In a significant move to revamp its fee structure, Barclays has eliminated account fees for its Direct Investing platform. This strategic adjustment positions the bank competitively in comparison to other major financial institutions, and notable investment platforms such as Hargreaves Lansdown and Interactive Investor.
Previously, Barclays imposed a fee of 0.25% on portfolios valued under £200,000, with a reduced rate of 0.05% for amounts exceeding this threshold. The removal of these fees is aimed at making investment more accessible and affordable for a wider range of investors.
Despite this positive change, it’s essential to note that Barclays continues to charge £6 for trading stocks and exchange-traded funds (ETFs). In this area, challenger platforms like Freetrade, InvestEngine, and Trading 212 still offer more cost-effective solutions for those focused on these types of trades.
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But while the platform doesn’t charge fees when trading funds, it still charges £6 when trading stocks and exchange-traded funds (ETFs).
This means that challenger platforms like Freetrade, InvestEngine and Trading 212 still work out cheaper if you trade those types of investments.
High-street brand: Some novice investors may prefer to start with a name they know
A ‘big move’ but be sure to compare all your options
A raft of investment platforms have cut and simplified their charging structures in recent months including Hargreaves Lansdown*, Interactive Investor* and Freetrade*.
> Furious savers are quitting Hargreaves Lansdown over its new fee hike
Barclays joining their ranks is a ‘very big move’ which will shake up the direct investing market, says Holly Mackay, chief executive of personal finance website Boring Money.
‘Barclays is drawing a bold line in the sand which will take the fight to challenger fintechs.
‘It will also result in some soul searching amongst more established large rivals who have been delivered a pricing headache which I think they will have to respond to,’ she added.
Research from Boring Money suggests that less confident investors prefer the security of a larger brand such as their bank.
Nearly half of cash-only savers said that they’d prefer to invest using their bank rather than a specialist investment provider – whereas only 21 per cent disagreed with this statement.
Barclays says the fee removal will result in a saving of £125 per year for someone with £50,000 invested, or £50 for someone with £20,000 in an Isa.
This is Money says: If you’re a beginner investor and would prefer to get started using a bank rather than a challenger brand, you could do worse than Barclays Direct Investor.
With account fees slashed, you can make the platform very cheap to use – especially if you invest in funds or set up regular investing to invest in stocks and ETFs.
There are no fees when trading funds. And while share dealing costs £6 a trade, there’s no charge for regular investments – so setting these up is cost-effective if you want to start out by making small monthly contributions.
Barclays has thousands of investments on offer, from funds to stocks and shares and ETFs. This is enough to build a diversified portfolio that suits you and your goals.
The platform also offers ready-made investments, which are funds built and maintained by investment experts. You just need to choose the one that suits your goals, so these can support beginners to get started.
The ongoing fund charge for these is 0.45 per cent a year, which is reasonable especially when you consider there are no platform fees.
Ongoing charges are the costs that Barclays charges for managing the investments within the fund.
Even if you are just starting out, it’s important to consider the type of investor you are and the investments you’ll be buying.
In our view a £6 dealing fee for stocks and shares is high – and adds up fast when you trade regularly.
If you prefer high-street names, Scottish Widows Share Dealing only charges £5 a trade with no account fees, beating Barclays Direct Investor.
And you can cut this cost completely by using one of the newer platforms such as Freetrade*, IG*, InvestEngine* or Trading 212*, none of which charge account or dealing fees.
We regularly review investing platforms, putting them through their paces by testing services and features and analysing fees. Our top picks are below.
