By: Harvey Jones | Updated: 29th November, 2019.
FinecoBank is a new kid on the block in the UK and they’re making a splash. The service is highly competitive on share-dealing price (£6.95 for lower-volume traders) and offers particularly attractive rates for investors buying shares outside of the UK. In this multi-currency account, you can also trade directly in many local currencies. Better still, there’s no platform fee. Most investors won’t need 100 free trades over the first three months of their new account, so the current offer essentially means free trading for three months!Read full review >
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks.
The value of your investments can go down as well as up and you may not get back all the money you put in. All investments carry a varying degree of risk and it’s important you understand the nature of these risks. Remember that taxes can be complicated and the tax benefits of this, or any, product depends on your personal circumstances. Tax rules are subject to change.
This share dealing platform from Italian operation FinecoBank has two big selling points. First, a low flat-rate dealing charge of just £6.95, and second, a vast choice of European and US stocks which you can trade even more cheaply. This makes it ideal for freewheeling international, multi-currency investors. However, if your focus is the UK, you might just feel more at home with one of the big domestic platforms.
FinecoBank is a new name for me, and possibly you as well. Yet it’s a big deal on the continent, where it claims to be ‘Europe’s most-used trading platform’.
Milan-based FinecoBank offers a single multi-currency account for banking, trading and investing, including debit cards in both pounds and euros, and zero or minimal currency conversion fees. It says it has a million clients and is now looking to win new business in the UK… Brexit or no Brexit!
For most investors, rock bottom share dealing fees of just £6.95 for UK stocks will be a big attraction. This falls to just £3.95 for busy, busy traders. It is even cheaper to trade overseas stocks, just €6.95 for European trades and $6.95 for US securities.
Better still, there is no monthly account fee – and as you may know, those quarterly charges can really roll up over time.
The site’s big pitch is aimed at those who want to look beyond the UK to trade European and US stocks, exchange-traded funds, bonds, and other financial instruments. There is certainly appeal and wisdom here. The UK economy accounts for less than 5% of the global economy, so good diversification calls for investing elsewhere. Even so, this could have less appeal to Britons who do not consider themselves ‘Citizens Of Everywhere’, as the site labels its customers.
Fineco lets you trade thousands of international stocks across 26 global markets, as well as bonds and exchange-traded funds (ETFs), and more complex instruments such as contacts for difference (CFDs), commodities, currencies, futures, and options.
You pay a flat trading fee regardless of order size and can trade multiple products in local currencies from a single multi-currency account, with only one password and PIN to remember. The site currently offers new customers 100 commission-free trades in the first three months, which should be more than enough for most people!
Features include at-a-glance stock screening, which allows you to set filters to explore different markets.
I’m not completely taken with the design, though. I personally feel it lacks a bit of style and streamlining, which is honestly something I’d expect from a company based in Italy, the mecca of high style and design. That was a drawback for me, as I appreciate a well-styled, simple user interface. Though for many users – especially those focused on Fineco’s low dealing fees – this may not be an issue.
I’ve been a personal financial journalist for 30 years, writing for national newspapers, magazines and websites. I reported on the technology boom in the 1990s, and the subsequent bust. I covered the financial crisis, and the tentative recovery. Decades of writing about the big banks has taught me to be sceptical, to examine every pledge and promise, and look closely at the small print of their product offerings. I’m on the side of the consumer, alert to rip-offs while also keen to highlight top deals. There are plenty out there, if you know where to look.
The basic dealing fee for UK shares, ETFs and bonds is a flat £6.95 per trade, plus 0.5% stamp duty. Put simply, that’s difficult to beat, price-wise.
Hyper-active traders could pay even less. Once your brokerage commission hits £500 in any calendar month, the fee on further orders drops to a flat £3.95. You have to make a whopping 72 trades in a single month to hit that, though, which means you have to be really, really active.
If you do manage that, your £3.95 charge will apply on any further trades that month, and the next month too. Then if you don’t hit the £500 threshold in the second month (which will require 127 trades at the lower £3.95 fee), you revert to £6.95 in month three.
In other words, all but a handful of traders will pay that £6.95 fee, but that is still mighty low.
