Barclays

Biggles
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Barclays

Postby Biggles » November 30th, 2016, 11:59 am

Barclays (with whom I hold the major part of my shares) have emailed me with details of their 'brand new online direct investing service' https://www.barclaysstockbrokers.co.uk/ ... sting.aspx.

Despite reading their two pages of introduction, I'm unsure whether this is just a re-branding, or a new website with new charges (I should save money, so that's good) or whether the phrase 'direct investing' infers CREST holdings instead of nominee accounts or some other radical change?

Breelander
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Re: Barclays

Postby Breelander » November 30th, 2016, 12:59 pm

My fees are going to nearly double due to there now being a percentage fee levied on all holdings including shares - bad for LTBH.

Barclays Direct Investing wrote: We’ve removed all account administration charges, so you’ll pay one monthly customer fee. You’ll also pay a straightforward transaction fee each time you buy or sell an investment.

This pricing is for Barclays Stockbrokers customers only and will be in place for a minimum of three years.
What are the new fees?

Code: Select all

Customer fee                        Funds                               Other investments
Based on investment type          0.2% p.a.                      0.1% p.a. on investments up to £200,000
                                                                    0% on investments of over £200,000
Minimum customer fee                    £4 per month
Maximum customer fee                  £125 per month
https://www.barclaysstockbrokers.co.uk/ ... lients.pdf

Oh, and these are supposed to be a special discount rate just for the migrating Barclays Stockbroker customers - who knows how much they will go up when the three years are up!

So much for...
Our straightforward new pricing structure is designed to encourage a long-term approach to saving and investing – buying diversified investments and holding them for a number of years.

JMN2
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Re: Barclays

Postby JMN2 » November 30th, 2016, 2:05 pm

Will this apply to a Barclays Stockbrokers & AJ Bell SIPP too?

I currently pay £46.50 quarterly and about £11 commission per trade.

EDIT. Apparently not yet or info available at later date.

PinkDalek
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Re: Barclays

Postby PinkDalek » November 30th, 2016, 2:18 pm

Breelander wrote:My fees are going to nearly double due to there now being a percentage fee levied on all holdings including shares - bad for LTBH. ...


I'm trying to fathom the proposed new charging structure but I don't hold Funds so that part doesn't apply to me.

They say, as you quoted, 0.1% p.a. on investments up to £200,000 and 0% on investments of over £200,000 so maximum on Other Investments seems to be £200 per annum or £16.67 per month (query VAT).

I'd also far prefer the option of quarterly fees rather than monthly.

The good news, I suppose, is the If you have Barclays banking accounts, you’ll be able to see them alongside your investments and manage them all with a single log-in; through Online Banking but I've never found two log-ins a problem.

Julian
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Re: Barclays

Postby Julian » November 30th, 2016, 2:25 pm

Breelander wrote:...
Oh, and these are supposed to be a special discount rate just for the migrating Barclays Stockbroker customers - who knows how much they will go up when the three years are up!


I know. I read the new charge sheet with dismay but thinking that at least I had 3 years to make other arrangements, and then I read the stinger about this new massive rate hike (in my case) being the special transitional prices. If these are the soften-the-blow transitional charges then just what are the full charges going to be?

I beginning to get to the end of my tether as far as brokers are concerned. I think I'm going to put all my Barclays holdings into certificate form. I actually have 3 core brokers for my HYP and I'm seriously considering putting the whole lot into certificate form. I could really do without the hassle but I could also do without having big fee hikes imposed on me at random intervals.

I forget all the details but I've had two other occasions where one of my brokers has increased fees - one of them was Fastrade I just remembered. In both cases the brokers did the honourable thing and offered a time window to get out where they waived all transfer-out fees. I saw nothing in the Barclays communications that gave me much hope that Barclays would do the same. I also note that current transfer-out fees are £30 (https://www.barclaysstockbrokers.co.uk/ ... arges.aspx). I think that is inc VAT since they explicitly put "+ VAT" against some other prices. I couldn't find a charge for putting nominee holdings into certificate form. Many brokers list this specifically but maybe it is treated as a transfer-out so is also £30.

