Barclays ISA massive fee rise

caveman8006

I have just received an email from Barclays Investors "about the next big step in investing with us. We’re planning to move your Barclays Stockbrokers account(s) to Smart Investor, the new direct investing service from Barclays, ready for you to log in from Monday 28 August 2017"


On further investigation, though, it turns out that this new product will increase the annual fee on my £700k stocks and shares ISA (in which I only hold shares and ITs) from a fixed fee of £35 pa to a product with a 0.2% fee on funds and 0.1% fee on other holdings like shares, ITs and ETFs. That's potentially a annual increase of 2000%! Generously, they will offer to "cap" my fee for 3 years at £200, although that is still substantially higher than the equivalent Hargreaves Lansdown product which has a £45 pa cap.


At least there are no transfer out charges with Barclays, so I will be able to switch from Barclays to HL and save £200pa (and possibly be paid £500 upfront by HL) - a no-brainer! I think it is slightly bizarre that I have been forced to switch substantial sums to HL from first Fidelity and now Barclays in the last 12 months to save money!

eskbanker

Any change from a fixed fee to a percentage-based charge will inevitably benefit some and disadvantage others, with large portfolios most likely to suffer, so even though you see it as a "massive fee rise", others will see it as a reduction.

As you rightly say though, if it doesn't work for you, go elsewhere!

caveman8006

True enough - although, as there is a minimum service fee of £4 per month, no-one will be better off as a result of this change

dunstonh

There is pressure for platforms not to show any bias between the investment universes other than where is necessary. There is no cost difference to a platform in holding funds or shares or other direct investments quoted on the LSE. So, when there is a difference in pricing then there is a bias and that bias is not considered ethical.

So, a platform with higher charges for UT/OEIC holders is using them to cross subsidise those with direct investments on a lower charge.

True enough - although, as there is a minimum service fee of £4 per month, no-one will be better off as a result of this change

Most platforms are loss making. The platforms, like Barlcays, which are minor players and not getting large inflows will have to decide to increase charges or sell up/shut down.

merts

Pretty much exactly the same issue here and I guess I'll also move account. Where did the £200 cap from. Is that something offered generally or did you call them?

jimjames

caveman8006 wrote: »

At least there are no transfer out charges with Barclays, so I will be able to switch from Barclays to HL and save £200pa (and possibly be paid £500 upfront by HL) - a no-brainer! I think it is slightly bizarre that I have been forced to switch substantial sums to HL from first Fidelity and now Barclays in the last 12 months to save money!

Seems a sideways step to move from a platform where you're worried about costs to another that is known for high costs.

Surely iWeb would be cheaper at £25 one off fee?

Edit - just seen you only have shares with HL which will make it cheaper, still not as cheap as iWeb though.

caveman8006

Apparently all existing Barclays ISA customers are offered the £200pa cap for 3 years.


As for HL vs Iweb etc.., in my opinion the better HL tools and service are worth a few quid extra, (just not a few thousand which is the difference if you own funds!).

pvt

Just openned the email today and horrified. When the fees go up this much it's pretty much someone telling you they just don't want your business any more (As Dunston's comments would indicate is the case).

I've a £200k ISA, with about 85% in funds and 15% 'others'. The price calculator on their website suggests I will be hit with huge hike in fees.

Guess I'll have to wait and see what the "information pack" says - the videos on their website are completely devoid of information and just have videos of coffee machines making 'flat whites' for smiling happy people.

A friend recommended AJ Bell, but they seem just as expensive. So is HL the best route?

eskbanker

pvt wrote: »

A friend recommended AJ Bell, but they seem just as expensive. So is HL the best route?

Unlikely for a sizable fund holding but do some analysis using your own numbers at the various comparison sites:

http://monevator.com/compare-uk-cheapest-online-brokers/
http://www.comparefundplatforms.com/
https://forums.moneysavingexpert.com/discussion/5583030

TrustyOven

pvt wrote: »

I've a £200k ISA, with about 85% in funds and 15% 'others'.

pvt wrote: »

A friend recommended AJ Bell, but they seem just as expensive. So is HL the best route?

Why don't you play with Snowman's spreadsheet and input your figures and see how the charges change?

There's the link:
https://forums.moneysavingexpert.com/discussion/5583030

Edited to add: eskbanker beat me by 1 minute

caveman8006

pvt wrote: »

Just openned the email today and horrified. When the fees go up this much it's pretty much someone telling you they just don't want your business any more (As Dunston's comments would indicate is the case).

I've a £200k ISA, with about 85% in funds and 15% 'others'. The price calculator on their website suggests I will be hit with huge hike in fees.

Guess I'll have to wait and see what the "information pack" says - the videos on their website are completely devoid of information and just have videos of coffee machines making 'flat whites' for smiling happy people.

A friend recommended AJ Bell, but they seem just as expensive. So is HL the best route?

Probably not in your case, as HL charges 0.45% for funds compared to 0.2% at Barclays. You may even be better staying where you are provided you can negotiate a transitional fee cap, as most of the "high service provider" alternatives charge 0.25% or more...