I’ve been thinking about what would incentivise me to pay for Freetrade and I thought it would be interesting to get a discussion going in the community.
For me, the following three points are crucial but what are the key barriers for you?
Costs: In the interests of accessibility, I think the annual Isa fee needs to be priced as a percentage and capped at £36. Otherwise, the very smallest investors lose the biggest amount of their investment to costs. If, for example, I want to buy one share of a Ftse 100 tracker, such as VUKE, to get started – I’m down more than 100% already which can’t be right. To my mind, anything over 1% is obscene and acts as a major barrier to newbie investors. I think there’s a very strong case for percentage-based fees all round – especially as Freetrade’s supposed to be all about equitable access.
Features: Assuming I have enough capital for £7/10 a month to be competitive as a percentage with the likes of HL and Vanguard, what’s going to make me pay for Alpha is features. For starters: I wouldn’t sign up if I had to pay extra for an Isa, extra for instant trades, extra for US trades, Euronext trades, et cetera. A premium account should include as many as premium services as possible. I’d want all the bog standard broker features such as stop-loss/limit orders and a web interface too. I also think Freetrade’s offer needs to go beyond traditional brokers’ wherever possible. The more innovative and exclusive features that Freetrade introduces, the more likely I am to pay for the privilege.
Range: Third and finally, if I’m going to pay for Freetrade, I want access to as many securities as possible. Competitors offer thousands of choices compared with 300-odd in the so-called securities universe. This is a dealbreaker: after all, what good’s a platform that doesn’t offer the stocks I want?
*The above is not intended to be overly negative, it’s meant to be an honest critique. It’s early days, I know, but I think it’s important for Freetrade to iterate fast. As an investor, albeit with one with 20 shares, as well as a customer, I want Freetrade to succeed.