Barclays is also very vague about timescales. Apparently the transfer to the new accounts and fees is happening in waves during 2017. My "wave" will be a wave goodbye, or maybe some other less friendly gesture instead :)

Grrrrrrrrrrr

- Julian

PinkDalek
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Re: Barclays

Postby PinkDalek » November 30th, 2016, 2:58 pm

Julian wrote:I know. I read the new charge sheet with dismay but thinking that at least I had 3 years to make other arrangements, and then I read the stinger about this new massive rate hike (in my case) being the special transitional prices. If these are the soften-the-blow transitional charges then just what are the full charges going to be?


The way I read it is the new charges we've seen are what they will be, fixed for a minimum of 3 years from whenever in 2017.

However they also say But we’ll also offer a special Barclays Stockbrokers rate for at least three years, to help minimise the cost increases that some customers might see which seems to relate to an interim charging structure they have yet to disclose.

I may be wrong.

Julian
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Re: Barclays

Postby Julian » November 30th, 2016, 3:13 pm

PinkDalek wrote:The way I read it is the new charges we've seen are what they will be, fixed for a minimum of 3 years from whenever in 2017.

However they also say But we’ll also offer a special Barclays Stockbrokers rate for at least three years, to help minimise the cost increases that some customers might see which seems to relate to an interim charging structure they have yet to disclose.

I may be wrong.


I suspect that you're right. It seems very unlikely that the permanent charges could be higher than the ones on this new rate sheet that we've all been looking at. Still seriously considering certificating everything though. At least if I have 3 years to do it I can do it a bit at a time.

I like to try and move shares when they are not ex-divi with a payment still due. I like to have the latest divi safely paid into the original account before I then put a share into transit where it can then, mnassive administrative delays not withstanding, arrive in the new account (or be certificated) in plenty of time before its next xd date so that at no point is there the possibility of confusion about where the divi will be paid, it will also go into the account where the share resides. I've had times in the past where a divi has gone into an old account and taken a while to get paid to me.

- Julian

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Re: Barclays

Postby Lootman » November 30th, 2016, 3:58 pm

Breelander wrote:My fees are going to nearly double due to there now being a percentage fee levied on all holdings including shares - bad for LTBH.

I'm not with Barclays but I do not see how such a fee can be justified. Obviously they prefer customers who are active and this is a way of capturing revenue from those who are not. But couldn't they at least charge this more as an inactivity fee, targeting those who don't trade? Or give you a number of "free" trades as part of that annual AUM fee?

Charging for holding is not a way to attract those with a lot of assets, but may drive them to go elsewhere.

My main account (I have four) is with TD Direct Investing and they don't apply any pesky fees on me apart from commissions. Perfect except of course they are merging with ii so that may go pear-shaped as well.

US brokers manage to have no fees if you have a decent wodge with them, and offer commissions that are about four or five quid. Why are the UK brokers so bad, greedy and expensive in comparison?

Breelander
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Re: Barclays

Postby Breelander » November 30th, 2016, 4:05 pm

Julian wrote:
PinkDalek wrote:...they also say But we’ll also offer a special Barclays Stockbrokers rate for at least three years, to help minimise the cost increases that some customers might see which seems to relate to an interim charging structure they have yet to disclose.

I suspect that you're right. It seems very unlikely that the permanent charges could be higher than the ones on this new rate sheet that we've all been looking at...


I've phoned Barclays Stockbrokers for clarification. Apparently these new charges are inclusive of VAT and there is no longer an admin charge for an ISA.

Regarding the 3-year 'special rate' for Barclays Stockbrokers migrated customers, I asked "so what's the rate for new customers who didn't come from Barclays Stockbrokers?". The answer was that the same 0.1% fee applies, but it doesn't cut off above £200k as it does for our 'special rate'.

