Freetrade 💸

Freetrade was the first stockbroker, designed for long term investors (so not you Trading 212), to launch commission free investing in the UK.

They make their money by charging fees for optional extras but if you want to, you can use their service to invest completely for free.

They’ll be facing some pretty big competition with Revolut (launched) & Robinhood (launching soon), getting into the action. Although both of those companies, as well as eToro & Trading 212 are building their services for traders, as opposed to long term investors in my opinion.

We’ll share their product updates & news in this thread.


full disclosure - I used to work for Freetrade :innocent:

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A couple of recent updates -

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It has the potential to become a very good stockbroker but they aren’t there yet.

Once the investment platform is complete and they’ve added on all the aspects it will be great. But as an investor I’m not convinced that spending all that money on free shares for referrals at this stage, before the product is ready, is wise. Data could prove me wrong though

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They are at the stage where they need to prioritise getting more users over shipping product features faster than they could, to justify their next raise from VCs, who care only about user growth I am afraid.

Nothing deadly wrong with doing this approach at all, just a choice between investor interest and user happiness

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I wonder what the CAC is with regards to the free shares. Most of them are very low value, probably costing around £5-6 on average I reckon. Compare this to Monzo’s £5 golden ticket referral programme and it is probably par for the course.

Monzo focused on customer growth over product development too, to make sure it had a strong share of the market, whereas a company like Starling did it the other way round and now is not used anywhere nearly as much as Monzo. So I can see why Freetrade have adopted this approach especially with Robin Hood coming in the not to distant future and Revolut launching soon.

I am an investor in and user of Freetrade but I agree, they need to improve the offering now, to keep all the new referral customers. There is not enough useful information on the app, the stock selection is fairly minimal and fractional shares need to be a big priority.

The community is really good though - well done @alexs!

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Like you, I am an investor and an user of FreeTrade. I wholeheartedly agree with your statement.

It was sensible to prioritise user growth through this referral program, but you have to keep your users as well. I am barely using it at the moment due to the limited stock universe, bare bones information on stocks and total lack of portfolio management functionality.

I fear they are at risk of hitting a point where user growth gets stymied due to slow velocity of development. Looking back over six months, there’s hardly been anything of note that has been released: some hygiene functionality which I still find super clunky like filters and graphs, and a slow drip feed of stocks.

I know they are working hard behind the scenes on the investment platform, but that can’t come soon enough now as big competition is seriously breathing down their necks. I am a massive supporter of them though, I do believe they can pull it off but the next six months will be crucial

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You hit the nail on the head there, I haven’t put through any trades on it for a while now either. I think they may also suffer a bit of a slowdown if we enter a recession and all the new users (let’s be honest, most of who will be new to investing) see a fall in the value of the shares they have bought / been given.

One reason I’ve stopped using it apart from the ones you’ve mentioned above, is because of the lack of limit orders. I put through a buy order but by the time 4pm rolled round the price had spiked massively and instead of the trade failing to fill (like it has in the past), it went through, buying less shares at a price significantly higher than I was comfortably paying. And sod’s law dropped straight back down again once I’d bought.

I raised the issue with customer service who said that it was unusual and they hadn’t seen it happen before so probably a one off. I pointed out they hadn’t been operating long enough to say it was a one off and given the increasing level of volatility would probably happen more. They finally got back to say Limit Orders are on the road map for 6 months down the line. But as you said there has been very little movement in the last 6 months against the roadmap so I’m guessing it may be missed.

Sorry, I should say very little visible movement. There is obviously a lot going on behind the scenes. Especially dealing with 2 crowdcube raises in as many months due to the crowdcube cock-up

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Freetrade just added recently viewed stocks to Discover, with sparklines for the stock prices, I wonder if they’ll use those elsewhere too -

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I do hope despite the hiccups to customer service as you outlined, Freetrade will succeed because I do like their brand and value proposition and most importantly a home grown UK brand who under just a few years was an unknown brand and today it is massively popular amongst British DIY investing community

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I hope so too! Even if I didn’t have a direct interest I still would like them to succeed. I think what they offer retail investors (a lot of who were sidelined by the larger financial institutions) is extremely valuable

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Looking forward to the Android version!

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This is interesting about Revolut and Freetrade

My worry has always been that trying to hit Monzo levels of growth is just not a realistic target. Everyone knows what a bank is and needs one. A stockbroker? Not so much

The hardest part will be making investment a normal thing. After that you then have to get the company name known

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Yes that’ll be a major challenge for Freetrade & co.

That story is built on a bit of a false premise though as revenue from ‘share trading’ aka the £1 fee that Freetrade charge for their instant orders, is only one portion of their revenue model. They’ll also make money from ISAs, their Alpha subscription model & who knows what else in the future.

Sadly in the longer term both Revolut and Freetrade might be disappointed to discover their share trading goldmine is a mirage.

They were never relying solely on this ‘mirage’ & they can already see how much revenue they should expect to earn from share trading at this point so they have time to make changes if necessary.

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Very true but there’s the real risk of an economic slow down post Brexit and the risk of Brexit halting, or at least slowing, the European expansion plans. When things are going well then Alpha etc are good potential revenue streams but in the bad times?

I hope they can grow and be successful as I like the product

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I think I might just stick with the classic ‘freedom pink’ though :thinking:

The blue investor is nice. Kind of matches the lagoon blue Monzo card

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Another update, for iOS users. It’s a shame you can’t choose two points on the graph to compare though as the 7D, 1M, 1Y starting point for the change in price can be quite arbitrary.

I asked on their forum why we can’t just have simple tick marks on the X-axis as well. Seems to me a bit of a case of form over function.

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I can see why they would do it. It’s a small space and you are trying to get it working on all devices.

However I have seen it done well on other apps, you can open up the graph in landscape view to see the full axis. However, that’s extra work. They have a half way solution showing you extra details as you tap over it, but with a finger it’s harder to be precise.

Interesting they use percentage as the main axis rather than price. For me personally the price is more immediately meaningful than the percentages. It is easier to fit on a graph though!

The joys of charts on mobile :joy:

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