Tempted to upgrade to FreeTrade Plus, however

Freetrade Chat 🔥
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As per the title, I’m tempted to upgrade to FreeTrade Plus. I don’t like the stock limitations on the free version nor the inability to place limit orders. I have a small FT portfolio of around £1,500 and also have £1500 in an H&L ISA - but of course they charge £11.95 per trade as well as FX fees. Hence why I am considering FT Plus.

However, multiple sources online seem to suggest the PLUS subscription is a flawed business model that will hurt the platform in the long run - and they advise against it. e.g.

and

and

Thoughts?

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Naturally people who have invested in the Plus stocks before they Plus launched will not see the value of Plus (as per some of these reviews).
If you’re coming from a HL or AJ Bell then it’s fantastic value.
FT needs to make money and other comission free brokers make money from their users losing money. Is that sustainable?

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If you have 4k pounds of cash to park - no brainer.

If not hard to say without knowing your specific use case.

Also Plus in 12 months will be a different beast than it is today as the product is constantly evolving.

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The conclusion in your second link summarised is:

“If you make 3% a year on a £10k balance, you’re losing 50% of your gains due to the fee. Oh and by the way click this link for a free share”.

If you’re only making 3% a year whilst having access to all the plus stocks, then you’re probably better off just putting your money into VWRL anyway and living a relatively stress free life.

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It does depend on your personal circumstances, but the way I see it is that the 3% interest is basically a 100% cashback on the cost (ÂŁ120 / year) - so you get everything else for free.

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Almost for free, you can keep those 4K in a saving account at 0.5% which will give you ÂŁ20. Plus is still costing you some money :slight_smile:

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It’s opportunity cost.

Limit orders can easily save you more

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Wow, has anybody told the Freetrade management their business model is flawed? Must be true as some random in his kitchen on YouTube said so. :man_facepalming:

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I was triggered by many parts of that youtube video, but he completely lost me when he boasted about paying ÂŁ145 a year for a dividend tracker LOL

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I suppose the pub bores have to got to find an alternative outlet during lockdown.

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Thanks for the replies. A couple of further newbie questions if I may.

1) With a Plus account, does it allow you place limit orders on US stocks?

2) A few days ago, I held a US stock in my GIA. The stock closed at $38. At around 10am GMT I placed an order to sell my holding, hoping to lock in that price of $38. However, when the order was executed at 3pm GMT I only got a price of around $36 per share. Where did I go wrong? Would having a Plus account have made any difference in this scenario?

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I have a £9k port in AJ Bell - paying £9.95 to buy and £9.95 to sell. That’s £20 per move.

I don’t trade too often as I try to keep costs low - so if I buy I use the regular investing feature to buy for £1.50 but have to take the price as at 10th of the month.

Anyway, I could easily spend ÂŁ300+ a year on moving in and out of positions (also scaling in/out of holds).

The way I see it is that Freetrade could allow me to maximise profits at a lower cost over 12 months than my other ISA’s.

Should I pay £120 for the year to buy and sell 10’s/50’s times a year? Of course.

In summary, is PLUS worth it? Definitely if it saves you in fees/costs vs your other platforms in return for moving in/out of positions/holds as and when you feel like.

I am currently in the process of moving stuff across just starting with cash balances for now.

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  1. Yes
  2. The market does not open with the last price of the previous day. There is after hours trading as well. Also, freetrade executes orders that were made outside of market times at 3pm. The US market opens at 2.30 though.
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That’s not what it’s meant for anyway

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If fees are 10%+ of your trade per month then definitely not worth it.

But if the fee was 1% of your trade then it’s a different story.

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Which platforms allow you to buy shares for free? This will be of interest to me.

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Ah, those who make their money on wide spreads. I see those. Yes, same %'s but hidden in the spread.

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Great, being able to place limit orders on US stocks is pretty much a deal-breaker for me. H&L doesn’t allow me to do that. I’ll be signing up to Plus.

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Some good points in here.

I’ve joined plus last month to access additional stocks however I’m not sure I will keep it.

Freetrade describe’s itself as a platform for small investors. However, 10£ a month is not a good investment for anyone with a portfolio worth less than say 5k.

I believe a lot of people investing in individual shares will enter and exit positions at least a couple times a year, specially having access to smaller and more volatile stocks in Plus. Limit orders also provide an incentive for increased trading.

Because FT doesn’t allow holdings in dollars, going in and out 2x per year in plus will cost 1.8%. Adding 10£/month on a 5k portfolio we’re looking at a total of 4.2%.

To make it more attractive for smaller investors, FTPlus should be cheaper if the FX rate is to be maintained. Revenue loss could be offset by more people joining Plus, trading more often and paying those FX charges. This would allow for a true easy access to the markets for the small investors.

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If you are a passive investor and go with a Vanguard ISA, they charge a 0.15% ISA admin fee or platform fee. This means if you have more than 24k in your FT account you are better off with the FT ISA. For Plus members a pot value of 80k or more is required to beat Vanguard’s platform fee. Obviously the comparison is not completely fair, however, costs are the main distractor of long term performance.