The amount of strong opinions on this is really interesting. Iâm not a freetrade investor so I donât see it as âwoo more revenueâ but I also donât see it as a particularly bad thing. ETFâs that I own already do this. The indirect benefit to me is that it keeps the managment fees lower. Thatâs basically the same with FT. The question to ask is âam I happy with the service I get and the price I pay for it?â For me personally the answer is yes and this doesnât change that, so I donât care either way. The thing that would make me leave is if FT got uncompetitively expensive, which this should help prevent IMO.
17 Likes
To everyone who said theyâre leaving Iâd like to know wether you are happy to move to a broker subsidise their operations selling complex financial instruments that they know the major of their customers loose money on? IG/T212
Or
Who removes the ability for wealth building for you he and new investors with high and complex fees. Gate keeping the next generation from taking control of their futures.
They majority of stock lending is to make sure YOUR trades are executed efficiently and at prices YOUâRE happy with. Non FT Crowdfunding investors want FT to be a reliable safe place for your money, a sustainable business is the only one you can trust with your investments.
7 Likes
Amazing! Shakespeare & a very salient point. I wonder if they could look into branding the ISA a haram and what other actions would need to be taken?
2 Likes
Just to warn you - Haram mean Forbidden. Saying Branding a ISA as Haram basically mean âISA is Forbidden to Muslimsâ
1 Like
Oh, forgive my ignorance. What phase better explains it better Sharia?
Thank you @adam and @Viktor for taking the time to directly engage in dialogue with your customers; I donât think many other brokers would, and this says a lot.
I have had some time to digest the information and to consider all view points with regards to share lending. While I am still not a huge fan of lending out my shares, I understand it is a common practice (people have mentioned ETFs for example).
As I stated previously, I am all for Freetrade attaining new revenue streams, especially if it increases funding for new features in the future.
I will be accepting the new terms and keeping my business with Freetrade (and will look to transfer in my wifeâs SIPP).
P.S. I know you are currently very busy with European expansion, but if there is any means of expediting the Cloud Platform API, that would be awesome. I really want to be be able to add my Freetrade investments to Moneyhub so that I can track all my finances easily in one place.
Thanks.
14 Likes
Could you use in accordance with Islamic law?
1 Like
Halal means permitted or lawful, although if the overall platform is funded by debt, the ISA would not be halal. Good thought though. I understand that there are halal trading platforms available and indeed halal financial institutions provide some of the best financial returns despite their restrictions on lending and interest.
2 Likes
Cake and eat it springs to mind for most of these users complaining.
People want an improved app and user experience, but expect to get it for a pittance
3 Likes
Iâm relatively happy with this but I will examine the T&Cs to ensure I fully understanding any additional risk to my pension, however small. Itâs important to me that Freetrade makes money and has a sustainable modelâand not just because Iâm a shareholder. I think Iâm right in saying FT has lost cÂŁ11m over the past two financial years and as a customer, Iâd much rather the business was profitable.
2 Likes
Would the ÂŁ1 commission per trade model work? Orca does it on UK stocks and maybe this proves this commission free trading thing isnât sustainable.
For the record they have a percentage FX fee on US stocks and no commission as such is there. Iâd imagine theyâd do something like that for EU stocks, but i am no spokesperson.
Is this zero commission think too big of an ask?
Iâm not suggesting trading shouldnât be made accessible to the everyday person, much like flying was once the low cost carrier age started up.
But I think other than a few, we need to look inward and ask ourselves is the zero commission model sustainable long term.
Also Iâd suggest if it is sustainable then we shall likely see some brokerages close shop. The low cost and zero commission market is no doubt saturated. Some will need to fail sooner or later to allow for others to proceed.
2 Likes
Maybe this is part of the problem. FT is expanding too rapidly and canât manage to financially keep up with growth.
I find orca has added new features a lot slower. While itâs been âa bit annoyingâ to many in its customer base, maybe itâs given it an ability for its profits to rise in line with its growth as a platform.
