Is Freetrade trustworthy?


#1

Hargreaves offer amazing service and whilst not cheap I think you would be quite mad to trust your retirement to a start up who is unlikely to be around when you retire. Play money with cheap trading is a different thing.


Transferring portfolios from other Brokers
(Rob Sexton) #2

@PGood we’re building a long term, sustainable business that we hope outlasts all of us! However for anyone who does have concerns, all your money and assets are held under the FCA’s CASS rules. This means it is all in segregated accounts, legally protected, so if anything were to happen to us your investments would be safe, and quickly returned to you.

We’ve appointed PwC, a big 4 audit firm, to audit our controls and processes around this, and we report to the FCA on a monthly basis. I’ll be doing a blog post on all this in the near future, but the important message is whatever your view on our business long term, your investments are protected.


#3

I appreciate that but you HAVE to do all of that. Those are the regulations. 100K paying customers is highly doubtful. Losing money on every trade does not a business make. I will of course take advantage of your generosity just like I only use Monzo overseas.


#4

The ring fencing may not be worth the paper it’s written on…

http://monevator.com/even-brokers-can-fail-you/


#5

I’m personally confident Freetrade will still be around when I retire - and I look forward to moving my portfolio over in due time.


(Rob Sexton) #6

The Beaufort Securities situation is an interesting one. PwC, as the administrators, are currently claiming they can use segregated assets to pay administration costs, which I believe is a first. This seems likely to be subject to legal challenge (https://www.ftadviser.com/investments/2018/05/08/legal-challenge-to-beaufort-securities-administration/), and we, along with the rest of the industry, will be following this closely given the potential implications. However it is hard to believe that the regulator intended this to be possible.


#7

They would do wouldn’t they!

I can’t believe it would cost £100 mil to wind up any broker. They are extracting the Michael.


(Calum McWhir) #8

you would be quite mad to trust your retirement to a start up who is unlikely to be around when you retire

HL was famously started in a bedroom. Everything begins somewhere and, personally, I think you’d be mad not to benefit as much as you can from the improvements the internet and tech offer by way of lower costs, better user experience and security amongst many other things.

Software is eating the world and there’s no good reason why stockbroking should be immune.

I appreciate that but you HAVE to do all of that. Those are the regulations.

We do everything we have to and more. E.g. putting together an operations team of five people before passing a single customer trade through. It would have been easy to cut corners here (in full compliance with the regs) but we would then be in no position to onboard the 30k strong community in the first year, in my opinion.

Losing money on every trade does not a business make.

We’ve been clear about the commercial approach for a while now - this post is coming up a year old. There’s much more to us than free trades.

I will of course take advantage of your generosity just like I only use Monzo overseas.

Careful, you just might stay!


(Christopher) #9

That’s an absolutely egregious act of smash and grab by PwC!


#10

Accountants and lawyers… capitalism’s paracites


(Alex Sherwood) #11

They have to do that because that’s what the regulator has decided is necessary in order to protect consumers. If you trust banks (who’re also regulated by the FCA) then I don’t see any reason why you shouldn’t trust Freetrade. The point of the regulation is that it saves you from having to worry about who you can trust :slight_smile:


(Rob N) #12

A number of companies lose money on customers when using a freemium business model (e.g. on Spotify ~20% or so are paying customers). People got Monzo initially for the overseas card benefits but will then transfer to a full PCA account as they it starts offering full banking services that are infinitely better than traditional banks (for digital users). I trust Monzo!
Check out the financials for Freetrade when they’re released, that should give you more comfort, they won’t be waiting long before turning a profit! :+1:


An introduction to Monzo
(Alex Sherwood) #13

3 posts were merged into an existing topic: An introduction to Monzo


An introduction to Monzo