Full plus subscriber; fees covered by interest on cash.
Just a slightly off topic comment but Freetrade got me back into investing after a circa 25 year hiatus. At 18 back in the mid nineties, I used to trade the old school way. Pop into HSBC in my lunch break, check prices on Ceefax, then sit around waiting for an adviser to place a trade over the phone. Share certificate landed in the post about a month later. Back then, I paid a flat Ā£20 per buy or sell, plus percentage commission and stamp duty. My trades were between Ā£500 and Ā£1000 a time so the erosion from fees was substantial.
No need to change the pricing. I used to use Interactive Invester. 9.99 a month, 1 free trade and a free ISA. All other trades were 7.99. A SIPP was extra. Why is FT not good value? Same monthly fee, but now effectively, I still get a free ISA, but now unlimited free trades and a free SIPPā¦
This ship has long sailed but I do have some sympathy with the opening posterās point.
For those with relatively small sums to invest, FT can be comparatively expensive due to the flat fee. As with Ā£12 commissions, those with the least to invest pay the most on a percentage basis.
For anyone with less than about Ā£15k to invest, itās actually cheaper to buy an index fund through Hargreaves Lansdown, which is thought of as the most expensive broker.
However, as @Jim_mcgrain says, no brokerās going to please everyone with its pricing plan.
Itās cheaper to buy an ETF through FT than an Index fund through HL.
Bottom line, if you have a really low pot then you may well be better off (at least when it comes to fees) sticking to ETFs or a few larger cap stocks. I donāt think that is contradictory with the mission to allow access to the stock market to everyone.
I certainly wish Iād had it 10/15 years ago when I thought the only option was picking random stocks at Ā£15 a trade.
It depends how much youāre investing. For example, Ā£10k worth of an ETF will cost you Ā£60-120
a year with FT, whereas an equivalent fund would be Ā£45 with HL or Ā£15 with VG.
You could use a FT GIA for Ā£0 but most will want to use a tax shelter, especially given that capital gains and dividend allowances are being slashed.
True but you donāt need the tax shelter (yet) if youāve got a small pot (or indeed a Ā£10k pot).
Anyway, I agree what youāre saying, FreeTrade isnāt always going to be the cheapest for every person.
You have to see Ā£4.99 as a fix price and not a a percentage of your portfolio.
So if your portfolio is 100Ā£ then Ā£4.99 is 4.99%. However, assuming your portfolio will grow over time to 10k Ā£ then your annual fee is 4.99 x 12 = 59.88Ā£ which in proportion to your portfolio is just 0.6% (59.88/10000). The more your porfolio will grow the more the fees % will go down.
This was the main draw for me. Setting up a ISA was trivial with Freetrade when compared with big highstreet banks.
As far as I can make out high street banks have higher purchase and selling fees. AND a poor choice of shares. Even less than freetrade. A very poor comparison to freetrade. Although they tend to have the appropriate questionnaires to see if youāre capable of working out what you are investing in. IE the so called complex investments. In reference to the latter freetrade is particularly poor value.
More importantly if you buy by Ā£10 worth of shares in multiple companies, as some on here seem to do then freetrade is bargain. Reinvesting small dividend payment all so makes them a bargain.
For those who just start investing or who only have a small amount of money the free freetrade is where they should be investing. The O.P. expect to much for free.
As further aside. Those who have just started investing and investing small amounts should not be using an ISA. They should be investing in a general account and when they have a certain amount in there general account selling, putting the money into an ISA and buying back the same shares or others. There is of course the upcoming problem of reduced dividend tax allowance and capital gains tax allowance, so not 100% accurate.
The O.P. expect to much for free.
You clearly didnāt read it all or completely misinterpreted my point if thatās your take from my post.
Wow you found a cheaper site that gives you all of market?
Please please please tells us which one
Agree with the math in the first month, but you would have to use the total balance as the denominator (it is a fee for the total service not the transaction) so after a year of adding 100 a month the fee becomes negligible.
Separately, I wonder whether someone starting out like this should be going down the long tail of individual stocks. Iāve often thought it would be great to have a platform with just VWRL or something like that (would stop me from getting distracted by objects!). Anyone putting in the time to figure out how to allocate <1000gbp across individual stocks IMO should be looking at it as a hobby and not an efficient use of time / money. I suppose that platform is just Vanguard
Iām not sure if this was an irony or not but Iāll answer anyway.
Indeed, there is a commission-free platform providing stocks from many exchanges, including US and UK but also other European exchanges. The platform has been named on this forum multiple times and itās easy to find anyway as thereās only a handful of such platforms in the UK. Iām moving all my new investments there for the aforementioned reasons.
As I said before, Iām not going to name it here because thatās not the point of this thread.
Thanks someone has dropped a clue!
What about 212?
I donāt have an account with them, so donāt keep tabs on what theyāre up to.
Theyāve got a completely free ISA.