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Re: Barclays

Postby DiamondEcho » November 30th, 2016, 4:27 pm

Interesting point about getting holdings in physical 'certificated' form, I'd rather forgotten that that was still possible.

A few years ago as I was unwinding a small BTL portfolio I had some pretty significant sums of money crossing my Barclays bank account. The funds were being transferred on to my non-Barclays broking account. This must have registered on an 'Exception report', and the individual at Barclays assigned to my account called a few times [international, on my mobile.... thanks!] trying to persuade me to put the funds into Barclay's Stockbrokers rather than the company I was and am still happy with. Long story short when I eventually declined their suggestion, due to their very high fees, esp. as a sedentary LTBH investor. They quite bluntly threatened to close my bank account! Their threat was absolutely as literal and naked as that! They knew as an expat of some years it would be very hard for me to open an alt UK account; so you might conclude it was attempted strong-arming. I was honestly shocked by that.

Then I remembered that the one remaining UK mortgage I have is with the Woolwich, a Barclay's subsidiary. And I pointed out if they closed my account I'd have no way of paying 'their mortgage'. That stopped them in their tracks, but I keep a good credit balance [closer to 5 than 4 figures] since I feel I have to just to keep them off my back until we finally return to the UK in c1.5 years. Then I'll be rid of them like a shot. IME very unpleasant and manipulative people to deal with, not least their aggressive and bullying attempt at 'asset harvesting' , via virtual blackmail to get me into a product that was more-$ and not a patch on my current brokers offering.

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Re: Barclays

Postby PinkDalek » November 30th, 2016, 4:29 pm

Breelander wrote:I've phoned Barclays Stockbrokers for clarification. Apparently these new charges are inclusive of VAT and there is no longer an admin charge for an ISA.

Regarding the 3-year 'special rate' for Barclays Stockbrokers migrated customers, I asked "so what's the rate for new customers who didn't come from Barclays Stockbrokers?". The answer was that the same 0.1% fee applies, but it doesn't cut off above £200k as it does for our 'special rate'.


Thanks, most helpful. I was this minute reading your first post again and had finally realised I was wrong (as I suspected)!

YeeWo
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Re: Barclays

Postby YeeWo » November 30th, 2016, 6:25 pm

I really really Don't Like the precedant this sets for the rest of the "Industry". :(
- HSBC InvestDirect charge me £10ish per quarter for my account and then £12ish per transaction. My holdings are 6 figures in value and therefore, compared to Barclays plan, I'm getting a good deal.
- The only reason to actually have a brokerage account is the ISA wrapper.
- Custodians allow dealing in "their" companies shares online. i.e. If Barclays aren't careful here, people will simply default back to the e-equivalent of a paper share certificate which is an online account with the custodian.
- Computershare, Capita et al may yet be beneficiaries of Barclays' move.
- The high street banks always seem to look at e-commerce from the perspective of making transactions suit-their-costbase rather than embracing technology to reduce their cost-base. Barclays Stockbroker business could be serviced online from a low cost centre in India/Philippines etc.

simoan
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Re: Barclays

Postby simoan » November 30th, 2016, 6:44 pm

YeeWo wrote:I really really Don't Like the precedant this sets for the rest of the "Industry". :(

Neither do I but if you don't fight it they will get away with it. The trouble is they know they can because too many investors are passive. It's clear from the AJ Bell case that the FOS is taking these changes to account fees, and terms and conditions more seriously, especially in combination with high exit charges that effectively lock you in. What the industry needs is more competition like in the US, not less as is becoming the case in the UK e.g. the imminent disappearance of TD Direct.

If you feel you have good grounds it only takes 10 minutes to file a complaint with the FOS on-line.

