- Percentage-based fees increased for new customers
- But funds dealing and regular investing fees cut
Barclays has revamped the fees on its Smart Investor brand, meaning new customers with sizeable savings face significantly higher annual charges than those already using the platform.
It will now charge 0.25 per cent a year on investments up to £200,000, and 0.05 per cent a year on anything above £200,000, for all new customers. This makes no distinction between investments in open-ended funds and those invested in shares, investment trusts or exchange traded funds (ETFs).
The annual charge used to be 0.20 per cent for all money invested via funds and 0.10 per cent for other investments. This remains in place for existing customers, as does the annual cap on fees of £1,500. Had the cap been kept in place for new customers, charges would stop once a portfolio hit £2.2mn, but now investors face unlimited bills.
New customers with medium-sized portfolios will now pay significantly more than existing ones. A £200,000 portfolio of shares, investment trusts and ETFs will cost £500 a year instead of £200. But as the chart below shows, the effect of the changes will vary significantly depending on portfolio size and type of assets.
However, the new pricing works well for those with either very small or comparatively large portfolios. The platform has also scrapped its minimum annual fee of £48 for everyone, so holding £10,000 will cost £25 a year instead. Meanwhile, the annual cost of holding a £400,000 portfolio of funds will go down from £800 to £600.
Barclays also scrapped its funds dealing fee, which was previously £3 per deal, and its regular investing fee of £1. Buying and selling shares, investment trusts and ETFs will still cost £6 per deal for UK and US securities, as with international stocks which is down from £9. This applies to both new and old customers.
Barclays Smart Investor remains competitive for investing in open-ended funds. Hargreaves Lansdown, for example, has a higher percentage-based fee for funds portfolio: it charges 0.45 per cent on the first £250,000 worth of funds, 0.25 per cent between £250,000 and £1mn, 0.1 per cent between £1mn and £2mn, and nothing on values over £2mn. However, investors holding funds portfolios of medium or large size will still find that Interactive Investor’s flat-fee model is the most cost-effective.
Meanwhile, as we have previously discussed, investors holding shares, investment trusts and ETFs have a wider choice of cheaper platforms that cap annual fees to a comparatively low level for that kind of investment, including Hargreaves Lansdown which caps charges annual charges at £45, AJ Bell and Fidelity.
