Hi Jordan, thanks for this update and look forward to receiving more detail on the Swedish / EEA launches in the future.
Having been responsible for payroll across a number of European countries in the past, the one thing that really stood out was just how different each country was in terms of local laws and taxes. I can imagine that setting up a stockbroker is far more complex than this and the reality is that there is no ‘one size fits all’ solution which can be rolled out across the EU?
It would certainly be useful to get your take on how tailored the future European rollout will need to be & whether you can apply learnings from Sweden to speed up the roll out in Germany etc?
At the Community Meetup on Tuesday someone on the Freetrade Team said that if they had the choice again for 1st Country of Launch they would still pick Sweden, apologies for not remembering who said it but I am Old. I am paraphrasing but it was mentioned that alot of Swedes have a high disposable income and because of the high level of financial regulations in Sweden, ISK’s etc the lessons learned would be of benefit to future country/EU rollouts.
Also, are you the Real SlimShadey.
Good regulatory.environmemt in Sweden that’s trusted sxtidsd the continent which is the basis of the passporting applications for other EU markets and alike.
Additionaly Swedes/Nordics are all very rich and high level of shares ownership and investing. Active stock market.
That doesn’t bode well for the broader rollout then. (not saying the decision was incorrect, just that it implies the others are presumably less lucrative per unit difficulty)
I gather most of the work was in setting up scalability in the platform, using Sweden as the first:
Freetrade FX, their propriety FX solution, they’ve cut out the middleman (presumably currency cloud or another) that other brokers may use and can now add any currency pairs themselves as well as increasing their margin.
Account types - sound like part of the platform has been created in a way that each extra account type (JISA,LISA, European ISA’s etc) each have a smaller marginal cost of being added.
That was Jordan Sinclair, MD Europe. He also mentioned people in the Nordics look for a regulated company to be from somewhere with a respected regulator, like Sweden, rather than an area with lower regulation, like say a Cyprus type licence (nothing against the country) and that the FCA is keen on this approach too. They’re also tech literate which is good for adoption and tech hires.
A year or so a go I thought the same, but they still have issues with ISA stock eligibility being flagged incorrectly which makes me think even the simple parts of tax advantaged account handling like security classification is just done manually ad hoc rather than automated.
My working assumption is that they are a very long way from having something as general as IsEligible([Security],[AccountType]). The fact that even linking dividends to holdings properly seems to be non-trivial suggests they might not even have the sophistication in their instrument database to leverage ISIN/FIGI identifiers properly with something standard like OpenFIGI to pull the necessary information.
This is just an outsiders hunch, I’d love to be proven wrong but from what I’ve seen I can’t really think of another explanation.
there is a complete failure to understand what the tax situation and manner of use of LISAs is and therefore the massive burden that Freetrade will face with LISAs. To be fair to Freetrade one of the presenters did admit that the LISAs had a higher level of complexity. Look on the HMRC site and you will begin to understand what most people use LISAs for and how they “exit” from them - Freetrade better be up to the job or it will find first time buyers pissed off like hell when their house purchase falls through. None of this “oh the dividend is coming soon; sorry we aspire to give you a better service; we will in the future, honest sis/bruv” will work. It is not for no reason that most brokers don’t offer LISAs.
I am puzzled also by the new argument that Sweden is the right place because of “regulatory respect”. I checked behind my ears - they are not wet. Freetrade went for Sweden in the first place because it would be easier to get the licence - isn’t that what used to be said? Which is fair enough - I have no reason to doubt it. But if we are now shifting to “respect”, when faced with arguments about low numbers: are we saying the German one or the French one aren’t just as respected? Yup, it is dry behind my ears.
Personally, I don’t have any issue with Sweden being the first country. Cool. I am objecting to the strange defensive statements that some founder (or other) investors are making. Management evangelises, but I expect investors to be more circumspect or else I think all they are doing is “pumping”.
I am relaying what I’ve seen/heard. They did have job postings in France, Germany and Sweden before deciding to go with Sweden for their European headquarters. They said they were putting the feelers out to decide where to setup the office. So of course Germany/France are respected places for a headquarters! Note Viktor also speaks German.
The Sweden MD joined very quickly after the postings and so part of the reason could have been his immediate start and a quicker time to setup the office.
Nevertheless the Sweden question was well answered on the evening (whether it was the best place to launch or not). Perhaps you can ask a specific question on the Crowdcube forum!
Sweden is formally live as of today. It’s Ireland next before what sounds like a wider rollout across eurozone countries. Probably soft launching and English language app in multiple countries.
There wasn’t much talk for €/£/K spending at the AMA but a company’s CAC (customer acquisition cost) is usually a fairly closely guarded secret. I’d guess they’ll target countries based on traction.
If they were worried about special tax regimes, I wonder why they did not launch in Belgium first. there is no capital gains tax, and no tax on the first 800 euro of dividends so it would be pretty easy to launch here.
Hi there, a few years ago there were plans to include Italians and other European stock markets. I know some little progress has been done on other (very few) European stocks. However, is there any update specifically for the Italian stock market?
An update would be good, it’s a little worrying when I hear nothing for a while. Too many of my other startup investments that do this end up going into administration.
I am paraphrasing but it was mentioned that alot of Swedes have a high disposable income and because of the high level of financial regulations in Sweden, ISK’s etc the lessons learned would be of benefit to future country/EU rollouts.
