Would it be possible to have a vision of the future sustainability of Freetrade ?
I can sense with all the commission free brokers there is a doubt in many people’s mind before they take the plunge and start investing with their hard earned cash.
I feel it will help attract the people who are watching on the sidelines to take the plunge.
Freetrade have been getting my ISA fee since December and I love it 
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I don’t really see why it matters.
Broker goes bust you still own the stuff you’ve bought. It’s held in nominee separate to the company.
See:
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Ok fair enough.
Lock 
the thread !
Sure? Happy to leave it open of you think there’s discussion to be had?
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Everyone’s share dealing is as safe with freetrade as any other broker in the UK. Now with free instant trades, when the team at freetrade are ready, I’d like to know how this would affect (or if it was factored in from the start) the long term profitibality of the company to be able to keep adding great new features for all of us.
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It’s entirely up to your good self. Maybe i could have replied in the FSCS thread I remember seeing yonks ago 
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People I know haven’t taken up their free share as they want to see Freetrade around for a few years.
How can they make money is what I get asked.
I have the faith. The platform will be used by huge numbers as it’s personally what I’ve wanted for years ! It’s the others .
I didn’t make the case for Freetrade even though I’m all in personally as I feel they can look for themselves and make their own mind up.
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Freetrade is in the rapid growth phase. Making money during this period usually tends to be an afterthought.
I can see an account charge being a pretty standard thing moving forward, as well as premium features account.
£3 for an ISA isn’t much.
But £3 per ISA, JISA, LISA, SIPP in the UK (not to mention whatevers available across the EU / Aus / Canada etc) will soon add up.
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It is normal for startups to make losses. But economies of scale play here. If Freetrade gets 2 million accounts in the next 5 years they will need more staff of course, but the number of staff and running costs won’t be proportionally the same as those need for 100,000. It’s economies of scale.
Another thing worth remember is compounding. Like investments a growth of 50% a year gets a lot more tasty in 5 years than it does in the first 6 months.
Think of how many people don’t know of Freetrade, but would use it if they did? The team’s job is to reach out to those people at the smallest cost possible.
The other thing the team had to be careful was overloading too quickly without the support to back up users. That would be a PR disaster. When it comes to people’s money and investments you want 0% negative publicity.
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Could there be a possibility for Freetrade to offer a B2B proposition. They now have their own platform so should be able to licence this out to other brokers? If so then could be a really good revenue stream.
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Is it really sustainable for totally free transactions?
I personally moved my ISA from Halifax and have GIA also with free trade as it allows me to trade for free and buy lower volumes of stocks at one time reducing risk by dollar (£) cost averaging.
This is great for me (free trading) however I would prefer freetrade to charge a small transaction fee (for example 0.1% to 0.49%) and be a more sustainable/profitable business who will be around for years to come.
This is still massively cheap compared to other brokers and also allows people to see how free trade actually make a profit (my own friend is reluctant to move his funds to freetrade as he doesn’t understand how a company can operate for free).
I personally believe freetrade is a brilliant app and would be more than happy to pay a small fee to make this a booming business that I can use for years to come. With the stocks we pick we look for business’s that are profitable and have really great earnings, why would we not want the broker we use to do the same?
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That I believe is why Freetrade recently change the subscriptions with the new £4.99 tariff which gives access to all stocks.
I think the hope is most people will take out that subscription which would make it much more commercially viable and to be fair I have gone from free to the £4.99 tariff and i like not having restrictions on which stocks i can trade, hopefully many will feel the same and that will help the business more sustainable.
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On non-UK stocks you already pay a small 0.45% fee on currency plus FT intend to derive revenue from share lending so although the upfront cost to you may be nothing you are still paying in some form.
And Freetrade makes money from all the cash in your account(s). In fact as interest rates rise I expect Freetrade’s revenue intake from this will only go up. The present 1% and 3% (as appropriate for the sub level) interest that you get are really incentives for you to leave money in your account - and Freetrade makes money from it. It won’t be able to lend your shares (and therefore generate revenue) in an ISA but it will earn interest on the cash that is sitting in there.
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This is part of HL’s model too - their cash AUA at the end of 2022 (tax year) was £15.0 billion…
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I hope @NeilB ’s explanation for the slowdown in speed of dividend payments is correct (i.e. lack of people) and not for reasons of making a bit of extra interest on the side. NatWest divi still not paid from last Friday.
As regards other platforms, Vanguard took 11 weeks to credit my SIPP with the tax relief, despite their blurb stating 6-10 weeks. And very interestingly and I’m sure highly coincidentally, when I wrote to them asking where it was yesterday morning, it arrived in my account in the afternoon.
I’m all for FT making money, it’s in my obvious interest for them to do so; I would just like a bit more transparency from them. Them making money on my cash sitting in my account is fine by me, everyone does it, but waiting a week for NatWest divis? That sits less comfortably.
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Just looking for some opinions here on wether this model is sustainable and what we think the general health of the business is given the state of the UK economy
I have over 10K invested with them and i know this is allegedly covered by FCA protection i don’t fancy getting drawn into a 6month - 1year administration process to get it back
It’s no secret the UK is headed into extremely dangerous territory
piss poor monetary policies , horrific socioeconomics , debasement of currency , every decreasing GDP and a government that doesn’t have a clue what it is doing
Is free-trade built to withstand what is brewing ?
I see a gov default and at least one serious financial institution collapsing next year
Appreciate other peoples views & perspectives here
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Freetrade is well funded from recent investment rounds and has a promising path to profitability. In any case client funds & investments are ringfenced and wouldn’t be subject to administration proceedings. More info here: Is my money safe? | Support
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Shouldn’t Freetrade benefit from market volatility as we all move our assets around?
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@JJY1992 very reasonably wants to know how long it would take for him to get his hands on his assets in case of problems. I don’t know the answer to that and the link you have provided does not answer that question. We know he will get his assets back but so long as he doesn’t have them back he won’t be able to trade them. In the time he doesn’t have them their tradeable value may change up or down. This is something we should all understand and be aware of.
The company has a runway to the end of 2023 (inc. the CNL funds) according to the last round’s documents. One can decide for oneself whether that is well funded or not.
Various possible scenarios for the business are possible. It is important for everyone to understand the risks of their investments and take actions to mitigate those risks.
I don’t have your Crystal ball to engage in that sort of speculation. But say you are right. The question is really how does all that affect the custody of your investments? I have no idea myself without knowing some specifics.
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Ok thanks for the insight at least i have a rough timeframe there to work with there
You can see already they are changing the model with the introduction of monthly subscriptions that worries me slightly but we will see how they adapt to the ever changing environment
I guess you are right with the recent crowd funding there should be plenty of room to manoeuvre for at least 12 months
RE: economy i am just speculating the worst as i can see the central banks and governments have gotten themselves into one hell of a corner i just feel it in my waters
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