Freetrade Competitors

This is an old article from last year, but I think it is interesting in showing HL customer growth, and give some idea of the size of market Freetrade is entering:

https://www.hl.co.uk/about-us/press/press-releases/hargreaves-lansdown-reaches-the-1-million-client-milestone

It looks like they are growing around 100k customers a year, it will be interesting to see similar figures from Freetrade over the next few years as they grow.

Who is everyone else using to invest prior to or as well as freetrade?

  • Hargreaves Lansdown
  • Interactive Investor
  • Halifax
  • Motley Fool
  • Degiro
  • Barclays
  • The Share Centre
  • Selftrade
  • Other (post below)

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I’ve used Interactive Investor and iWeb (same platform as Halifax), both selected on grounds of platform/transaction cost. II has got a bit better this year but both are pretty user-unfriendly experiences.

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I just use a fancy Russian broker with a 0.3% flat fee (used to be 0.03% :frowning: ). But quite informative and with good analytical tools inside.

Once the US stocks are available switching to :freetrade: completely.

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I’m with Hargreaves Lansdown and AJ Bell Youinvest. Both I guess have competitive ISAs if you only hold stocks, ETFs and investment trusts (annual fees: HL £45 , AJB £30 vs FT’s £36 monthly/£25 annual) but neither can compete with FT’s zero trading fee costs.

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I use IG which is geared to short term trading rather than long term investing. E.g. They’ve recently introduced a £24 quarterly custody fee which applies unless you trade 3 times in a quarter @ £8 a trade (or have a large smart portfolio).

Pretty similar to Interactive Investor who charge a quarterly fee but then give you some free trades…

IG, Interactive Investor and Barclays have all raised fees in the last year!

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Y’all forgetting to mention the crazy FX spreads each and every one of those houses charge!

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Sorry I meant to add IG, went off to find out what their name meant and forgot! Too late to add it now.

Really like the screenshots you posted from that tool, hoping freetrade takes a look at it.

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Charles Schwab is ending commissions on stock trading and the brokerage shares are tanking - https://www.cnbc.com/2019/10/01/charles-schwab-is-eliminating-online-commissions-for-trading-in-us-stocks-and-etfs.html

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Sorry @dadoni Didn’t realise you or anyone had posted it. I created a seperate thread for it

Too soon, Wall Street?

I used to walk past Charles Schwab’s building every day.

It’s early days for :freetrade:—the company’s only seen seed money.

You have to bring the product to the market and then improve it constantly. And there will be hiccups just like when Amazon loses your delivery.

But traditional Wall St and City brokers had to be disrupted sooner or later—no innovation, fat fees, big offices:

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So when is a business most ripe to be disrupted?

2017:

1/3 of consumers indicate they would switch to Google, Amazon or Facebook if they offered financial services
9 in 10 millennials now using digital to access financial services


Source - https://www.youtube.com/watch?v=h38nfiEpx2U

TD Ameritrade following Charles Schwab with scrapping fees

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Again, a classic innovator’s dilemma.

TD still has an $18 billion market cap. Scwab—$48 billion. E*Trade—just under $9 billion.

What’s weird is that E * Trade has an office in downtown San Francisco. So does Fidelity, which also does a fair bit of venture cap investing. A 10-minute ride on a streetcar from E*Trade will take you to Twitter, Uber, Square. A 30-40-minute ride on a train will take you to Palo Alto.

If you were an investor in those companies, you should’ve raised these issues years ago.

Or better—invest in :freetrade: and become part of the next thing.

The good news is that these companies may have to cross sell other products and sneak other fees into the bills to make up for lost revenues—public companies get punished if they are not growing. Meanwhile, :freetrade: can focus on own business model.

RH was launched in 2013, so the old guard on the other side of the pond had a 6-year warning and a signal that that was Vanguard lowering its fees.

Even JPM launched its own platform called You Invest.

It’s hard to cannibalise your business iPod-iPhone style or the way MS Office/Adobe switched to recurring subscriptions for Office/Photoshop.

And the millennials and gen Z probably haven’t heard of TD, E * Trade or Charles Schwab. So these companies are left with advertising to industry people? You have to have a cool brand to appeal to Gen Z. Otherwise, Apple would have put a Goldman Sachs logo on its Apple card (because you’d effectively be banking with Goldman if you get that plastic.)

Source - https://www.glassdoor.co.uk/Reviews/E-TRADE-Financial-Reviews-E6005.htm?countryRedirect=true

Meanwhile, RH has just opened an office in Denver, which is full of software engs.

Major brokerage firms have been pressured to go to zero fees since 2013 when Silicon Valley start-up Robinhood offered stock trading for free. Since then, Vanguard Group slashed fees on ETF trades and J.P. Morgan Chase started its own free trading app.

TD Ameritrade’s chief financial officer, said its zero fee structure will have a 15% to 16% impact on quarterly net revenues, compared to the 3% or 4% that Schwab’s CFO estimates.

Bank of America estimates TD Ameritrade generates 28% of revenues from commissions and Schwab generates only 8% from revenue. E*Trade, which still charges commission fees, gets about 17% of revenue from commission.

Barclays downgraded the entire online brokerage sector on Wednesday, including Schwab, E-Trade, and TD Ameritrade, to underweight for getting ride of its “most lucrative trading product.” The firm said E-Trade will have to follow. Shares of E-Trade fell 5% in premarket trading on Wednesday following a 16% decline on Tuesday.

Source - https://www.cnbc.com/2019/10/02/the-end-of-commissions-for-stock-trading-is-near-as-td-ameritrade-cuts-to-zero-matching-schwab.html

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From my email -

Degiro to introduce a subscription model in March 2020.

£2.20/month for commission free US trades. Other exchanges to follow.

Just bought a stock on HL, 17% commission :face_vomiting: :sweat_smile:

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Ouch. Not on :freetrade: I assume ? Bit of a hammer blow to start 17% down …

Not on :freetrade: and not on T212 and didn’t want to request and wait for it to be listed and didn’t want to wait a couple days for my Degiro deposit to be processed so took the hit…

:man_shrugging:

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How can you make money paying a 17% commission? How much does it have to go up by for you to profit? What about when you sell? I would never make such a trade.

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