TBH I donāt get the outrage and similar to a comment from @weenie earlier my bigger concern is Crypto as it does seem to be more volatile than the ethos promoted of long term stable growth. I was going to make FT my main broker but will probably not bother now as it feels like FTs priorities donāt match mine.
I want things like āsort byā menus and ādraw downā options on my pension. As monetise options seem to be a priority they now are more similar to other companies than before so a bit of the sparkle has gone for me. I will keep my ISA here for a few years but probably move pension to a place that isnāt lent out as I am not prepared to take a risk on that no matter how small.
I would of preferred higher fx fees than risk but respect FTs business plan and their openness about it. It is also worth remembering the 85k or whatever it is that is secure by legislation etc for those worrying with portfolios in that bracket.
Freetrade will have assessed that the impact will be low enough to justify doing it. Iām not so sure but what do I knowā¦ other than it doesnāt work for meā¦ Iām oot
Oh I am disappointed they felt they need to do this as I loved the feel of the mission statement but it just feels like a VC company similar to Crowdcube who now have added fees at every end. What I respect about FT is the honesty about it and talking direct to people, that is impressive.
I want a very large pot in 20 yr and was hoping it would be here but not wanting it in a place where my shares are not always mine or at least held in a separate account for me. A super market crash could cause a risk I wouldnāt want.
Iām an FT investor and canāt get angry for their business plans as I can just move money out but see your and others views. TBH the biggest thing for me is the pedestal I had them on has been getting shorter for a while but they are still one of the very best options especially for my beer money account.
Are there documented examples of loaned shares not being returned to a broker and consequent impact?
Is there a summary of which brokers do loan shares and T & Cs around this. I have said earlier that Fineco do but you have to opt in. You do receive some of the associated commision but of course they charge for trades.
I do recall from some contract negotiations that I was party to, that there was a difference between āreasonableā and ābestā endeavours wiia the latter being a more onerous requirement (Note: am not a lawyer!)
But to make sure everyone in this thread is on the same pageā¦
Some people are worried that one of the stocks in their portfolio skyrockets 1000x AND at the same time the institution holding it will not be able to provide it back to FTā¦
So every customer except the superstonks crowd is fully secured by cash or bonds collateral adjusted daily for mark to market.
Fine by me.
An opt out on a premium tier would be great though and for the free tier would also prefer to see the names of the counterparties holding the shares
And now I donāt feel bad about having started to transfer my GIA to HL as the holdings are big enough that a single trade fee is offset by the certainty of knowing exactly what Iāll get and not having to pay a monthly subscription just to have orders set up.
Iām not offended. Youāre making great sense. An opt out option and more transparency sounds potentially great to me and Iād be happy to look at it. Iām not asking much to justify staying with FT.
You do sound quite dismissive of the risks. Thatās fine if they really are small, but if thatās the case I donāt see how anyone can argue against FT taking the risk and not the individual customer.
This is probably a stupid question, but will shares in a GIS still be lent out if I donāt accept the terms?
I understand I wonāt be able to buy from 1 June 2022 if I donāt accept the new terms (which I wonāt be) m, but Iām not clear what happens with my current holdings; I assume they wonāt be loaned out because I havenāt consented
Not sure why you responding to me all im asking is why the risk is put on the customer?
Idk why everyone things its some sort of war thing or superstonkā¦
Put that out of your headā¦
Why does the customer has to take the risk whatever small of a risk you all sayā¦ surely if the risk is so low the freetrade can take the risk instead. Even if its 0.001% probability of losing your shares that freetrade lend out with enough time it will happen.
Are you saying youāre not taking any risk investing in stocks?
Iād like to listen from you the risks about which company or customers lost their money because of securities lending so far as itās been there for several years if not decades ā¦
Borrower default risk and cash collateral reinvestment risk.
I know itās a small % but still. If freetrade believes the risk is non existent they should take that risk not pass it to us.
They will be getting fees for borrowing our shares so in my mind they should take the risk and quaranty the shares back in case of borrower defaulting or collateral not covering the price of borrowed shares
The stock doesnāt have to moon though, it just has to rise beyond the level of collateral during the day or the collateral to fall in value plus a failure of the counterparty for a loss to occur. More likely is a delay in settlement, where you may have wanted to withdraw the cash or buy something else but you canāt as the stock canāt be returned in time.
Either way the customer assumes the risk with no reward. This is the same reason I never moved my SIPP to FT.
Taking a step back, over the last two years FT has had three funding rounds, raised millions and the platform hasnāt improved much. Sure there may be a better cash turnaround time, I think a guaranteed price in a trade window, some kind of transfers in or out, but no tax reporting, or web app, or LISA or JISA, or auto invest, or pies etc.
Itās the customer who is being asked to pay more or risk more without any return. Then you have to weigh in the ultimatum of accept it or leave, which really doesnāt put FT in a good light. The recent FCA notices donāt help with that either. FT was supposed to be different and it isnāt working out that way.
I also think some of the statements are misleading:
Why lend shares?
Additional income
Opportunity to make an additional low risk income from long term assets.
Itās not the customer who get the āadditional low risk incomeā. Anyway, my GIA is small and me closing it wonāt make much difference to FT. Stopping my Plus account may have marginally more effect though.
At the moment it seems itās better to be a shareholder than a customer.
but they are still one of the very best options especially for my beer money account.