40 likes from the community.
Bumping up
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Iām all for this solution. Needs to be a priority imo. Obviously Iām not aware if others things ft ate planning but given the level of interaction on this point, I do think this is a good compromise. Letās not forget this form is less than 10% of the total users of the app so there will be many many more people that will feel like this but wonāt have the benefit of all these discussions for and against
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@szb Noted, Sergey!
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Stocks moving in and out of indeces is not an everyday occurence. From our perspective, using indeces results in an impartial and binary āeditorialā decision. The FTSE Group put time, money, and effort into identifying the 50, 100, all AIM stocks, etc.
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Thanks for your response earlier Viktor. Itāll be interesting to see how users respond to the plus stocks move, maybe itās just me that feels this strongly.
I shouldāve added that one main source of frustration for me is the fee structure. Ā£120/year represents a 1.2% fee on a Ā£10k portfolio, which is expensive enough to be a non-starter (making Degiro, T212, etc more attractive to me right now). Whatās more, as Freetrade is targeting newer investors, I would imagine many portfolios are <Ā£10k.
I think a percentage fee (e.g. 0.1%, capped at x amount) would have been more appropriate here - much like Vanguard.
Just to add to a discussion happening earlier also, T212 have mentioned theyād become self sustaining by share lending (much like Degiro does), in the spirit of a balanced discussion. I appreciate that they might eventually make a hard left to monetise more aggressively though, someday.
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Except there is the issue that downgrades from the FTSE100 to FTSE250 will not see people unable to trade shares. However, as shares drop out of the FTSE250 this will occur. This added layer of complexity is, without seriously clear communication, will confuse many.
For example, my siblings all use Freetrade and none of them would readily comprehend this. Given how ambivalent all of them are to the product, due to a lack of interest in the stock market in general rather than a particular failing of Freetrade, any friction would likely see them cease use of Freetrade. I would wager that many users of Freetrade fall into this category.
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Would your siblingsā portfolios even be impacted by this? If theyāre not hands on and interested in the stock market I imagine they have largely passive portfolios. Even if they were to select individual stocks given your description I would say that the non-Plus universe would usually suffice for their risk appetite.
Wouldnāt the easy way of solving this be to simply have a one way system where if a stock goes into one of the indexes suchas the Aim 100, FTSE 250, etcā¦ to make them free if they werenāt already and leave them there even if they go back out the other way. Basically a one way system in. It isnāt like hundreds of stocks will be moving around each year between them - it will be a very low number and would hardly make a dent on the number of plus stocks available (aiming to get many other markets around the world is a large amount of stocks).
This promise (it would have to be a promise to secure the trust of the people who are disappointed by the precedent set by paywalling existingly free stocks at the moment - I am not in that category, but seemly quite a few people are) would give confidence without impacting on the quality of the Plus offering. The only issue I can see with it is that customers who didnāt know about this one way system would maybe be a little confused by any exceptions they came across that are outside the free indexes and them asking the question of why they were free. (I guess the other issue is that some people donāt believe in paywalling any stocks, but you canāt please all of the people all of the time).
In general I think Freetrade are striking a nice middle ground. It is important to remember also that FT doesnāt;t have the goal of all customers becoming Plus account holders. It wonāt make sense in terms of cost or product for many clients, especially while their portfolios remain smaller and that is OK. If it doesnāt appeal to everyone on this forum that wonāt necessarily be wrong. I also wouldnāt be surprised if there is some kind of free or discounted offer on launch.
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I actually agree with the diversification: I think the 2 company limit is when you are sure that you will be investing for a long time. Keeping track of 20 companies with only 20K invested is a lot of work and does not pay off. You might get the same return but had to be keeping track ofg much more variables than if you were only dealing with two companies. In my case, I started with 2k and invested in a myriad of companies, max Ā£200 per company. It is mentally difficult to get rid of a company because of FOMO. When you hold less companies but larger amounts of shares, it is easier to sell I feel.
