How does FT make money from (free) General-only account customers?

Hi, just wondering how FT makes its money from those of us with (free) General accounts? I ask because things that are too good to believe generally are!

I have no complaints, incidentally, just trying to better understand something I know little about.

TIA

Fx fees on non-UK stocks and interest on any cash holdings.

They would also like to introduce share lending but held off for the time being.

From a customer perspective.

Freetrade I expect make some money from the Fx fees on foreign stock investment at the moment they charge 0.45% to buy/sell, I expect some of that gets eaten by costs and some is profit. This will change to 0.99% in May I think.

They’ll also make a small amount of money off of customer deposits, money sitting in your account not yet invested they can likely generate some interest from.

They are also looking to utilise stock lending to generate revenue from GIA accounts. I don’t think they have this implemented yet Securities lending

I expect, they’re also looking at customer conversion. That free customers will eventually convert to paid customers with the standard accounts that gives an ISA and larger stock universe, or plus account that gives the ISA and a SIPP. (and lower Fx fees)

I expect that free customers will never be a huge revenue generator, but that free customers eventually converting to paid customers will be where they get more reliable income. But who knows, maybe they came make it work with the right number of customers to make reasonable revenue from free customers.

Thats all just my view mind you :smiley:

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Didnt they restrict non-UK purchases through a GIA account though? I thought GIAs could not purchase any US listed stocks for example, unless through a UK based ETF or index fund

You can purchase foreign stocks in a free GIA account.

The complete list of stocks is here, you can filter by ‘Plus_only’ > False

Short answer, they dont make much, longer answer they probably consider this to be a loss leader expecting a percentage of users to upgrade to a paid subscription. With the amount of interest you can earn tax free going down in the next two tax years it may be a good idea to pay the subs to be able to open an isa.

I wondered if they could earn of individual buys/sells… All this topping up to lower the sp… When it comes about and ‘sell all’ is selected, could any benefit be taken from the sales that were made below the final settlement price…, As most people drop money whilst using the platform,is there any way ft could stand a % of each initial buy knowing the stats are in their favour overall ? Sorry, just thinking out loud, interesting question.

I’m not sure that doing that would be legal in the UK

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There’s no stats in their favour.

Brokers can’t make money by artificially adjusting the spread or giving preferential treatment to a market maker in favour of a kick back. You get the best price available when buying or selling.

I think you might also be slightly misunderstanding how you’re buying shares slightly. There’s no missing money. If you buy shares at x price, and the price goes down and you buy at y price. Then later the price goes up to z price there’s no difference in the shares, there shares are all the same. Each share is worth z regardless of when it was bought

Freetrade may make some calculations in your portfolio to show you the gain / loss but that’s it

If you are using a broker or several different platforms,can you hold shares for 1 company at differing value? or is it the case an individual is averaged out by the stock exchange? Excuse my ignorance.

Agreed. Not in this example but there is some missing money when holding dividend paying fractional stocks where the dividend is rounded down to the nearest penny (or the nearest zero)! They probably collect a little here, but doubt it would pay the rent (but it might pay a bit of it)!

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