LFP105 – Execution-Only Stockbroking in the Digital Age with Adam Dodds CEO Freetrade

The ultimate disintermediation in FS is for folks to directly buy shares/binds directly and cut out the whole investment management industry as we know it.

Even better if it’s cost free to deal. This amazing proposition is becoming real as Freetrade’s core offering gets rolled out to its first users and we are joined today by founder and CEO Adam Dodds to dive into this whole world.

Freetrade is a member of the London Stock Exchange but at the same time a real Fintech, designed from the ground up for the digital age of Fintech.

Topics discussed include: 

  • domain names and Fintech names
  • Adam’s career journey west and east
  • Japanese numbering systems
  • accounting thru to M&A Fintech
  • Adam’s challenges with investment account finding/opening in the UK hence filling the gap himself
  • fund raising rounds (inc the most over-funded equity crowdfunding ever) and staff growth
  • trading versus investing; instruments; holding periods in re
  • £1.8trn in investments in the UK of which only a tiny percentage is in ETFs rather than much higher fee actively managed investment funds
  • via Freetrade folks can invest for free in structures whose fees are in the low single figure basis points
  • investing in shares, ETFs vs CFDs and spread-betting
  • about 40,000 people in the Freetrade community (!); most of whom have not invested directly into stocks before
  • the gap for financial advice on investing in the Fintech world given the cost of IFAs offering advice
  • the need for tools to measure risk levels
  • how to choose which ETF to buy?
  • crypto as the “gateway drug” into getting into solid investments
  • individual share ownership trends over the decades
  • changing expectations around governments and pensions and hence the need to take care of yourself
  • £12 as the standard commission – this as a huge percentage if one is only investing small sums of money as many young people are
  • Freetrade’s freemium model – zero fees for end of day deal; £1 for immediate execution
  • the importance of a steady rollout of a new platform
  • onboarding; transferring funds; executing deals and what happens re execution
  • longer term product ideas for freetrade
  • settlement and record keeping/proof of ownership
  • CREST central repository
  • freetrade nominees limited hold your shares, ringfenced from freetrade.io qua stockbroker
  • the longer journey of building your own infrastructure but benefit of it being leading edge rather than legacy
  • the issues surrounding keeping long term personal records of ownership of all sorts – assets from cars, houses, through to shares – and having records that persist longer than houses burning down, apps and technologies coming and going
  • FCA requirement for a “durable medium”
  • the possibility in the future of instant settlement
  • computer technologies vs institutional structures/responsibilities
  • cf DVLA, Land Registry
  • live on Apple but not yet on Android
  • Freetrade’s rollout program
  • their regulatory passport in Europe
  • securities one can buy now and in the future
  • customer service in chat in the app
  • app focus versus integrations with other Fintechs, API plans

And much much more 🙂

Share and enjoy!