Ok Iâm not here to madly rep for Orca here, but Iâm trying to understand as best as I can how to make Freetrade profitable as T212 is starting to sign up new customers and I think the coming months will be a pivotal time for freetrade in relation to 212 in particular.
2 Likes
We have a slight problem if they start charging commission per a tradeâŠâŠ the name.
Itâs normal business practice for fin tech companies to be loss making and then bring onboard new revenue streams to push for profitability and increase users net spend.
Stock lend, scrip lend, repo are all part of a well ordered and functioning market. It allows for liquidity provision, and without it, liquidity dries up, bid/offer widens, markets trade âby appointmentâ.
There was a question earlier about âhow does stock lend help your long position go up?â
If I were a market maker (and have been in a previous life), my job is to provide liquidity to market participants. The bid/ask is my buffer to try to facilitate client flow, whilst also being able to cover the positions in my book.
More often than not I am ambivalent about market direction. You, the client, ask me for an offer, you get the rhs of the market. You ask for a bid, the lhs.
If you lift my offer and take me short, at some stage I need to cover my position, but in the short term, my repo desk need to borrow that stock to settle the trade; hence stock lend or repo.
If the repo market doesnt function, or doesnt function well, I ultimately get âbought inâ. This will lose me plenty and will force the price up. My P&L dictates what I do next. You, or another client ask me for an offer in the same stock, and I just pass, as does the rest of the âstreetâ. Lack of client facilitation and proper functioning of the repo market creates illiquidity. Fact.
However, if markets are functioning properly, then I can comfortably make a market time and again. This creates liquidity. If supply demand dictates that the price goes higher, it goes higher. But I can borrow to settle your trade, and I can cover my position in the inter dealer market. This helps your price move higher, if there are more buyers than sellers. Shutting down repo doesnt. It stops it dead in its tracks.
The other thing is that other market participants will be doing this. It is low hanging fruit; money left on the table. Those that are naturally long a stock will stock lend - life cos, asset managers, ETF providers. If you dont lend out your 3 shares, then rest assured Blackrock will be lending out their 30,000,000. Get over it.
This makes perfect sense from a commercial perspective for Freetrade. The race to the bottom is definitely on, with us clients wanting the best tech and analytics, the best liquidity, every stock under the sun with zero trading costs etc.
These guys need to make money or they dont exist.
You buy something if you see value and think that your research suggests it goes up. Stock lend will happen elsewhere regardless. Whether you lend or not is irrelevant. So why not let Freetrade monetise this and keep the lights on?
27 Likes
As a long term investor and user Im delighted.
Almost everywhere does this or something similar. If you dont like stock lending you shouldnât be investing. This is how markets work. Theres nothing sinister here.
Would you all like to go back to 11.95 a trade? Then HL is for you. They dont lend stock, but their ETF do.
FT cant keep providing a top class service for charity. They dont have a donations box. You either cover your costs or go bust. Ideally there woukd be premium tier where there was a kickback or opt out, but that requires enormous development resoruces.
It would be much better to develop the product with new features rather than pandering to woke GME fanatics who are at war with the establishment because reddit said so.
34 Likes
I love that last sentence. 100% agree
2 Likes
Irrespective of your point of view I think everyone should have the right to raise their opinion on this sort of first world problem without being branded âwokeâ or âfanaticsâ. War analogies unhelpful at this point in time imo.
13 Likes
After June 2022 the updated terms would be in force. Either open an ISA or only hold US stocks of this is a big issue for you. It shouldnât be.
1 Like
All I care about is do I own my stocks still? If they are lent are they guaranteed back to me? If so then I couldnât give a monkeys and wish FT luck in any way to make money as long as it is legal and doesnât affect my investments security. 
2 Likes
Also what does âwokeâ even mean in this context? I mean I agree with the sentiment that Freetrade shouldnât excessively pander to the meme stock crowd, but I donât see much of a much of a racial / social injustice angle to that movement.
If anything the opposite is true, WSB has generally been proud to be a community where free thinkers can use homophobic, xenophobic, racist, sexist and predominantly mental illness slurs.
8 Likes