Trading on Revolut

Arrival

I got a notification on Revolut that they now allow customers to buy stocks. What are your opinions on this? It seems nicely laid out and simple to use, but would there be any difference between using this and other traditional brokers, or caveats similar to their cryptocurrency trading where you don't actually truly own any cryptocurrencies bought through them as you can't get the keys

kenmm

ye - I looked at it a couple of months ago - when I tried to sign up I think I had to verify ID with some other company.
You can buy fractions of shares, but I cant rem if you actually own anything. I never went with it in the end (I think when I tried it you have to use it within US trading hours).

Jim2007

kenmm wrote: »

ye - I looked at it a couple of months ago - when I tried to sign up I think I had to verify ID with some other company.
You can buy fractions of shares, but I cant rem if you actually own anything. I never went with it in the end (I think when I tried it you have to use it within US trading hours).

Shares can only be registered as a full unit, which means if anything becomes an issue, you are just a normal creditor of the company...

kenmm

Jim2007 wrote: »

Shares can only be registered as a full unit, which means if anything becomes an issue, you are just a normal creditor of the company...

Normally yes, but with R you buy fractions via them - are we saying the same thing? It was weeks ago I read up on it and I am too lazy to look now!

Shai

He is pointing out that Revolut owns your fractional shares, not you. If Revolut were to go bankrupt, these shares will be sold and the proceeds will go to the liquidators. And as a normal creditor, you're unlikely to see any of this money.

kenmm

yes I know - I am saying the same. It was implied in my opening post that you can buy fractional shares - therefore its not real trading, similarly with their crypto product.

Interesting, I’ve been trading with revolut and hadn’t realised I wasn’t the actual owner of my shares...

The interface is very clean and easy to use, but perhaps I’d be better off just using degiro?

Only problem is I’ll obviously need to sell all my shares currently held with revolut

Jim2007

Batrachotox wrote: »

Interesting, I’ve been trading with revolut and hadn’t realised I wasn’t the actual owner of my shares...

It is not that you don't own the shares, it's how you own them that could be an issues in the even of a financial crisis.

Normally when you buy shares the are either registered in your name or a nominee name which means they are not owned by the broker and should the broker declare bankruptcy, you still have your shares are they are clearly identifiable as yours as opposed to the broker.

When you buy fractions of shares, the are register in the brokers name or one other legal entities and the broker tracks how much of the lot belongs to each client. If the broker declares bankrupt, the shares are the asset of the company and the liquidator takes charge of them and you become just another creditor of the broker. Depending on how bad the situation is, you may eventually get all, some or none of your money back.

Jim2007

Jim2007 wrote: »

It is not that you don't own the shares, it's how you own them that could be an issues in the even of a financial crisis.

Normally when you buy shares the are either registered in your name or a nominee name which means they are not owned by the broker and should the broker declare bankruptcy, you still have your shares are they are clearly identifiable as yours as opposed to the broker.

When you buy fractions of shares, the are register in the brokers name or one other legal entities and the broker tracks how much of the lot belongs to each client. If the broker declares bankrupt, the shares are the asset of the company and the liquidator takes charge of them and you become just another creditor of the broker. Depending on how bad the situation is, you may eventually get all, some or none of your money back.

I see. Possible stupid question, but I haven’t actually buying fractional shares, only full ones - would that make a difference or does the fact that revolut allows for the purchasing of fractional shares mean they’d all be treated as such?

Jim2007

Batrachotox wrote: »

I see. Possible stupid question, but I haven’t actually buying fractional shares, only full ones - would that make a difference or does the fact that revolut allows for the purchasing of fractional shares mean they’d all be treated as such?

You can't register a fraction of a share, it is just not legally possible. How exactly Revolut accounts for it is something you'd have to ask them or most likely it is buried somewhere in their T & C. If you bought say ten and a half shares, are ten registered in a nominee account for you and the half else where, or are none registered with the nominee.... I don't know.

What is clear though is that anything not registered in the nominee's name or your name, will form part of the assets of the broker and will be take by the liquidator and sold for the benefit of all creditors.