By: Harvey Jones | Updated: 9th September 2020.
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 at just £2.95 per trade 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. For 50 free trades over the first two months, use promo code FINECO-MF!Read full review >
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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 £2.95, 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…
For most investors, rock bottom share dealing fees of just £2.95 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 €3.95 for European trades and $3.95 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 contracts 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 50 commission-free trades in the first two months, which should be more than enough for most people! It’s worth noting that this offer is valid until 30 September 2020.
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 £2.95 per trade, plus 0.5% stamp duty. Put simply, that’s difficult to beat, price-wise.
Charges are also ultra-competitive on overseas securities, with fixed fees of €3.95 in Europe and $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 foreign exchange and 0.4 points on CFDs Indices. There is no commission or additional spread on share CFDs.
There is a 0.25% custody fee on funds, though that is the maximum and it goes down the more funds you hold in your account.
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.
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 – £2.95 a trade is good with me! So is an opening two months of free trades (up to 50); however, this offer ends 30 September 2020.
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.
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