Isnāt the point that new investors arenāt equipped to make that assessment?
On the flipside though, it feels a bit dodgy that FT is monetising the access to riskier stocks, when most of their income comes from penny stocks it might create odd incentives for them. The optics could be a bit āWolf of Wall Streetā if FT is seen as making most of their money from novice investors buying penny stocks.
Also it feels weird that FT+ is worthwhile if you are interested in the <0.1% of the market that is small UK stocks but doesnāt do anything for the large fees for trading large US stocks (~60%) and rest of the world when they get there (~36%). It just seems an extremely niche offering that I canāt see appealing to enough people.
I think itās important to clarify something here.
We arenāt differentiating stocks in terms of their relative risk. Investing in any stock carries risk and it is up to everyone to determine exactly how those risks fit with their particular objectives and portfolio make up.
In deciding on an impartial method for distinguishing between stocks, we wanted to make the Free plan option attractive for anyone who is interested in a solid range of some of the most widely followed stocks in the world. Sort of like a starter pack that you can use commission free, forever.
In our vision, Plus is the default option for people who want to have unlimited access to markets, in terms of both the available universe (for which the vision is to give you every stock listed around the world) as well as an enhanced feature set (think limit orders, more insights, etc).
Hi Alex, the current differentiation has Baillie Gifford US Growth as a free stock and both Baillie Gifford European & China Growth as a paywalled stock. Itās in incidences like this the differentiation becomes confusing.
I think you should read this thread in detail then. A lot of people are explaining/justifying Freetradeās position as offering relatively safer stocks for people to dip their toe in with.
Your use of the phrase āstarter packā lends support to the opinions above and seems to imply that this is a safer starting ground for people to then expand on. There is nothing inherently safe in stocks within indexes. Yes these stocks are, on average, less volatile due to support from major investment houses but volatility is not risk. Surely then, the implication for any new investor reading this thread is that this is the reasoning behind the move.
By definition any method of selection is not impartial because in choosing that method you have shunned other methods. The method Freetrade has selected is partially automatic but it was a conscious decision and therefore not impartial?
The decision to add certain requested IPOs, SPACs and the like further invalidates your claim that the selection of stocks within the āFreeā universe is impartial.
What most rankles me is that I seem to remember that @Duncan , though I am happy to be corrected on this with supporting evidence, stated during an AMA that no stocks which were available at the time would be moving into Plus behind the paywall.
I do not want to sound overly argumentative and critical but I have had 3 conversations in the last 2 days, with people I have recommended Freetrade to, asking about the risk of their portfolio following this announcement.
Whilst Plus was being developed and the idea of certain stocks only being available on Plus came out several members of the community suggested it would be more simple to separate by indexes, rather than FT picking seemingly random individual stocks.
Theyāve excluded the least owned and worst performing index from the free tier. If they were going to pick an index, this is probably the best one to pick (that they currently have access to at least). Perhaps less about what is considered safe or not.
Impartiality is more about removing personal bias, prejudice etc, which splitting on indexes achieves this.
I didnāt expect SPACs ( Nikola went public because of a SPAC ) in the free universe but it makes sense as they would be requested to no end if they were left out. Freetrade is still being impartial in this case as itās not a case of the Freetrade saying it will be a hot stock letās paywall it, instead itās the crowd collectively pushing for those IPOs and SPACs.
Anyway, it could be argued that stocks should be grandfathered but that can become problematic as well.
Except Freetrade are not splitting on indexes because extra shares are being added. The crowd does not have power and no defined criteria, number of votes for example, has been set out so again not impartial.
Why would a crowd have power over anything? Itās not a cooperative.
In any case thereās a clear definition of what is and isnāt in twist tier. And if you feel something should be free or under Plus you can post that idea with your data and evidence in #ideas
Sort of. They have not publicly shared their exact meanings for āhighly-requestedā, ālarge cap companiesā, and āmicro-cap stocksā but that doesnāt mean they have not defined it.
) in the free universe but it makes sense as they would be requested to no end if they were left out. Freetrade is still being impartial in this case as itās not a case of the Freetrade saying it will be a hot stock letās paywall it, instead itās the crowd collectively pushing for those IPOs and SPACs.