Freetrade makes it easier to lose your money on the stock market

gordon gekko and bud fox holding a phone with freetrade

Gordon Gecko. The Wolf of Wall Street. Christian Bale’s portrayal of Michael Burry in the Big Short. These characters embody the public idea of ruthless finance types who will use every trick in the book – including cheating pensioners out of their money – to make their own millions.

To that roster of characters I’d like to add me, Conrad Quilty-Harper, blogger, digital editor and the proud owner of £636.36 worth of stocks, commodities and bonds. I’m not going to make millions with my tiny pot of money, but to own those shares at least I didn’t have to move to Wall Street, don a double-breasted suit or set up an ISDA Master Agreement*: I simply downloaded an app on my phone.

Yours truly and my £199.28 Freetrade stock portfolio, back in December 2018.

This is a review of Freetrade.io, a new app, based in London, which allows its users to access a selection of shares available to buy in the UK and abroad. With a few touches and a thumb press, you can buy and sell shares, and have a very good reason to reinstall the iOS Stocks app.

Of course it’s always been relatively easy to buy shares if you really wanted to. MoneySavingExpert has a brilliant list of some affordable options. The difference with Freetrade is that, as the name suggests, it’s free to trade.

When the app launched, free trades used to be limited to 4PM every day, and you had to pay £1 per trade if you want to do it “instantly.” They’ve since made instant trading free. That compares remarkably favourably with existing competitors like AJ Bell (from £1.50 a trade), Interactive Investor (£7.99), X-O (£5.95) and Hargreaves Lansdown (£5.95, but you have to make more than 20 trades in one month). Some of these more established companies have reduced their prices since Freetrade launched, but that also might be to do with commission-free trading options from Revolut and eToro, and low fee options trading apps like BUX and Degiro.

What none of those more expensive or complicated options offer is a process as seamless as Freetrade. If you have online banking already, to gain access it’s only slightly more complicated than signing up for Netflix. Put in your details, your National Insurance number, transfer some money to a bank account, and within a few days you’re able to buy shares.

I’ll use this animated gif to show you how many touches it takes to sell my £13 worth of Vodafone shares.

Not many.

The app still isn’t perfect, nearly two years since its launch. It does a lot of those annoying fintech things like not put an axis on its charts (WHY?!) and uses language that developers think are cute but actually make you question whether you should give them your money at all (e.g. BT’s listing in the app is described as “slow internet”). On the other hand, when I encountered a bug they fixed it within a day and sent me a chat message within the app.

I signed up to Freetrade simply to play around with the app, but as the app has developed and the company continues to add new shares (the roadmap is quite comprehensive) it has started to replace my other investment platforms. I’ve even invested in the app itself via one of its Crowdcube funding rounds.

One final thing: Freetrade made me realise how poor most of the news and information is there about the stock market for retail investors. You can use the iOS Stocks app, for instance, but that often has no recent news about relevant companies. A better source is the FT’s Markets section, but again their coverage isn’t universal. Surely there’s an opportunity there…

More information about Freetrade and investing apps in the UK

Can I use Robinhood in the UK?

Not at the moment. Robinhood, a similar app which launched in the US in 2013 and also offers “commission-free” trading, has “indefinitely postponed” its UK launch. The company announced in August that it had regulatory approval to operate as a broker in the UK and it planned to allow UK customers to buy and sell shares from 2020.

What is Freetrade app?

Freetrade is a stock and shares investment smartphone app which allows you to trade for free. The company is still an early stage start-up, and has raised money several times using crowdfunding platform CrowdCube. More than 200,000 people have accounts with Freetrade, and it’s been operating for nearly two years.

How can I trade for free?

It’s possible to trade “for free” using Freetrade, a mobile app which lets you invest in a limited selection of stocks, shares and exchange traded funds (ETFs).

How can I get Freetrade?

Sign up to Freetrade with this link and you’ll get a free share. Here’s some more information about the offer.

Further reading if you’re interested in finance

• Reddit’s UKPersonalFinance is fascinating if you’re interested in money

You really should be reading more about pensions 

• Better Have My Money is a very entertaining newsletter by a newbie investor

(This blog was originally published in December 2018. *A plot point in The Big Short.)