Freetrade (3/5)— Cheap stocks ISA review

Freetrade is a relatively new startup that provides low cost trading for ETFs and stocks. It has disrupted the UK “do it yourself” stock trading market by providing almost free trading. I’ve been using it for a year now and wanted to share my experience. I’ve also been using trading212 lately and it’s competing heavily with the pricing model of Freetrade.

Note: Trading on your own is very risky. You may lose all your money. I’m not a financial adviser. The below is based on my personal use of the app and is true to the extent of my knowledge.

Summary ratings

Overall rating: 3/5
The saying “you get what you pay for” applies here. The platform has very basic capabilities compared to its direct competitor (Trading 212) and existing established trading platforms. It is still a start up and I’m super excited about it, but you need to be aware that the tools and capabilities of the platform are still nascent. The cost is cheap but everything else is still too rudimentary.

Ratings break down:
Ease of use: 5/5
Cost: 4/5
Stock info: 2/5 (bare bones)
Portfolio management: 2/5
Trading capabilities: 2/5

Costs

The trading costs are listed on the freetrade website.

Compared to other low cost brokers for ETFs and shares:

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Other costs to be aware of that all brokers have :

Stock information

Every trading platform provides some amount of information about a stock and its performance. Freetrade provides the bare minimum and doesn’t include details such as stock performance KPIs (ROE, EPS, …), trading volumes, financial statements. You’ll need to get that information from the internet. I’ll list out the information you get below:

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From left to right: Stock overall gains and losses over a period of time, Overall gains and losses, Key information document and basic stock information

Portfolio Management

When investing, you’ll need to have an overview of how your overall portfolio is doing. Is your portfolio losing or gaining money, is it high risk and high growth or balanced. Freetrade provides the bare-bones again, showing overall gains and losses, high level sectors and investment categories, and that’s it.

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Trading

The trading experience is simple and straight forward. Search for the stock in the “Discover” tab, specify the amount in GBP, and your order will be executed as either a basic order if the market is closed or an instant order if it’s open:

There are no advanced options such as limit orders and stop losses. However, the upcoming “Freetrade Plus” account, which costs 9.99 per month, will provide the limit order and stop loss options. Although at that price points other brokers might be cheaper long term.

A few ideas that would make Freetrade better

I’m pretty sure most of the below is on the roadmap of freetrade but adding them here in case they aren’t :

Note: Trading on your own is very risky. You may lose all your money. I’m not a financial adviser. The information is based on my personal use of the app and is true to the extent of my knowledge.

Sources:
https://www.trading212.com/en/Trading-Conditions
https://freetrade.io/pricing
https://www.youinvest.co.uk/isa/charges-and-rates

A tech focused investor and engineering manager

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