All the best, Si

YeeWo
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Re: Barclays

Postby YeeWo » November 30th, 2016, 7:03 pm

simoan wrote:It's clear from the AJ Bell case that the FOS is taking these changes to account fees, and terms and conditions more seriously, especially in combination with high exit charges that effectively lock you in. What the industry needs is more competition like in the US, not less as is becoming the case in the UK e.g. the imminent disappearance of TD Direct.
I agree that more competition is needed, the problem with e-commerce is almost total price-transparency which makes "rinsing" Investors of their money harder than ever. I remember going into the TD Direct show-room in Holborn which existed a few years ago and having a really good look at their fantastic offering. They obviously weren't making money :(
How are the US operators able to survive and thrive in a highly competitive environment with such limited pricing power?

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Re: Barclays

Postby Lootman » November 30th, 2016, 7:29 pm

YeeWo wrote:
simoan wrote: the imminent disappearance of TD Direct.

I agree that more competition is needed, the problem with e-commerce is almost total price-transparency which makes "rinsing" Investors of their money harder than ever. I remember going into the TD Direct show-room in Holborn which existed a few years ago and having a really good look at their fantastic offering. They obviously weren't making money :(

I didn't know that TDDI office has vanished but it's moot now anyway.

YeeWo wrote:How are the US operators able to survive and thrive in a highly competitive environment with such limited pricing power?

The US retail brokerages have flourished and continue to, despite having commissions that are probably about half the UK commission rate, on average. And without piling on a bunch of junk fees. I'd suggest a few factors:

1) Economies of scale. A much larger population and a far greater percentage of Americans have a brokerage account, and see it as an everyday product in the same way we do with bank accounts. Then you have to add in the huge amounts of individual (IRA) and occupational (401K) retirement plans that are managed directly by the ordinary person.

2) Better horizontal integration. The big brokerages and banks are good at cross-selling. So for instance E*Trade has a mortgage business, Schwab sells banking, brokerage and advisory services side-by-side, TDameritrade will give you a credit card and so on. In the UK it's generally a bad sign when a High Street bank gets involved in other lines of business but in the US, it's reassuring to have JP Morgan, Bank of America or CitiBank sitting behind you (and too big to fail).

3) The US houses seem better at monetarising assets under management. So there are elite tiers of broker client depending on how much money you have there, even if you don't trade that often. I'm not sure how they do this, other than perhaps through stock lending. But generally you will only pay maintenance fees in the US if you have a small account. Deposit a million in assets and they will make you feel like a King - they will offer cash for assets regardless of your trading level. They want to grow.

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Re: Barclays

Postby Hanoi » November 30th, 2016, 9:45 pm

This "next exciting step for Barclays Stockbrokers" seems to be how they can extract more in fees from me. An ISA with Barclays currently incurs an annual fee of £36 regardless of value. With the hike to 0.1% of assets, this will increase to £200 for anyone with an ISA of >£200k. There is no guarantee that the cap will not be removed in the future.

There are some mitigations. Dealing charge is halved. Dividend reinvestment (currently 1% with £1 minimum and capped at £10) will be included in the monthly customer fee.

They say "moving cash or investments between accounts" is covered by the monthly fee. Need to get clarification that this potentially means I can move shares from my MarketMaster to my ISA (for a new ISA tax year) but suspect not as only cash is normally accepted.

One of the reasons I use Barclays is that they exercise the scrip divided when offered. I need to get clarification that this will continue.

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Re: Barclays

Postby TahiPanas » December 1st, 2016, 5:31 am

Hanoi wrote:This "next exciting step for Barclays Stockbrokers" seems to be how they can extract more in fees from me.


Danger, unjustified conspiracy theory to follow:

I suspect there may be no escape in the medium term. Do I see a pattern?

I was firmly resolved to transfer my holdings in TDI Luxembourg back to Barclays after they informed me of their exciting new increase of 0.1% in addition to their normal transaction fee. Now Barkers are proposing a not too dissimilar thing. Will the other brokers eventually increase their fees heralding the end of dirt cheap online investing?

