Freetrade Review
  • Value
  • Ease of Use
  • Security Offerings
3.7

Summary

Have you been interested in trying the U.K. based broker, Freetrade? Freetrade offers free stock and ETF trading, but there’s more if you’re willing to spend. Read through Freetrade’s pros and cons and decide for yourself. We’ve done the research, read our review of Freetrade now.

About Freetrade

Freetrade is a UK-based brokerage that offers free stock and ETF trading for a majority of UK stocks and growing number of US stocks. The platform is a direct competitor to Robinhood, the popular mobile-based free brokerage based in the US.

Trading with Freetrade truly is free, as long as you don’t mind your orders being executed in bulk at the end of the trading day. Freetrade has a long way to go in terms of stock analytics and portfolio management, but the company is gaining popularity as it expands its offerings of US stocks.

Trading with Freetrade

Pricing

Signing up for a Freetrade brokerage account is completely free, and so is trading stocks and ETFs. However, there are some paid features and fees within Freetrade that are worth knowing about.

Free trades only apply to “basic” trades, which are executed in bulk at the end of each trading day. If you want your trade to be executed immediately, you’ll be charged a £1 fee per trade. Bank transfers are also free if you don’t mind waiting a few days to receive your money from Freetrade, but same-day transfers carry a £5 fee. Finally, exchanging currencies to place orders for UK stocks from the US or US stocks from the UK entail an extra 0.45% charge above the current exchange rate.Freetrade Pricing

Freetrade is also planning to add an “Alpha” service in the near future, which will likely be paid. However, there are no details available about this service yet.

Trade Execution

Free trades within Freetrade are called “basic” trades, and they’re executed at 4pm each day rather than instantaneously when you place the order. You’re responsible for any differences in price between when you placed the order and when it executes, although Freetrade does give you some options.

First, you can elect to automatically pay the share price if it’s higher than what you ordered. Second, you can elect to set a maximum total purchase value, which will adjust the number of shares purchased according to the price at the end of the day. Third, you can set a limit on your order – if the stock price is higher than your limit price at the end of the day, your trade will be cancelled.

Freetrade does offer instant trade execution, but it comes with a £1 fee. Still, this is far cheaper than most traditional brokerages.

Available Stocks

Freetrade currently offers trading for most stocks and ETFs on the London Stock Exchange and for hundreds of US-based stocks and ETFs on the New York Stock Exchange. The platform keeps a list of all stocks currently available for trading in a publicly available Google spreadsheet. Freetrade is continuing to expand its offerings of US stocks in order to compete with platforms like Robinhood and Webull.

Freetrade Features

Mobile App

Freetrade, like Robinhood, is a fully mobile-based brokerage with apps available for both iOS and Android. The app is extremely streamlined and user-friendly, but don’t expect anything like the tools you would get with a traditional brokerage.

Freetrade makes it hard to dig into the details of your portfolio, instead showing you a chart of the percentage gain or loss in your portfolio over time (the time axis is not labeled). You can see how individual holdings have performed over multiple timescales, but there is little ability to dig into stock news, upcoming financial events, or fundamental information about stocks you hold or are researching. There are also no technical charts whatsoever within the Freetrade app. Freetrade Dashboard

The Discover section of Freetrade is interesting, though. This is where you can search for individual stocks and ETFs by name, but it offers more than that. The Discover tab will highlight stocks that are “trending” – presumably because they are trading heavily, although how Freetrade chooses trending stocks is unclear. It will also show you companies similar to those you are currently holding in your portfolio. Overall, the Discover feature of Freetrade’s app is a suspect way to find new stocks, but it’s worth looking through to see what’s available to trade for free.Freetrade Discover

One of the more useful features of Freetrade’s app is the Activity tab, which keeps a list of all your transactions through the brokerage. Unfortunately, there’s no way to export this data, so you’ll have to manually copy it over into a spreadsheet if you want to track your portfolio performance.Freetrade Activity

Investment Savings Account

One of the big draws to Freetrade is that the brokerage allows you to open and trade through an Investment Savings Account, which is essentially the UK equivalent of an IRA. Currently, ISAs are free, but Freetrade will transition to charging £3 per month per ISA in 2020.

Platform Differentiators

Right now, Freetrade doesn’t have any competition in the UK. That’s unlikely to last for long, since there are reports that Robinhood is planning to expand to the UK in the next year or two. Unfortunately, UK citizens can’t open Robinhood accounts at this time and US citizens can’t open Freetrade accounts.

But assuming the two are soon to compete directly, there are a few important differences. Robinhood offers instantaneous trades for free, whereas Freetrade charges £1 per instant trade. Robinhood also includes basic stock news, although it’s hardly a stock news platform and often lags far behind platforms like CNBC for breaking stories.

Perhaps the biggest difference will be in what stocks Robinhood and Freetrade offer. Currently, Robinhood offers most US stocks and no UK stocks, while Freetrade allows trading of most UK stocks and a few hundred US stocks. Robinhood also offers option and cryptocurrency trading, something that Freetrade seems unlikely to match in the near future.

What Type of Trader is Freetrade Best For?

Freetrade is best for UK-based traders who want access primarily to UK stocks and don’t mind waiting until the end of the day for order execution. Ideally, the platform is a low-cost option for beginning traders and retirement savers who can take advantage of cheap ISAs.

Freetrade is still cheaper than most traditional brokerages for instant stock trades, but most advanced traders will be turned off by the lack of research features, stock news, and portfolio management tools in Freetrade. Limited access to US stocks and advanced products like options is also a major disadvantage to Freetrade compared to other brokerages.

Pros

  • Free end-of-day bulk trading
  • Instant trade execution only costs £1 per trade
  • ISA accounts are available for free (until the start of 2020)
  • Most UK stocks and ETFs, and major US stocks, are available
  • Extremely user-friendly mobile app

Cons

  • Limited selection of US stocks
  • Almost no technical, news, or research features
  • Portfolio management is extremely basic
  • Limited to mobile platform
  • No support for mutual funds, options, or cryptocurrency