Charges are even lower on overseas securities, with fixed fees of €6.95 (potentially falling to €3.95 for active traders) in Europe and $6.95 ($3.95) for US trades. This makes it particularly cheap for those trading non-UK investments, as some sites can charge £15 to £20.
With no quarterly account fees or inactivity charges, this really does look like the low-cost platform to beat.
Fineco charges a spread of 0.8 points on CFDs and foreign exchange and 1 point on CFDs Indices and Commodities. There are no custody or administration fees.
The FinecoBank account also has low fees, with no monthly fee, free ATM withdrawals in the UK and European Economic Area (I don’t know how Brexit will affect that), and no fees for UK bank transfers. There is a relatively low 1% currency conversion fee if you make payments in a currency other than that of your debit card. Currency exchange is charged at 25 basis points for GBP/EUR and GBP/USD.
There is a full list of the fees on the site. None seemed too onerous to me.
You can invest in thousands of UK shares, bonds and ETFs, and then go well beyond that with European and US shares, as well as ETFs, currencies, commodities, CFDs, and, for more advanced investors, derivatives and futures. Fineco offers automated ETF investment plans and more than 6,000 worldwide bonds, including gilts. There is no minimum deposit required, you can decide how much you want to invest. In other words, you shouldn’t be lacking for investment options on this platform.
Fineco’s interface is less consumer-friendly than, say, Hargreaves Lansdown. Maybe that’s because it is aimed at more serious traders. Or it could be the greater abundance of foreign stocks. For example, its “most popular securities” list includes Telecom Italia and Intesa SanPaolo, which will be less familiar to the average UK investor.
And in case you want to go beyond a standard share-dealing account and benefit from tax-advantaged programmes, you will have to look elsewhere. As of this writing, Fineco doesn’t offer ISAs or SIPPs.
It always takes time to grow accustomed to a new platform, but, even so, this one didn’t really grab me out of the gate, and I struggled with some of its stock screening features, which I found overly complex. For me at least, the screeners didn’t produce anything I found especially clear or useful. I’m not the brightest with tech though, so savvier users may have better results there.
You can research stocks according to a number of pre-set headings, such as “Foreign utility companies with a high return on capital”, “European stocks that may benefit from European Central Bank monetary policy”, and “Italian, Spanish and Portuguese stocks with strong growth prospects”. There’s even one for UK banks, oils and mining companies, called “God save the Queen”. Hmm…
It offers all sorts of tools to break down the lists of stocks, for example, by US, UK or European index, sector, performance and technicals, although I did find the Stock Screener a bit fiddly overall. When I searched on UK stocks, it repeatedly flashed a message letting me know that there were no results. Again, savvier users than myself may fare better than I did.
And let’s bear in mind here, if you’re an experienced investor that doesn’t need a lot of extra support, or you find investing ideas elsewhere (for instance, an ally like The Motley Fool!) the low dealing fees and nonexistent platform fees may vastly outweigh these concerns.
You can open your account online and Fineco says it should normally take eight to 15 minutes. Gather your passport, tax residency, and other personal details first. Once you have set it up, its contact details include a UK 0800 number, otherwise, you can send an email to the service team. They promise an answer within one working day.
I really like Fineco’s low-cost charging structure – £6.95 a trade is good with me! So is an opening three months of free trades (up to 100).
The Fineco platform is probably best suited for those that really do want a multi-currency bank account, regularly trade European and US stocks, or trade so regularly that you need the lowest possible fees. Or simply investors that are very comfortable researching and finding investment ideas on their own and benefitting from low dealing fees and no platform fees.
On the other hand, if you primarily want UK investments and put high value on an easy-to-use interface and tools, I think you may have more fun with one of the domestic UK trading platforms, even though you’ll pay for the pleasure through higher fees.
Finally, there are a few consideration boxes to tick with regards to using a bank based outside of the UK. FinecoBank was formerly part of the UniCredit family, a very large banking group. As of the 10th May 2019, however, it’s separated from UniCredit and is now an independent bank with (as of the first quarter of 2019) about 1.3 million customers and €74 billion (£66 billion) in total assets. Nevertheless, there have been concerns about the state of the Italian banking system. And it’s hard to say what effect (if any) Brexit would have on this service.
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