In this Freetrade Review for 2022, we take a deep dive into one of the top UK fintech investment platforms for retail investors. With its freemium model remaining an attractive proposition for cost-conscious consumers, we analyze the variety of features the platform has to offer. Plus, we take a look at their security, regulations, fees, support, pros and cons.
With ambitious growth plans for this year, including a keenly anticipated expansion into the European market, our 2022 Freetrade review asks; does the company still represent good value for consumers? Or should savvy investors be looking elsewhere?
Freetrade Review: How to Use Freetrade to Invest?
Freetrade Pros & Cons
What is Freetrade?
Founded by Adam Dodds, Viktor Nebehaj and Davide Fioranelli, Freetrade is a fintech firm providing investment services to customers in the UK. Touted as a ‘challenger stockbroker’ upon launch, they recently surpassed the 1.1 million customer mark, cementing their position as a household name in an evolving financial landscape.
Winning multiple awards for its services and netting over £10 million in crowdfunding, the company’s mission to ‘get everyone investing’ has usefully coincided with a pandemic-led boom in ‘retail trading’. Having recently hit £1 billion in assets under administration, it seems more and more customers are being attracted to Freetrade’s commission-free model. So what contributes to their mass-market appeal? Our Freetrade review lifts the lid on their offering.
When registering with Freetrade, customers can choose between three account types, including tax wrapped vehicles such as a Freetrade ISA (individual savings account) and Freetrade SIPP (self-invested personal pension), or a Freetrade GIA (General Investment Account).
General Investment Account
Stocks & Shares ISA
For parents looking to kick start their children’s investment journey, a Junior ISA option is unfortunately not currently available through Freetrade. In a community post on the topic, Freetrade cites a lack of demand as the key reason for not incorporating this account type. But with competitors including Wealthify and Nutmeg providing JISA accounts, consumers might be forgiven for looking elsewhere for a more comprehensive account offering.
Freetrade Investing Options
As its name suggests, Freetrade offers zero-commission trading, with no inactivity fee, no withdrawal or deposit fees, and no share dealing fee for its General Investment Accounts. Its upgraded accounts charge a small flat fee per month for those looking to take advantage of extra benefits like tax breaks and enhanced features. Additionally, FX conversion rates are charged at 0.45% above the spot rate, so be mindful when investing in global stocks!
Freetrade’s account options can be viewed below, along with their monthly account costs.
|General Investment Account||Stocks & Shares ISA||Self-Invested Personal Pension||Freetrade Plus|
Freetrade vs Freetrade Plus
Freetrade’s Plus account provides a premium tier option to access extra features. Priced at £9.99 per month, Plus includes enhanced trading functionality such as Limit Orders and Stop Loss Orders and offers hundreds more instruments to trade from. In addition, Plus users earn 3% interest on cash up to a maximum deposit of £4000, allowing investors to make money even without opening any positions.
To protect its growing user base, Freetrade maintains strict security protocols. These include:
- Segregated Client Funds: Client money is held in a separate bank account to avoid commingling of assets.
- Safeguarding of Assets: In the unlikely event of Freetrade going bankrupt, users will be compensated up to £85,000 via the Financial Services Compensation Scheme (FSCS).
- Regulated Conduct: As an FCA-regulated business, Freetrade is obligated to meet all of the rules and regulations set by the FCA, including all the client protections those rules require.
To help maintain its low fees, Freetrade recently announced the introduction of securities lending, which will apply to GIA and SIPP customers. Despite receiving some backlash online, the company remains upfront about the risks involved, however minor. A recent explainer article on the topic emphasised the prevalence of the practice, with most prominent financial institutions lending shares to third parties. Whether or not this is enough to prevent users from seeking another provider, only time will tell!
Freetrade holds a license with the Financial Conduct Authority – the UK’s regulatory authority. Considered a top tier regulator, FCA holds the company to rigorous standards to ensure the safety of its clients and the healthy functioning of the broader financial market.
Recently, Freetrade fell foul of the authority’s Conduct of Business regulations after an influencer working for the company suggested consumers in debt could use the platform to make money. Freetrade was served with a supervisory notice and asked to remove the offending content from all social channels. Lesson learned.
Earlier this year, Freetrade obtained regulatory approval to enter the Swedish market, with its financial regulator Finansinspektionen giving the go-ahead to offer its products to retail investors there. Users in Sweden can now join the company’s online waitlist to receive updates about Freetrade’s anticipated rollout.
Freetrade’s customer support team can be reached via live chat or email. While response times are impressively quick during the day, its lack of 24/7 support could prove problematic for those requiring help after hours. Additionally, no dedicated phone service is provided. So if you’re not a fan of written communication, Freetrade’s support options might leave you feeling slightly frustrated.
Freetrade’s live chat feature can be accessed in-app, with questions typically answered within a few minutes. The chat window resembles any other instant messaging platform with its smart user interface, creating an atmosphere of familiarity for smartphone users.
Opening an account with Freetrade is quick and easy. As with most online brokers, you’ll need to provide a few personal details and valid proof of identity before your account can be registered. The process will take around 10 minutes, with the following information required:
- Name, address, telephone number and email.
- Your National Insurance number.
- Proof of identity (passport or driving license).
- Financial information, like a card number, so that you can transfer money in and out of your account.
Once your account is created and verified, you’ll be taken on a quick app walkthrough, which will guide you through its key features. With a pleasingly gentle learning curve, users can get up to speed with the app’s functionality in just a few minutes.
Freetrade Referral Code
To kick start your trading experience, Freetrade is offering* new investors a free share worth between £3 and £200. Take advantage of this offer by using our referral code below:
Some of the Freetrade alternatives are eToro and Hargreaves Lansdown.
Freetrade vs Trading 212
With its USP of low-cost DIY investing, Freetrade shares the field with a few other names in the fintech industry, chief among which is its London-based rival Trading 212. For this Freetrade review, we’ve pitted Freetrade vs Trading 212 to see how each offering compares.
To help inform your decision, we’ve created a comparison table to assess the primary features and benefits of Freetrade vs Trading 212.
|Platforms||Mobile App||Mobile App|
|Fees||Basic account – free|
ISA – £3 per month
SIPP – £9.99 per month
Freetrade Plus – £9.99 per month
Currency conversion charge – 0.45%
|No platform charge for ISA|
Currency conversion charge – 0.15%ffffffNo platform charge for ISA
Currency conversion charge – 0.15%
Offering commission-free investing via a suite of account options, Freetrade’s pricing continues to undercut most other DIY investing platforms. Despite remaining light on trading functionality and analysis, fledgling investors desiring simplified market access will find a lot to love in the platform’s clean and accessible user interface.
Platform-wise, with its crystal clear interfaces and pleasurable user experience, Freetrade’s app is one of the best we’ve seen. But while many casual traders will be content with its mobile-first approach, those looking for a more fleshed out investment broker would understandably be tempted towards other providers on the market.
Deposits can be made using Bank Transfer and Google/Apple Pay.
Freetrade’s headquarters are located in London, United Kingdom.
Right now, Freetrade serves only customers in the UK. It will shortly offer its products and services in Sweden, where it now has regulatory approval.
While its basic accounts are free, Freetrade operates a freemium model, with other account types incurring a subscription fee. Additionally, Freetrade charges a foreign currency transaction fee.
Here are some of our articles you may also find helpful;