With the commotion that is going on in the investment world as of late, many of you have asked for a trading 212 review.
You should know by now that I never like to disappoint my readers, so here we are!
But why should you read this trading 212 review over others?
Because unlike many investment publications, I have no vested interests and I like to keep the technical jargon to a minimum.
So you can always be sure that you’re reading accurate and unbias information, 2 qualities lacking from content in today’s times.
With that rather depressing and self-promotional intro out of the way, we can get into what you came here for.
Just before we get started, let’s take a quick look at the table of contents:
What Is Trading 212?
Is Trading 212 Safe?
Trading 212 Reviews
Now you know the general outline of this trading 212 review, we can get underway.
What Is Trading 212?
Trading 212 is a London-based fintech company that was created to democratise the financial markets.
In other words, they wanted to make it easier for people like me and you to make some money.
They were able to do this by providing a zero-commission stock trading service, the first of its kind in Europe.
Before Trading 212, in Europe at least, you could face a small list of fees for trading financial products.
A list that was costly enough to keep the majority of the public away.
So as you can imagine, Trading 212 has seen exponential growth since it’s inception.
Here are a few accolades that support this statement:
- Trading 212 has been the UK’s most popular trading app since 2016
- Most popular in Germany since 2017
- More than 14 million app downloads
- 300,000 subscribers on Youtube
So Trading 212 has been, perhaps up until recently (for reasons we’ll get into), the go-to platform for investing in the UK.
With the world of finance forever welcoming new investors with open arms, volatility within the market is always fluctuating.
Think about it like this, more money equals more movements.
It’s a fairly easy concept to understand yet it can have costly implications.
In this particular case, it happens to be hedge funds and investment platforms such as trading 212 that took the hit.
The situation I’m referring to has to do with these two publicly-traded stocks in particular:
Now without boring you too much with the facts, both of these stocks had dived due to the impacts of the pandemic.
They were then both picked up by a group of investors who thought they were undervalued and word soon spread.
The hype around these stocks was most prominent on platforms like discord and Reddit in particular.
Sharing such news prompted an exponential increase in stock price due to the sheer volume of buy signals.
As a result, many hedge funds who shorted the stock lost a significant amount of money.
It’s a prime example of a ‘power to the people’ moment.
(For a more in-depth account, I recommend this article by the New York Times)
But what does this have to do with investment platforms like Trading 212?
Well due to the significant increase in the trading volume of a select few stocks, trading 212 and others opted to block users buying these stocks.
(Note: Investors were still allowed to hold or sell the stock if they owned shares)
The companies justification for the block was to stop, particularly inexperienced investors, from blindly buying.
This is because sharp increases in the stock price often lead to a ‘correction’ or a fall in price.
Trading 212 were trying to protect its users from potentially buying into the trend and losing substantial amounts of money.
Seems fair and sensible right?
From an onlookers position, yes.
But here are a few points from the other side of the argument:
- Investors felt like they couldn’t be trusted to make the right decisions
- Some investors felt as though market manipulation was as at play
- Many accusations of shares being sold automatically
We can get a better picture of these opinions when we move onto trading 212 reviews later on.
For now, we’ll take a look at what the company actually has to offer.
When it comes to what type of account you want, you have 3 different options.
Stocks & Shares ISA
A Stocks and shares ISA is a tax-efficient way to invest in publicly-traded companies.
Currently, you are allowed to invest up to £20,000 a year in a stock and shares ISA without having to pay tax on any of your returns.
Here are the main points you need to know concerning this product:
- Commission-free trading
- Withdrawals take 2 business days
- Trade in euros, pounds and dollars
- Set up direct debits (£10 minimum)
General Investments Account
GIA or Trading 212 invest as it’s known as on the platform, is essentially the same as stocks and shares ISA’s, bar the tax benefits.
That means you’ll have to declare your gains and pay 20% tax on your returns.
These GIA are typically used when an individual has reached the £20,000 limit on their stocks and shares ISA.
It should be noted that GIA have access to more stocks, at least on the trading 212 platform.
I can only put this down to either safety or tax reasons as the stocks I’ve tried to find unsuccessfully in my ISA account were Chinese.
So bear this in mind.
CFD simply means contracts for differences.
These are investments which pay the difference in the settlement price between the opening and closing trades.
Investment vehicles that can fall into this category are:
- Forex or currency pair trading
- Commodities (silver, oil Etc)
Trading is commission-free aside from a small charge of 0.5% for conversions into different currencies.
It’s worth noting that CFD’s are typically reserved for experienced investors with plenty of capital to play with.
So if you are fairly new to investing, you probably won’t be using this account type much to start off with.
Safety measures are put in place for those users who are active on CFD accounts but statics show that 76% of people still lose money.
Trading 212 has a list of features available on the platform, each of which we’ll take a look at in some detail.
I’ll also show you how to access them via the app for those of you who are interested.
Pies are a relatively new feature to trading 212 which essentially allows users to own up to 100 securities.
These securities, comprised of ETFs and stocks, make up a portion of the pie.
Users can share and even copy one another’s pies if they choose to.
The idea behind this is users will spread risk and gain exposure to a more diversified market.
To access this feature, all you need to do is head over to the ‘pie library’ section.
Filters are available to help sift through pie options that would be of interest to you.