TDI will get the bullet in any case as I don't relish III, the new owner.

Julian
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Re: Barclays

Postby Julian » December 1st, 2016, 9:16 am

Breelander wrote:
Julian wrote:
PinkDalek wrote:...they also say But we’ll also offer a special Barclays Stockbrokers rate for at least three years, to help minimise the cost increases that some customers might see which seems to relate to an interim charging structure they have yet to disclose.

I suspect that you're right. It seems very unlikely that the permanent charges could be higher than the ones on this new rate sheet that we've all been looking at...


I've phoned Barclays Stockbrokers for clarification. Apparently these new charges are inclusive of VAT and there is no longer an admin charge for an ISA.

Regarding the 3-year 'special rate' for Barclays Stockbrokers migrated customers, I asked "so what's the rate for new customers who didn't come from Barclays Stockbrokers?". The answer was that the same 0.1% fee applies, but it doesn't cut off above £200k as it does for our 'special rate'.


Yikes! Thanks for doing the legwork on that.

I don't suppose you asked whether they would be offering a time window to transfer out where transfer-out fees are waived as Fastrade and one of my other brokers both did?

I'm definitely leaving Barclays and if I also have to pay £30 a holding for the privilege of them hiking my fees about four-fold as a transitional offer and then by much more than that 3 years later I will also be doing everything I can to avoid using Barclays for any of my other financial affairs in the future. This is not the way to treat customers.

- Julian

DiamondEcho
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Re: Barclays

Postby DiamondEcho » December 1st, 2016, 9:32 am

YeeWo wrote:How are the US operators able to survive and thrive in a highly competitive environment with such limited pricing power?

Lootman wrote: 3) The US houses seem better at monetarising assets under management. So there are elite tiers of broker client depending on how much money you have there, even if you don't trade that often. I'm not sure how they do this, other than perhaps through stock lending. But generally you will only pay maintenance fees in the US if you have a small account. Deposit a million in assets and they will make you feel like a King - they will offer cash for assets regardless of your trading level. They want to grow.


Agreed with all your points Loot. Per the above, the US had a technological lead in getting investors online. I worked for a US brokerage/bank between c'90 and '02, including compiling the financials/business-plan to put our brokerage offering on-line in the US and available via a mobile phone. That was 1999. Once that was up and running in the US parts of it were later rolled out to countries with suitable client bases elsewhere, including London. The London operation with this technology then got hived off into a JV that was launched as HSBC Direct, the local British reputable name sitting on our 'Wall Street' platform.

So the US had a tech-lead. Their citizenry is far more financially savvy [for example TMF started there in '93 when the web was just evolving beyond newsgroups and porn], they have to be, the UK is only quite recently realising a state-pension and prospect of an employment based pension might not be sufficient years down the line.

I can say based on my experience that it is absolutely certain that any US broker is stock-lending client long positions. In fact if you hold a blue-chip portfolio with a US broker you can often [IME] enrol in their stock-lending programme. That isn't permission for the broker to lend your stock, as odds on they're doing that anyway; it's effectively a request to receive a slice [say 30-40%] of their income generated on your positions.

YeeWo
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Re: Barclays

Postby YeeWo » December 1st, 2016, 10:45 am

DiamondEcho wrote:Once that was up and running in the US parts of it were later rolled out to countries with suitable client bases elsewhere, including London. The London operation with this technology then got hived off into a JV that was launched as HSBC Direct, the local British reputable name sitting on our 'Wall Street' platform.
Known today as HSBC InvestDirect. The JV was Merrill Lynch/HSBC IIRC? I agree with comments regarding financial culture. Most people I know have Holidays/New Cars etc. etc. but tend to work on the assumption The State will look after them in their dotage. I worked from Amex for 9 years and recall how Americans had a focus on their 401k that seemed alien at the time but is appearing wiser and wiser as the years roll by!


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