There’s an interesting discussion going on on the Monzo forums asking about which Investment app is best. Points I found quite interesting:
Freetrade is seen as competing with roboadvisors like wealthify or nutmeg
Beginner investors get very confused and intimidated by jargon like pe, etfs or picking individual stocks
Beginner investors often gravitate towards funds with fees on the assumption that professionals must know best
This reinforces my feeling that to really expand to a mass market freetrade needs to also offer some far simpler unmanaged product which lets you invest monthly in any market (global, uk, or usa say). Many people are really intimidated by picking stocks or jargon like etfs.
Well I do think they use jargon a little, for example a new investor signs up goes to discover tab and is confronted with refs to etfs, ultrashort maturity bonds and infrastructure funds at the top of the list, and I do think the guidance for new investors could be improved. I sort of understand what ultrashort bonds are but have no idea whether I would want to buy them or when.
Just a really simple option to invest in global stocks or something would help a lot I think.
Webull’s worth a shout, it complements Freetrade well. I don’t think you can buy though it yet in the UK, but it’s packed with handy features for tracking a portfolio, markets, commodities, currencies and so on.
I think it’s helpful to think of this from the point of view of a beginner investor.
You hear about investing and how it is a good idea, you try out a few apps - other apps guide you through setting up a monthly payment, a few questions about risk (though personally I think those are a waste of time) and you’re done, you’re now an investor in the stock market.
Sign up for freetrade, and you’re confronted by a list of ‘ETFs’ and stocks to buy. You don’t know what an ETF is, or how to pick stocks. Even the distinction between stock indexes (with strange names like S&P 500) and ETFs is confusing at first. You have no idea what to do and just close the app in confusion.
Blog posts are not going to help you unless you want to learn about stock picking, and only then after quite a long journey. Many people won’t complete that journey through lack of time, money or inclination and would be helped by something simpler, even if later they choose to pick their own stocks etc. The evidence for this is found on this forum too in posts by beginners frequently asking what they should buy. Freetrade can’t advise them, but the way choices are offered does subtly guide people.
I agree better discovery would be nice (for everyone, not just beginners), but that’s not enough IMO - I think it would be helpful to have better onboarding too - perhaps ask do you want to just invest or pick stocks, and guide them towards a simple monthly payment and global ETF if not.
I really like the freetrade service but as-is do not believe it is tailored for beginners as yet. This is not meant as a criticism of the freetrade team or product, just a suggestion which might help encourage people to use it who would otherwise turn to other products. I thought the discussion was interesting also, as it highlights how a newcomer to investing views these apps, and also how they view fees, and how that perception could be managed a little better.
Agreed. I really like Freetrade and started as a complete beginner with virtually no knowledge of investing or the jargon that goes with it, but I have had to put in significant time to get myself to a level of knowledge where I feel I have some idea of what is going on.
I was happy to learn, but I know so many people who would be put off by this aspect - Who don’t have the time, who arent interested in financial markets etc etc. I agree there should be more guidance for complete beginners
I really recommend DE GIRO, it has been around for a while - but being Dutch they do not support ISAs etc - and they won’t. Their UI is actually quite good, and far superior to FreeTrade at the moment.
there are separate tabs for ETFs, Funds, Stocks
they display break even point
they display closed positions and the breakdown of the stocks price movement AND currency movement
they display a ‘day difference balance’, as well as a ‘total difference’ so you know where you stand since you began trading and the days results.
they display a portfolio very concisely, the ticker, quantity, currency code, current price, total amount invested, and todays price movement in % and number in a very simple elegant way.
I don’t think a huge chart with performance on the main screen helps too much. We can work out numbers surely, eg 2100 for ‘portfolio balance’, with a ‘total difference’ of 400, implies ~ 20% increase.
I really want FreeTrade to continue and get better - I was frothing at the mouth for their Android app, but if they need pointers… just look at DE GIRO’s UI.
Would it be advice if users who haven’t traded yet were presented with a dismissable screen that sits before the standard discovery list and which says something like this?:
“There are funds which are usually called “etfs” - we have a [guide about them here]. There are also individual stocks. Here’s a [guide to dividends]. Here’s a guide about (etc). We cannot give financial advice because we don’t know anything about your individual circs but if you’re not sure what to invest in, consider taking a look at global index tracker etfs to get you started, and then learn from there.”
I’m getting pretty frustrated with the availability of information on stock performance on freeshare - either I find stocks I like on other stock comparison resources, but they’re not available to trade in freetrade, or they’re available on freetrade and hard to find for comparison in other locations.
I would suggest that there’s enormous potential to keep customers in the freetrade ecosystem if you offered an end-to-end experience without having to use external websites to work around the simplistic discover screen.