check will be available (I fear the word ‘soon’ being banded about here like it has for numerous other features)

I appreciate hands may be tied in terms of rules/regulations needing to be applied, but I don’t think it would have been a surprise or blindsided FT in this regard. If they were aware it was going to happen, surely preparation and communication could have been started prior to this having to happen?

I guess for me it all comes back to communication - @sampoullain @Viktor @adam @Gemhappe @Rajan07 - is there anything that can be shared re overall stocks this effects, when FT became aware of this needing to be applied and the expected timescale for the knowledge check being available?

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That’s a fair point, it is a good thing in a way, retail investors need to be warned about complex products, but it is coming late in the day.

I’d have thought this will affect only a relatively small number of securities, maybe a dozen or so.

It does strike me as odd though that trusts like VSL (specialty lending) and RECI (real estate credit) are not deemed complex products whereas a logistics Reit and Vietnam trust are. I suppose the latter two must hold some sort of complex alternative investments.

GRID is a weird one. It seems to trade on the LSE’s Specialist Fund Segment, which includes trusts that are inappropriate for most retail investors, yet there’s nothing stopping anyone buying it on FT.

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I agree re the endless “coming soon”. As we are being blocked from making new purchases in these investments I think this has to be a priority.

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Thankfully I moved VOF to my not FT SIPP in the nick off time. Does anyone have a complete list of affected stocks?

I had the same problem with VOF. Note how they have deleted my post/posts on the subject. As it’s an investment trust no different from the other Vietnam investment trusts then expect the same with them. A matter of time before they make you sell them

Perhaps someone could explain how a reit has been determined to be a complex product?

2 vietnam trusts, vof and veil, vof is rated complex veil isnt, vof is a dividend paying larger company fund, veil is a smaller company fund.

Apax is private equity and removed, hvpe, pin nbpe etc. are all private equity and still on.

Its all about communication, or lack off once again, plus there also appears to be a lack of consistency in the way this is being applied by freetrade.

This is not a new requirement, its been in place forever, just a surprise to freetrade it seems.

Happy to be corrected with facts.

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Bluefield Solar came up for me. No idea why it’s more complex than my other solar trusts, luckily i had only just started building it up, so i cashed it in and bought some more Hipgnosis, i can only imagine how peeved i would have been if i had several thousand in it.

Hopefully this isn’t a sign of things to come as i would really force me to start thinking things if the same happened to one of my main holdings.

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One thing I hope doesn’t happen is that we are forced to sell these shares. While £IAG is no longer available I hope people who bought that aren’t forced to sell that either.

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Impact Healthcare is the victim for me.

Freetrade has been an amazing platform for me. It allowed me to gain a foothold in investing over 2 years ago without been charged for every buy and sell when I used to be a bit too trigger happy at the start.

I had recently been looking to diversify with another broker and the HZM issue pushed me to make the jump seeing me start this year’s ISA allowance with HL. In Freetrades defence the HZM issue was somewhat out of their control although they seem to have dragged their feet in getting it resolved (still outstanding) opposed to other brokers.

The particular frustration around this complex instruments stance is that I spend a large amount of time carrying out DD. To then have Freetrade make decision on my behalf just doesn’t sit well. The lack of communication begs the question what other stocks may fall foul of this before checks/processes are introduced?

I agree there needs to be an element of protection for retail investors but without flexibility around this surely Freetrade are going to lose users who are either happy to take the risk or are comfortable using more complex instruments? Hopefully Freetrade are able to introduce some checks or a process fairly quickly so they can rollback on this decision, if not though maybe another broker is more suitable for me.

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This currently affects one of my investments, NB Global Monthly (NMBI) - annoying as
I’m still trying to build my holding but not the end of the world.

Let’s hope Freetrade get this sorted asap so buying can resume.

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Apax and Oakley for me which is a shame cause we specially had to request this last one to be added a couple of months ago. Agree the ‘customer experience’ hasn’t been handled properly here given this is a standard check that all brokers have to perform for this specific segment of the LSE so perhaps some pro-active communication would have been appreciated. In any case this is the situation now but hopefully we can get a simple certification form implemented asap especially as this is light touch standard process so shouldn’t be too much to have a small team working on that and implementing it imminently.

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This does need to be done on a case-by-case basis. With the Vietnam trusts, for example, VOF has more exotic holdings than VEIL. I think I’m right in saying it has a fair chunk in unquoted companies, so I wouldn’t be surprised if it held some sort of complex derivatives too.

It does feel a bit arbitrary though. With most brokers, I can buy the likes of SHED, IHR, BSIF and VOF without any checks. Maybe they’re wrong and FT’s right – who knows?

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Me too. I would prefer FreeTrade to be more open and transparent. It made me quite angry, to the extent that I was thinking about closing down my account. I’m personally affected with AEW UK REIT. I hope the staff and founders read all these messages, so they know what these kind of actions may incur. We are their customers, and without us, it would not exist. I know the financial markets are quite rocky right now, but being honest and open with their communication is a must.

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To be honest this has made me consider all my investments with Freetrade after several changes this year that upset customers with not the best comms for those effected. I actually dodged the bullet so far but have being doing research on a couple stocks of this latest issue and was about to buy in on one. What really bothers me is the withdrawal with no comms to everyone. I pay for SIPP + Plus and to find out I now am not able to buy these does make me want another long term provider but not 2 premium costs.

This is making me look at merging all my accounts into a more expensive single provider. To me, if they are happy to take money for Plus, they should allow me to buy more complex stocks and if not they should not take my money. It is literally the reason I pay the money to access the wider markets. Obviously if they need to ask something for regs that is fine.

And now that I am looking at other costs and working out the loss on 15% US tax for dividends long term, it kind of makes me think that could cover part of the costs at a more expensive trading site.

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