Member Article

Barclays withdraw services for "smaller investors"

Barclays has announced it will withdraw its investment management services for customers with less than £250,000 in investments.

In a letter sent to customers, the bank said discretionary management accounts will be closed on May 31, a move that experts say will leave thousands of smaller investors “out in the cold.”

Barclays say customers will be given the opportunity to move their portfolios to Barclays Stockbrokers at no cost, and independent financial advisors will be informed of other funds and structured products to meet their investment needs.

Customers need to act before May 16 to instruct Barclays as to what they want to do with their current investments.

The letter from Barclays states: “As a wealth and investment manager, we continually evaluate the services we offer to our clients and have recently reviewed our approach to investing where we make discretionary investment decisions on a client’s behalf.

“Following this review, we have concluded that we are unable to continue to offer a segregated and diversified portfolio management service for smaller accounts.”

Philip Morris, managing director of Easby Gale & Philipson, a financial advisory firm with offices in North Yorkshire and Newcastle, said: “All those consumers affected need to quickly seek advice and guidance to enable them to make a decision on how to deal with their financial and investment planning needs in the future.

“There are a number of options available to all types of clients, but those people specifically affected by the Barclays Discretionary Investment Management ‘service withdrawal’ may have capital gains tax and ISA tax relief implications at risk, and they need to act quickly.

“EG&P would advise those concerned to speak to an Independent Financial Adviser to help them make these important decisions about the future of their money. A list of recognised Independent Financial Advisers can be found on websites such as www.unbiased.co.uk and www.vouchedfor.co.uk.”

Barclays’ move comes in the wake of the Financial Services Authority’s Retail Distribution Review (RDR), which impacted the way in which financial services firms can provide advice to consumers.

A spokesperson for Barclays said: “Barclays regularly reviews its portfolio management offering to ensure that we give clients the right level of service for their investment needs. In the new regulatory environment, it is no longer viable, or practical for clients, to offer a direct discretionary service to the small number of clients we have with less than £100k in their portfolios.

“We are writing to them to them to give them the option of moving their portfolios to Barclays Stockbrokers, at no cost. This is the UK’s largest online execution-only stockbroker, giving clients access to over 2,000 funds, including our own range of multi-asset funds which offer access to the asset allocation and asset selection process underlying our bespoke discretionary portfolios but available via RDR-compliant share classes and in a more tax efficient form.

“Similarly, we have written to IFAs, who ask us to manage client money on their behalf, to explain that we will no longer be making our discretionary offering available to new clients who come to us through this channel with less than £250k to invest. However, we will be able to offer these clients access to funds and structured products through a range of platforms, which are better suited to helping them to achieve their investment needs in a simple and cost-effective manner.

“We will continue to offer a discretionary service to existing ‘introduced’ clients who have more than £100k invested with us, and those beneath that threshold will have the option of moving their portfolios to alternative solutions with us at no cost.”

This was posted in Bdaily's Members' News section by Tom Keighley .