‘Whole’ shares are fractional by their very nature, the amount in circulation by a company is completely arbitrary and can fluctuate heavily on a quarter to quarter basis as buybacks and company stock remunerations take place. Whether you own 10000 shares, 1 share or 0.034454 shares in a company makes absolutely no difference, what matters is the comparison to the company accounts and the financial value of what your holdings are.
That being said, this thread has been a fascinating insight into investing psychology and I have to admit when I look at how many shares I own in any given company, I do like seeing round numbers - 2100 vs 2099 for example.
Regardless I’m hugely stoked for this feature! I may finally own a sneaky bit of amazon!
I assume having fractions of shares makes it harder to transfer to other brokers?
Also, say the dividend per share ends up as a fraction, do you lose that fraction amount of the dividend?
Typically you cannot transfer fractional shares and so you would have to sell down whatever fractional holdings you had (i.e. reduce your 1000.07 shares to 1000) and then move a combination of shares and cash.
Dividends are just divided neatly so if you have 0.5 of a whole share you earn 0.5 of the allocated dividend per share (they key part is the yield remains identical only the nominal amount earnt is lower).
Correct if you sell down on each holding only to top it up later you end up paying multiples of fees all taking away from returns. I understand people who want to be able to buy whole shares etc. but to come up with this solution is not smart.
I’d expect you to be able to input the exact amount of shares that you want to buy, rather than being allocated an arbitrary fraction based on the value of your purchase.
As the mixed reaction shows, features like this aren’t for everybody, they are a nice to have and democratise the ability to own expensive shares. However, they shouldn’t be forced on users who for whatever reason don’t want to own a fraction of a share.
So fundamentally, why can’t there be a choice? Is it technically difficult or just not a priority right now / not part of this story?
I agree I think people should be able to choose. I think fundamentally this change was poorly communicated as it bled from the Beta Tester Group into the broader community and just led to people being upset.
Exactly, that is professional, clean layout and provides freedom to choose how you want to buy your shares. The current Freetrade solution just seems like a crazy shortcut / over simplification and shouldn’t get beyond Beta.
It doesn’t need to be a toggle, you just can either enter a £ and the number of shares are calculated or enter a number of shares, and the £ are calculated
If it is implemented, please avoid unnecessary options.
Slightly off topic but does Freetrade even support transfer of whole shares to other platforms?
I have been under the impression we can transfer in but not out. This has prevented me using Freetrade as I wouldn’t want to have to sell shares to move to another platform in the future.
Not at the moment but Viktor has confirmed on another thread that full shares will be able to be transfered when they can do that in the future and only the fraction of a share will need to be cashed before transfer
Will the liquidation of the fraction happen automatically during a transfer or would I have to manually do it myself to ensure successful transfer?
In other words, if I own 10.3 shares in a company and initiate a transfer would 0.3 shares get liquidated and 10 shares get transferred? Or would all 10.3 shares get liquidated because I didn’t have exactly 10 shares at the initiation of the transfer process?
