Hi, we’re going to review Freetrade to help you find out whether Freetrade is the right investment platform for you!
We recommend Freetrade if you are an investor looking to build a long-term portfolio of stocks and ETFs with low fees. Freetrade is a mobile-only commission-free UK stockbroker founded in 2016. It is the UK equivalent to Robinhood, the famous US free-trading broker, and it is a great choice for beginners to benefit from the stock market.
Although Freetrade is still only available for UK residents, the company plans to finally expand to Europe (you can follow the all-new developments here).
That’s Freetrade in a nutshell. If you want a more detailed review about the company keep on reading, here’s what we’ll cover:
1. Freetrade Overview
“The stock market doesn’t have to be prohibitively expensive or complicated”
Freetrade Review – Overview
Freetrade lets you invest in more than 5,000 stocks, including ones from the US, UK and other European countries, +200 ETFs, +150 investments trusts, +200 SPACs and +160 REITs commission-free!
They operate under a freemium (free+premium) business model. For £9.90 a month, users get extra features, such as 3% interest on cash, up to a max deposit of £4,000, limit orders, the ability to set stop loss, more stocks, priority customer service, etc.
Freetrade recently raised £3,7M (379% of goal) on Crowdcube – an equity crowdfunding platform where you can invest in startups that are not listed in the stock market or publicly traded. This was also Crowdcube’s record for the fastest time ever to raise £1M (77 seconds).
2. Freetrade Pros and Cons
Pros
- No minimum deposit
- ISA and SIPP account
- No inactivity, account or withdrawal fees
- Free stock and ETF trading
- Great community (forum) – where users share ideas and learn about investing
- Nice and user-friendly app
- Very transparent on everything
- You get a free share of up to £200 if you invite a friend with your code, and so does he.
Cons
- Limited asset classes (only stocks, ETFs, REITs and investment trusts)
- Limited research and education
- Graphs and portfolio tracking still need some development
- No web or desktop platform
- No phone support – however, live chat support is very fast and efficient
- No 24/7 support
3. Freetrade Instruments and Markets
Freetrade has over 5,000 of some of the most popular Stocks and ETFs from UK and US exchanges, plus hundreds of German, Finnish and Dutch stocks, including airline giant Finnair, lift maker Kone and brewing powerhouse Heineken. You can check their full product listing in this spreadsheet link. They are updating it all the time, and you can even request new products through their forum or see what’s next through their roadmap.
Besides, it gives you access to +150 investment trusts (similar to closed-end funds in the US). These are financial products managed by professional investors that help you benefit from diversification across geographical areas and market sectors. Freetrade includes the most famous ones, including the Smithson Investment Trust plc or the Baillie Gifford US Growth Trust.
It is also possible to get some exposure to the real estate market through over 160 REITs (Retail, Mortgage, Equity, HealthCare, Office,…). The idea is to expose you to an asset class that otherwise would be difficult to get into due to high costs and the right expertise. In other words, Freetrade lets you invest in residential or commercial real estate without the hassle of buying and managing the properties yourself.
Although we do not consider it as a “typical” asset class, it is worth mentioning that you can invest in over 200 SPACs through Freetrade. A SPAC is characterized as being created in “thin air”, meaning that its sole purpose is to raise money and acquire an existing business. That’s why they are known as “blank check” companies.
While these are great for beginners, more advanced investors may prefer a broker that offers a complete product portfolio. It lacks other asset classes, like mutual funds, bonds, options or cryptocurrencies.
Freetrade Review – Instruments and Markets
4. Freetrade Fees Snapshot
Freetrade Review – Fees
Basic Trades: Trades that are only executed at the end of the business day each day, at 4 pm.
Instant trades: Market trades, executed instantly.
5. Freetrade Account Types
Freetrade offers four account types:
- General Investment Account: basic account for stock and ETF trading.
- Freetrade Plus (£9.99/month): Everything in your existing Freetrade basic account, plus other perks like limit orders, more stocks, priority in customer support and much more!
- Stocks and Shares ISA (£3.00/month): tax-efficient savings account for UK residents, which is essentially the UK equivalent of an IRA).
- SIPP (£9.99/month): tax-efficient pension savings that you fully control (enables you to choose and manage the investments made).
6. Freetrade Safety and Regulation
Freetrade is regulated by the FCA in the UK (with license number 09797821), a top-tier regulator, and offers investor protection up to £85,000 by the FCSC. It is also audited annually by PWC. Despite being a recent company, these are good signs of safety.
7. Freetrade Supported Countries
Freetrade is currently only available in the United Kingdom. However, they have plans to expand to Europe over the next year: you can follow their updates and country expansion plans here.
8. Freetrade Users Feedback
To assess and rate Freetrade’s in terms of users feedbacks, we use its Trustscore from Trustpilot. A broker’s TrustScore is a measure of customer satisfaction based on service reviews collected on Trustpilot. It’s not just a simple average of its reviews (to know more about how it is calculated, click here).
Based on 50+ Trustscore measures from 50+ well-known online brokers, we’ve calculated that the average broker’s Trustscore is 3.6 out of 5.
At the time of writing this, Freetrade was rated 4.3 out of 5 based on +2,300 reviews on Trustpilot. To read the full reviews made by its users, click here.
What do you think of Freetrade? Let us know in the comments below.
