FreeTrade App Review

Unless you’ve been living under a rock, you’ll probably be aware of FreeTrade. Here’s my own views and experiences of using it over the last few months.

For clarity, there are affiliate links to FreeTrade in this post. If you click and sign up we’ll both get a free share worth somewhere between £3 (more likely) and £200.

I first became aware of FreeTrade when it was talked about in the FI community by a number of people, most notably Weenie. I am not keen to be an early adopter and sat it out when people were getting very enthusiastic about it. I decided to take the plunge a few months back when I was out of work between projects and thought that a few blogs with a running commentary on green energy stocks would make good reading. I opened an account and got a free share (and Weenie did too!), deposited £200 to get a hang of things and went on a shopping spree.

FreeTrade Background

Think Pink

FreeTrade was launched in 2018 with the aim to make stock ownershi accessible and affordable for all and their simple idea was that trading should be free. For too long brokers have gouged their customers on every simgle trade that you make. Costs of stock trading are actually in the pennies but companies like Hargreave Lansdown still charge a tenner or more – making it a very profitable business for them.

FreeTrade changes that and allows investors with as little as £1 to start investing themselves and it very much democratises investing for millennials. You can invest in shres and ETFs on a variety of markets like London and the US. It is app based and from my experience, the customer service is second to none. To sweeten the deal, FreeTrade are offering a free share worth at least £3 if you sign up with this link (and so will I). It’s easy to get started and the app is good to use (even for old folk like me).

Pros

  • Low cost trading – you can’t believe how much money you might throw away on trading fees over the years. Traditional companies like Hargreaves Lansdown will charge you around a tenner for a trade. Make one trade a month and over 25 years that’s £3000. Ok, you can go for a regular investment (in a narrow range of stocks/ETFs) but you’ll still be paying £1.50 a pop and that’s £450 in 30 years (and all before compounding!). So, the fact that FreeTrade let’s you trade for free is a real bonus – that’s the main attraction.
  • Wide range of stocks/ETFs – you have got a very wide range of what you can invest in.
  • Nice look app – older platforms feel very outdated especially on your phone. The FreeTrade app is great for those who are digital natives and want to use their phones to invest.
  • No CFD upsell – unlike some places (like Trading212) there is no upsell into CFDs, although there is the option to sign up for FreeTrade Plus (£10/m), the ISA (£3/m) and SIPP (£10/m), all competitively priced.

Cons

  • Superficiality – I suspect most investor judge shares by their logos (just like books for luddites like me. Detailed stock info. is not available. Good for millennials I guess but I’m old-school.
  • Active vs. Passive – you’ll be tempted to become a stock picker unless you can keep a level head and stick to your passive plan. Unless you like active trading, in which case fill yer boots!
  • Stamp Duty – this is maybe a bit minor but you pay stamp duty on shares but not ETFs. If you start to take an a la carte approach to your portfolio you’ll be paying out a lot of 0.5%s.
  • It’s only on your phone – A desktop version is not available, so it’s phone only. I don’t like the idea of having my investments available at just a few taps. It might make tinkering (and making things worse) very tempting.

My Experience so far

So far so good, I’m up about 40% which is totally down to my own superior stock picking skills. You don’t seem to get a lot of junk email from FreeTrade, although they have let me know that I’ve had dividends paid.

Paying money in is easy to do once you have a debit card and even from my bank account to FreeTrade, the transfer time was a few minutes before the funds had cleared. Taking money out was fast, I think that they said it would take 24 hours for the money to appear but it was there in minutes.

So far, I’ve just used the General Investment Account which gives taxable gains but there is also a FreeTrade ISA and SIPP (newly released). In an upcoming post, I’ll write about the SIPP as there is a transfer offer in place which is potentially very lucrative and if I were to take up on it, it would mean a shift from AJBYI (whom I am quite happy with) to FreeTrade (whom I am also quite happy with).

Portfolio Screen showing my winners (and loser)
My performance to date showing my super Alpha performance vs. VWRL!

Overall

FreeTrade is a very nice product and if you are starting out investing now, you should consider using this as your main/only investment platform. There are other platforms like Nutmeg which offer a simpler put money in and we’ll invest it for you approach but FreeTrade gives you the ability to invest for yourself. If you choose to just stick it in a small number of low cost ETFs, bet big on Tesla or scattergun it across every stock of the day, it’s up to you.

If you are an existing investor at legacy platforms, the hassle of moving over might not be worth it but getting a free share from starting an account is a bit of a sweetner – so maybe give it a go and see if you like it. If you have any questions or comments, we can continue the dicussion in the comments but for the sake of brevity, that’s all.

Thanks, GFF

12 Comments

  1. Nice review.

    I wasn’t going to do a SIPP transfer but I will save in fees if I transfer my HL SIPP to Freetrade. The free share will be a nice bonus.

    I believe a desktop version is in the pipeline at some point which will be a lot handier – as you say, with it being on your phone, there is the real temptation to tinker with your investments.

    I have my GIA for such tinkering purposes – my TWRR on that is +59.72% vs VWRL +13.45% so yes, that’s me doing my Alpha thing haha!

    My ISA (which I don’t tinker with) is pretty much on a par with VWRL which I’m happy with.

    Liked by 1 person

    1. I am reviewing the SIPP transfer choice right now and it is not clear cut if it’s worth it – maybe to avoid HL but the savings are not massive but if you can pick up a share worth around 1% of your transfer then it’s good (assuming that you don’t have prohibitive exit fees on your current broker)

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      1. No fees to exit my HL SIPP, although I intend to sell the funds myself first, so it’ll just be a cash transfer.

        The savings in fees aren’t massive but will increase as I continue to add to my investments.

        If I’m not happy with the Freetrade SIPP, I could always transfer back after a year (minimum holding period to keep the benefit of the free share).

        Like

      2. it’s maybe different for funds from shares/ETFs which is what I have.
        I am just shy of the £2000 share for my SIPP and £700 is nice but I reckon with patience (and growth) I might be able to nab Amazon if the promotion continues.

        Liked by 1 person

  2. I’m a big fan of Freetrade. I like what they’re doing without having to add that gambling, options trading element to its platform like T212 to attract people to it.

    Only offering US and UK stocks still is a bit rubbish but I suppose you could cover Asia and Europe in ETFs. I think Freetrade Plus is very steep though and I’m going to have to sell out of one of my holdings as I have just been notified it’s moving to the Plus only side of the platform. I think you can keep hold of it if you already own it, but just can’t buy anymore which still isn’t too helpful.

    As much as I like the app, and know it’s FCA regulated, I can’t quite bring myself to move any serious money over like a SIPP or my main investment account.

    It’s a great app though and good to see another FIRE-ee trying a few individual shares as a bit of fun 🙂

    Liked by 1 person

      1. Definitely it is very tempting. It’s why I’m always adamant with myself that it’ll only ever be my ‘fun’ account 🙂

        Liked by 2 people

    1. For example one of the free shares i got was an Msci India tracker (value £3.71) and that’s good enough for me to give me exposure to India- if i wanted to buy more I can.
      However, I don’t want to be picking Indian stocks as I don’t have the time or abilities to do a good job of it.

      FreeTrade Plus? It seems a bit steep and if like me you use a number of platforms, paying a standing charge is a no no. If you are going just FreeTrade then it’s maybe value for money.

      Like

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