This is your favourite line Glad you’re back ahem but as you know we don’t see eye to eye (previous in the Monzo community) so I’m not going to go off topic anymore than we have discussing this.
I’ve said my peace. I believe this community is great; I was just talking about being mindful of groupthink in the future as it grows. Anyhow this is something for you as forum leaders to figure out and I’m sure you’ll get the balance right
The answer to all your problems. Invest in all three. Monzo, Freetrade and Revolut. There will always be more than one player in the market, and as of today, in the disruption play, all three are on my watch list.
Just hanging out to get on to the Freetrade platform and start investing…
…In the meantime, it plans to launch the share trading service in the next four to six months in partnership with an established brokerage, shouldering the cost of commissions it pays on behalf of its users…
Can we create a closed channel on the forum to discuss sensitive questions (like this one) for the investors’ eyes only? I have some thoughts on this but am hesitant to share since there is no privacy. What do you think?
That would still be a lot of expensive services (including the FX and free insurance from a partner) rolled into a £6.99/month account. Not sure but think it would just marginally cut the cost to them, not cover it
Robinhood claimed this is how they’d make money when they first launched. Historically, stockbrokers made a lot of money earning interest on client cash (“interest turn”). But with interest rates where they are, it’s simply not true anymore. Robinhood really makes money off their margin/leverage product (ie high-interest loans that magnify your investment gains or losses).
Also worth noting, you can’t lend client money in a brokerage account like a bank. There’s a reason bank regulation is much stricter with very different regulatory capital requirements (even if the stockbroker is part of a group that has a banking license).
Revolut promises that you won’t pay any commission when you buy or sell shares. The company plans to make money on margin trading, securities lending and interest on cash.
Unless I’m missing something, both models are freemium models. Also, whereas Freetrade don’t plan on offering margin trading, Revolut will which is an additional revenue stream. Correct me if I’m wrong?
Somebody just posted this article in the Monzo community:
We can only speculate to a certain extent until we see their full pricing schedule (who knows what the zero commission covers) but from our perspective the biggest difference between us and Revolut is that we are an actual broker ourselves.
By becoming a member of the LSE, CREST etc and trading directly with the market, we can slash the cost of executing a trade.
Revolut’s plan is to act as a front end for another broker, who will charge them fees on each trade. By introducing a middle man you lose the ability to cut the cost per trade, and therefore it is hard to see how they can offer zero commission in a sustainable way - whichever broker they use will need to make a return themselves!
Interesting. The article mentions parallels with the Amazon Prime approach of a predictable revenue stream. In a similar vain to you where you want to make Alpha so good that it makes sense to pay for it, it appears that this is part of Revolut’s plan for their premium subscription. Would premium revenues cross-subsidise non-premium users not be sustainable from the info we currently know?