Finance

Exclusive: Britain’s first challenger stockbroker has been authorised

By Oliver Smith 26 October 2017
Summary

The FCA has given Freetrade the greenlight.

Freetrade, the fee-free stock trading app, has just passed a landmark on its mission to turn Britain into a nation of shareholders.

During a recent visit to Freetrade’s headquarters in Soho, CEO Adam Dodds told The Memo that the Financial Conduct Authority has given him approval to launch.

“We are now a directly authorised financial institution,” said Dodds.

“We’re also in the process of joining the London Stock Exchange, and Crest Euroclear, where all the securities in the UK are stored digitally.”

In much the same way that challenger banks like Monzo and Starling are tearing up the rulebook of banking, Freetrade plans to change the way we buy and sell stocks by offering fee-free trading.

Compared to Hargreaves Lansdown, which charges £12 to buy or sell a stock, Freetrade won’t charge anything for what’s called ‘end of day execution’ – where your order isn’t a priority and you get it at whatever price it is at the end of the day.

‘Live trading’, when you want to buy or sell immediately, will be available with a small fee of £1 per £1,000 worth of stocks or shares being bought – massively undercutting traditional fees.

And now, on paper, Dodds says Freetrade now has everything it needs to put its plan into action and become Britain’s first fully regulated challenger stockbroker.

Read more: Freetrade – Anyone can be an investor for as little as £1

The new challenger

As we covered earlier this year, Dodds’ smartphone app will makes buying a share in Netflix, Apple or Just Eat either free, or extremely cheap to do.

It’s part of his mission to drive shareholding in the UK back to the levels of 1963, when over half the population of Britain owned shares.

Today just 12% of Brits own shares, and among under 35s that figure is believed to be a paltry 1.5% using Stocks & Shares ISAs.

With 15,000 people on the waiting list for Freetrade, Dodds is confident he’ll be successful, but admits the app’s launch has been pushed back to January 2018, following a family and friends beta over Christmas.