Just out of interest why did you pick Freetrade? I assume you have quite a few alternatives if you are looking at Ā£400-550 / year in costs. Iām not trying to be rude, itās just I picked it based on pricing & coverage but I feel like Iād probably use a different platform if my costs were that high.
Perhaps my previous assumption that people would move to cheaper alternatives is incorrect and Freetrade would miss out on revenue by capping the FX costs in FT+.
For UK stocks use freetrade
For US stocks use trading 212
As my post in another thread got some likes. I will reshare my views here.
I have been dealing with a bank recently which charges more than FT for the simple reason that FT is unavailable in my area and I would not like to trust my savings with brokerages whose business model is unclear to me or oriented on exploiting clientsā misunderstanding of the risky products.
Cheaper FX for premium customers seems like a good idea.
I would be extremely interested to see how Revolut actually executes its FX trades and the way they are bundled. The mark ups on weekends etc. are obscene especially for G10 currencies which are always benchmarked against the London fix over the weekend and so can be executed against.
They present themselves to be low cost and then hide details in the docs that nobody reads. Same thing goes for crypto trading on their platform. Stuff like this will hopefully decrease with competition.
I just do not like them as a company, I think their ethos is just wrong.
They are pushing the whole market with their product. Have to give them that. Still very few products available where the app is comparably good .
@cameron I am not complaining, these costs would have been paid plus 11 quid per trade with other brokers.
I think being completely free to trade would naturally mean people make more trades, and possibly pay higher fx fees, it is just an observation, and I think that should be reflected in FT earnings.
Hello,
I get nowās not the best time to do it as you at the present time are on the road to profitability. This is far more important in the short to mid termā¦butā¦
Would you however in the future be able to match the FX fee that 212 offers.
Thereās 2 ways this can be done.
Once plenty more people are incentivised into plus it can be downgraded to 0.15% or maybe it could be an extra perk of plus in the future?
Interesting, just got an invite link to join 212 but had grown to like FT.
Though holding multi-currencies sounds great, I would vote for a lower fx fee too.
I also think a lower forex fee should be part of Plus. 0.45% can be prohibitively expensive for bigger trades. For example, buying Ā£7k worth of a US stock will cost you about Ā£30 here, around Ā£10 with T212 or Ā£2ish with Interactive Brokers, so itās difficult to justify using FT over the other two.
As I see it, besides interest on cash ā most of the other subscription ābenefitsā donāt add much value: Iād expect customer service, a web portal, access to securities, different order types and recurring investments to be a standard part of any brokerās service.
A lower FX fee or a cap on costs would offer a real incentive to sign up.
Lowering the FX fee is a major one for me too. It is the main reason why my wife and I set up an ISA with IBKR in this tax year. (I still have my SIPP with Freetrade).
If they can lower the FX fee, I would probably move all my holdings back to Freetrade, especially since they now have the Ā£9.99 / month ISA & SIPP Plus plan - such a great deal IMHO. Offering a JISA would be next on my wishlist (IBKR recently are offering a JISA for Ā£1/month)
Itās also one reason I only invest in UK stocks.
I donāt see an issue with .45%. Lower is always nicer, but I pay almost nothing for the service in the first place. IB is cheaper but once you start breaking down other trades is a more difficult calculation
Agreed, it is a difficult calculation due to IBKRās hideously complex pricing policy.
However, even when you factor in commissions (most people will pay $0.35 or ā¬1.25), it barely moves the needle ā FT is still significantly more expensive and thatās before the monthly fee.
All in, I paid about 0.02% on a recent IBKR trade which would have cost me over 2,000% more on FT. The issue is the substantial impact this will have on long-term returns.
Itās a tricky one but I think itās important that FT becomes more competitive. Perhaps a cap for Plus subscribers could work, ie you never pay more than say Ā£15 in forex on a trade?
More competitive compared to what though? Freetrade is cheaper than almost all brokers.
Even on IBs own comparison freetrade is listed as third cheapest on US trades out of about 10 brokers.
Thereās also a level of where people are happy to pay fees for a particular service. So I guess itās finding that balance between cost and service. Probably the reason HL get away with much higher fees
Key competitors.
I do see where youāre coming from though ā in the big picture, FT is relatively cheap, and it would be unwise to join a race to the bottom on pricing.
However, the difference in forex fees is stark.
As a relatively early investor in the company, Iād love to move my holdings back to FT. Reducing the FX fee for Plus subscribers could tempt me and others to do so.
Iām not saying FT should necessarily match IBKR or T212 ā just that I think it should narrow that gap.
Yeah itās definitely a tricky one.
Personally, I donāt want to see a tiered FX approach (e.g. HL, AJB) as I like the simplicity of how Freetrade charge fees. I do think lower FX fees should only be for Plus customers. I also understand that IBKR are ridiculously cheap for FX, so as a result,I donāt think Freetrade should even try matching them.
In an ideal world, I would like to see if Freetrade could match T212 (0.15%). This would definitely tempt me to bring back my holdings back to FT.
At the core of it @michaelsaleem and @rehpot are right. If you are interested in US stocks the deal is fandabby. Ā£3 per month minimum activity fee. $0.005 per share dealing cost, min $1.00. You can get cheaper deals with some other US brokers (basically free trading and no monthly fees). The reason IBKR makes sense for some people resident in the UK is that these low costs are available in an ISA.
One has to decide what āinvestment packageā one is after and choose a broker accordingly. It might be that one should have several brokers.
As an investor in FT I donāt support lowering the FX fee - they have to make money somehow. Other platforms make money in other ways which FT donāt.