Just note if you want to share a pie, you’ll need to create a public account.
Simply put, fractional shares are a portion of one full share.
Fractional shares allow users who can’t necessarily afford full shares to invest in the companies they want.
A prime example being Amazon, one of the biggest companies in the world, currently trades for $3,300 a share.
Now many people would love to invest in Amazon but can’t always afford to buy full shares- this is were fractional shares come in.
To buy a fractional share, just click ‘buy’ next to a stock and input the amount you want to invest.
Trading 212 will then give you it’s share value equivalent.
A fairly simply feature but a useful one at that.
Direct debits enforce consistent investing and only require a minimum deposit of £10 to set up.
This features cant currently be used in conjunction with any pies you may have or a particular stock, unfortunately.
However, there have been many requests on Trading 212’s forum to implement this so it could be a change we see in the near future.
To set up a direct debit, head over to ‘manage funds’, click ‘deposit schedule’ and choose your conditions.
When you’ve got some investments, your portfolio allocation is a nice little feature to look at.
Each investment is given a percentage so you have a better picture as to the distribution of your funds.
It’s also useful just to see your portfolio in a more visual format.
Economic calendar is a welcomed addition to trading 212’s features that details important events that are upcoming.
These are events that could have an impact on particular stocks (earnings dates etc) or the stock market in general.
Metrics can be found at the bottom of each event including:
- Actual– The confirmed result after it occurs
- Forecast– predicted outcome by the Trading 212 team
- Previous– prior outcomes of the same event
A description is also provided if a particular event is of interest to you.
To access the calendar move over to the menu and press ‘economic calendar’.
Price alerts can be set for either buying or selling and serve as a helpful tool for all investors.
When the set amount is reached, a notification will be sent to you.
It’s also worth mentioning that you can place an unlimited amount of price alerts on any stock of your choosing.
To set up price alerts you just need to choose a stock and click the icon in the top right-hand corner.
Then set the price you want and it’ll trigger a notification if it’s reached.
If you are new to investing, it can be quite daunting to say the least.
That’s why trading 212 have put together a collection of training videos for their users.
It won’t just be helpful to new investors but for experienced investors too.
They cover a wide range of topics including:
- How to use the app
- Technical analysis
- Pairs trading
To access these training clips, just move over to videos which are located on the menu.
From here you can sift through which clips will be of value to you.
As I alluded to earlier, users of Trading 212 can share ideas and pose requests for new features on their forum.
It’s a helpful little community that is worth taking a look at at the very least.
Sometimes questions you may have were posed by another user so you’ll be able to find a suitable answer fairly quickly.
This will save you potentially having to wait for support.
To view the forum, just press ‘community forum’ on the menu and it’ll take you to their dedicated page.
As I touched on earlier, Trading 212 is a commission-free trading platform meaning there are no upfront fees or maintenance costs.
So how does trading 212 make money?
Mainly through their CFD platform which a pro version available as well as the 0.5% fee for currency conversions.
Aside from that, Trading 212 makes money through spreads between the buy and sell prices.
It seems likely in the future that Trading 212 will want to bring in paid features for both ISA and GIA types.
Nothing is set in stone at this point in time but I’ll keep you posted when new developments occur.
Is Trading 212 Safe?
Trading 212 is authorised and regulated by the financial conduct authority (FDA).
Money that is held by Trading 212 is kept in a segregated account from its own to protect your money in the event of them going bust.
In the unlikely event this does happen, your funds are further protected by the financial services conduct scheme (FSCS), up to £85,000.
When it comes to personal data, regular penetration tests and scans of Trading 212’s applications are run.
This ensures that any bugs or loopholes are remedied.
Trading 212 Reviews
As with every review I like to take other users to experience into account to arrive at a more well-rounded conclusion.
This trading 212 review is no different.
(Note: Data courtesy of Trustpilot)
Looking at Trading 212’s reviews overall, we can see that have a score of average.
Some of you may have noticed the message at the top which says and I quote-
“This profile has seen a significant increase in reviews”
This is a direct result of the recent actions taken by trading 212 that I detailed earlier.
We know this to be true as you can see that the majority of the negative reviews came in January.
In fact, over 3,000 reviews of a 1-star rating were giving to trading 212- making up 1/4 of there overall reviews today.
Typical negative trading 212 reviews include things like:
- Not allowed to buy certain stocks
- Order manipulators
- Server crashes too often
So I think it’s fair to say that prior to this event, trading 212 would have had an overall rating of great, at the very least.
Make of that what you will but one thing is for certain, perceptions of the company have been influenced heavily by this event.
Conclusion Of This Trading 212 Review
I hope now this Trading 212 review is drawing to a close you have a better idea about where they stand in the investing world.
Up until recent events, Trading 212 was rated one of the best investing platforms and still would be hadn’t it been for this situation.
This just goes to show the power a single event/action can have on the reputation of a company.
In my opinion, things will blow over and eventually, Trading 212 will recover.
Having looked at the situation, I think Trading 212 were genuinely trying to act in the best interests on their users.
However, I do think the execution was questionable and comments from the backlash should be taken seriously.
So I suppose your judgement on whether or not to use Trading 212 comes down to how much weight you place on this event.
That is a question only up can answer but I hope I’ve given you all the knowledge to arrive at a decision.
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Past review articles I’ve written include: