By Aisling Finn on Friday 5 March 2021
A slim 0.15 per cent conversion fee will be added for equities and ETFs in other currencies.
Free trading no more? Trading 212 looks set to introduce a conversion fee for all FX trades.
In a post on Trading 212’s community forum, the trading platform revealed that, from early April, it will be implementing a 0.15 per cent fee on all trades of stocks or ETFs that are in different currencies from the currency on a customer’s account.
So, when a user is making a trade in a currency different from that of the currency loaded into their account, then a 0.15 per cent fee will be added.
While the move is perhaps a controversial one as Trading 212 can no longer claim to be commission-free, it still has one of the lowest FX fees in the UK.
For instance, Freetrade charges users 0.45 per cent for every trade made in a different currency, while bigger, incumbent investment platforms like Hargreaves Lansdown charge around 1 per cent.
Questions have now been raised about the integrity of these commission-free trading platforms pivoting to add chargers, however small.
Matt Leibowitz, CEO of rival investment app Stake, which doesn’t charge FX fees on trades, said: “With Trading 212 announcing on its community forum, not publicly, that it is now going to be charging an FX conversion fee on EVERY foreign trade, it has joined Freetrade as another brokerage falsely selling itself as a zero-commission brokerage to its customers.”
“The GameStop saga empowered retail investors to take on the big hedge funds, Trading 212 is essentially capitalising on the new interest in retail investing as an opportunity to rinse inexperienced investors of more money. The ‘heroes’ of this story are actually the villains, and for brokerages like Trading 212 and Freetrade, their customers are the game. Retail investors deserve better.”
Following the surge in demand following the Reddit vs Wall Street battle, many trading apps were forced to temporarily halt trading, including Trading 212.
The decision to add fees, however small, to what was marketed as a commission-free platform seems to have ruffled a few feathers, let’s wait and see if the move pushes Trading 212’s users to look for other avenues.
AltFi reached out to Trading 212 for comment, but it didn’t respond in time for publication.