I disagree. If you have a look at the fees other brokers charge £120/year is at the higher end. It only really makes sense if someone trades frequently enough to offset dealing costs that other brokers charge.
Depending on what’s actually in Plus, I think FT may have priced it too high - especially if they want buy and hold investors/customers to be with them.
Charging for things like limit orders/DRIP/news that most other brokers provide for free or minimal cost isn’t going to be attractive.
That’s a fair point I said it’s a good proposition but with future additional features with that price over time will make it an even better proposition. But only time will tell. I’m sure FT will way up the cost/feature and get the balance right over time because that’s where some of their value lies in creating a great product. If I’m building a portfolio and have substantial growth on my investment over a long timespan. £120 a year is not much if i know it really helped me make better decision as an investor e.g I subscribe to Finimize I think it’s a great app. But as I said it’s up to each individual to way up the benefits of paying the amount over time.
One buy / month in an HL ISA worth £5k would cost you approx £165 / year ( 12 * £12 trade + .45% fee ). Freetrade £156 ( £10 + £3 assuming ISA is a distinct product ). Take up rate will be interesting.
Hopefully we’ll hear more news next week at the ama but I’m sure freetrade have said previously (maybe over the last couple years) that they intend for the isa to be rolled in to alpha/plus.
Or using iWeb, it would be £60 (12*£5 trade) with no other ongoing fees
Fully agree, im at roughly the same portfolio wise and £120 additional fees do seem a little steep especially if that doesn’t include the ISA. (this would be £156 a year total)
Unless Plus has a huge beneficial impact i might struggle to justify paying the extra amount
If it includes is, I think it is probably just possible to justify it, if it has most of the things that people are guessing at.
If it doesn’t include isa, I think it would be tough to justify
Be interested to see if its a full bundle of offerings or pick and choose your own mix
It’s already been said in the past that ISAs will be free for premium subscribers. The original plan was £7 a month so only £4 on top of the ISA fee. £9.99 gives them more room to work with to create something worth paying for.
Interactive Investor have 300k customers paying £9.99 a month btw.
Do you know when this was said?
During round 3.
Yeah i think 9.99 a month could be a little high unless they have lots of features in it. It might make more sense for it to be a bit lower to start with and as they introduce more features they can increase the price (or have different tiers etc). This is because I can’t imagine there will be that many feature at the start to make it worth the price.
I would want the £9.99 fee to include a free SIPP; additional data is nice but obtainable elsewhere. As a Freetrade investor though, I will subscribe anyway as monetisation will be crucial in supporting the share price going forward. Hopefully most other crowd investors will do the same.
They also said SIPPs will be free for premium subscribers. It used to be on the pricing page.
Not that many (as a %) use SIPPs so it is a bit of a niche product and also not relevant outside the UK.
I actually hope investors won’t do this. It’s always bad to be emotionally attached to your investments and if people subscribe just to support a firm - it gives them a misleading impression of the price point that the market will bear.
It also leads to poor decision making - just look at what Monzo thought they could get away with Monzo Plus as many were saying they would join just to support them (regardless of the offering) - they even offered a supporters bundle at one stage.
I like to think that Freetrade has the nouse to separate out the shareholder subscribers from the others, when they are assessing the take-up rates.
Any evidence?
Regarding Freetrade valuation, my holding in Freetrade is now worth more than Monzo especially after this news I saw over on the Monzo forum:
Monzo is raising new cash from investors at an almost 40 per cent discount to its previous fundraising. The digital bank is close to a deal that would value it around £1.25bn, compared to a £2bn valuation last June. The pandemic is posing a serious challenge to unlisted tech companies as VCs become more cautious with their money.
What I don’t understand is the article says that the drop in Monzo price is consistent with the FTSE350 finance sector from the start of this year - but Monzo were valued at £2 billion last year so for me personally this represent a much bigger drop than 40%, to go back to £1.25 billion when we should now (in my opinion) be worth £4 billion+ … something gone wrong somewhere.
Interested to hear why you think monzo should be worth £4B by now
Edit: Although might be more appropriate for the Monzo thread so we dont stray too far off topic!
Pricing on HL isn’t that simple. If you’re doing only one trade a month you probably want to do a regular investment which for non funds (funds have no cost to buy) depending on what you’re buying is £1.50 a month for that trade.
Thats £40.50.
Freetrade has an advantage i think in that this will likely be a very simplistic pricing structure, but simpler doesn’t necessarily mean cheaper, especially when you consider the amounts people have in Freetrade.