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If you only have Ā£20K and invest it all in just 2 companies an unforeseen piece of bad news in one company could cost you 25% or more of your portfolio
If you have that much to invest and donāt want to spend time keeping an eye on it you are better off with ETFs IMO
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Investing in only 2 companies is always terrible advice, even if you only invest Ā£100. Just donāt.
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Does anyone know when Qualifying investors will receive the plus access for free
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I asked in-app and was told that this will happen in āthe coming monthsā when Plus has been officially launched.
Still donāt understand the logic of putting Investment Trusts in Plus as it makes the platform less attractive to long-term investors. Just noticed that T212 has now included Baillie Giffordās Pacific Horizon (PHI), a stock in the Plus part of FT, making my decision as to where I hold my ISA a no brainer. Iām disappointed as like FT as a product.
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As a fellow long term investor please speak for yourself and not for other long term investors. I am sorry about your situation. If FT were to allow Ā£1 trades for Plus stocks would that sweeten the deal Vs HL?
I was speaking for myself.
A Ā£3 ISA with the ability to purchase Plus shares for a Ā£1 trading would become more attractive than HL, less attractive that T212, as they currently have the Plus stock I invest in for free
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We were specifically promised during one of the AMAs that existing free stocks would not move to being Plus only.
Ironically, I see one of the shares I got free for recommending Freetrade to someone is on the list as well as some other popular stocks.
I am not impressed with Freetrade effectively breaking their word which is very disappointing to me as an investor in them.
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I think everything that is currently in the standard account should stay there and new additions can be divided between free and premium.
Taking something away always has a negative reaction from some and this can be avoided by leaving what is available in place.
On a side note, I donāt like the fractional share change, I like having whole shares and I canāt do that with US stocks
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Just for the sake of having my voice heard as an investor in Freetrade and user of it. The Freetrade Plus pricing model doesnāt work for me either.
I am a small investor. I have a general Freetrade account which I have been using to buy small amounts of shares in individual companies as a beginners foray into share picking. I also hold a sub Ā£10k ISA with Fidelity which I drip feed a bit of money into monthly. For a while I only held a number of OEICs + ETFs in the ISA which had 0 to minimal fee for purchasing. Fidelity charged a very small management fee averaging around Ā£5pa for all of my holdings.
In 2020 iāve started to buy into individual shares in my ISA and iām paying a Ā£10 dealing fee each time. The ISA has been growing well though success from a few risky AIM all share companies which werenāt on Freetrade but now are accessible through Freetrade Plus. Checking my fees on Fidelity iāve paid around Ā£55 this year. I might buy another one or two individual stocks before year end.
I was considering moving my ISA to Freetrade Plus because I like the app and the community but at Ā£120pa it is way too much for my level of investing. I have also brought 5-6 people to Freetrade through the free share scheme and each of them have brought a few more people of their social networks. All of them invest less than I do and have started to air frustration that they want access to some of the shares popping up behind the paywall but they definitely donāt want to pay Ā£120 a year for the privilege due to the small amounts they are investing.
So in conclusion I feel myself and my friends are some of the great unwashed Freetrade intended and have opened up the world of investment to. However you arenāt monetising well from us. And as a shareholder I would like to see you become a profitable company. Iām all for a small fee to access an individual company behind the pay wall. I donāt have a problem with the ISA fee at the level it is but I wouldnāt have access to the companies I want if I transferred my ISA. The Plus account is too high a price based on the current values I invest and amount of transactions I carry out. It doesnāt seem a rational fee based on the level of investor Freetrade is pitched at. I thought you wanted the masses and would then try to make a small amount off the greater volume of people. Not a fixed fee from a small amount of larger investors.
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All good points.
Itās a bit of a chicken and egg problem maybe, though I wonder if they could potentially do a mix of fixed free and per trade fee for access. The fixed fee is better in basically all ways, but as you say, it only becomes better at a specific portfolio value. Thatās why I imagine vanguard does so well with many investors, itās cheaper than Freetrade up to a certain point.
I do wonder on the numbers though, how many people are making less than 12 trades a year in these smaller riskier options with small amounts of money. It canāt be a huge number or the raise Freetrade wouldnāt use this model.
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