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Barclays Stockbrokers has signed up funds platform Fidelity FundsNetwork in a bid to take on Hargreaves Lansdown in the battle for the country's growing number of DIY investors.
According to Citywire Wealth Manager, Barclays, the country's largest execution-only stockbroker, has struck a deal that will see FundsNetwork, which operates mainly in the advisory market, become the engine of the bank's Funds Market platform.
The alliance will treble the number of funds available to Barclays customers to around 3,000 in the next few weeks.
The move is a response to Hargreaves Lansdown, the country's largest funds broker which has steadily extended its reach into share dealing. After cutting its trading charges and improving its online functionality last year Hargreaves claims to have captured 12% of the execution-only market.
In a further challenge to its main rival Barclays Stockbrokers is dropping upfront charges on funds on its platform and will offer a ‘loyalty bonus’ to clients, similar to that offered by Hargreaves Lansdown.
Rupert Dickinson, head of Barclays Stockbrokers, said: ‘It will be hugely competitive; especially when you add this to our existing leading position in share-trading.
‘We are absolutely determined to be market leader in this space. We are number one in the active trading space and we want to be number one in self-directed services through the UK. With this combination, we have a strong foundation.’
Dickinson forecast there would be a lot of development in the investment platform market as traditional financial services companies grappled with the abolition of commission by the Financial Services Authority. This would prompt many firms to see if they could deal with investors directly.
He said: ‘There will be a fair amount of change over the next 18 months. So we are delivering a wide range of services for investors holding funds, adding to our heritage of active trading,’ said Dickinson. ‘The world in the next 18 months will see a seismic amount of change.’
At his firm's recent half-year results Hargreaves Lansdown founder Peter Hargreaves said the financial reforms would present more of an opportunity than a challenge. Analysts have downgraded the stock in the past year over concerns of growing competition.
Comments (34)
Barclays have improved their latest site by adding a total for their basic report - wonderful - but I also use & like HL - prefer HL's PDF reports which are quick and easy - Barclays takes several clicks (I'm lazy?) - but then I don't invest in funds. ...........
18:10 on 22 February 2012
If Barclays are as bad at service in this area as in their retail banking ....
18:22 on 22 February 2012
I've been with Hargreaves Lansdown for ten years or more and have nothing but praise for them. Why have H-L grown so well? Because they are trust worthy and give better service than others in the market. Barclays can attempt to emulate H-L but I don't think they will. After I've seen their poor savings advice and service to my aged mother and the poor their returns I wouldn't touch them.
18:35 on 22 February 2012
I have have Barclays Stockbrokers Account and find it excellent. I also have a HL Vantage account and find the platform excellent but object to the platform fees charged for holding tracker funds (£2/ month/ per fund - uncapped) and also the fees charged for holding shares/ etf within an ISA. If Barclays are competitive in this area they will have my custom in future.
18:38 on 22 February 2012
Best to wait until December and the new rules,and see who will NOT make a charge per fund per annum. I am with HL but will change if i see funds offered with no charge for the platform provider
18:40 on 22 February 2012
I use both Barclays and HL for shares both within and without ISA wrappers but use HL for all my ISA unit trusts.
I find the HL charting facility excellent for the unit trusts, which is why I moved the unit trusts that I held through Chelsea Financial Services to HL a couple of years ago.
19:09 on 22 February 2012
As a matter of principle I would only direct my business to an organisation that had the clients interests as their 100% priority and concern.That would not be a bank,however well they tried to dress it up.Like many,I trust HL for their independent views and impartial advice;if it costs slightly more thats fine;I will sleep easier at night.
The record of banks and their inter-reaction with the public's savings is not one that inspires any degree of confidence whatever.Already I see the spokesmans comments on the bank's desire to be number uno in the various facets of this business so watch out as service quality et al evaporates.
19:14 on 22 February 2012
I have always invested through Barclays Wealth or their predecessors and have had excellent service on execution basis only. 44 years now.
19:22 on 22 February 2012
I think you need to look closer hargreaves profits 75% comes from trail commission on funds- what will happen to HL if RDR comes into play? HL profits drop 75% there charges will go up whereas barclays have nailed the trader & this will have little effect
19:31 on 22 February 2012
Peter,
If HL have clients interest at heart why do they never recommend Investment Trusts or Tracker Funds which over time have proven to give superior performance!! Good client service I agree, but not good ADVICE.
19:35 on 22 February 2012
I have been with H_L last 11 months only having paid heavily to Brewin Dolphin last 10 years !!!!Suddenly woke up and got on internet, newspapers etc.Learnt the basics and changed over to H-L .
H-L is good;Barclays will never be able to provide the personal service
that H-L provides.You can't beat H-L.........................Vinoo.
19:51 on 22 February 2012
When trail commision is withdrawn the fund managers could discount the AMC to compensate for the extra platform charges - after all they will be better off.
19:55 on 22 February 2012
Savings accounts and credit cards I've had that have been taken over by Barclays have soon seen worsening terms, so count me out. HL didn't simply "cut its trading charges" for everyone. The main recipients were the frequent traders, not the likes of me and Warren Buffet buying and holding. HL customer service is excellent, in my experience, but I agree 100% with John Shepherd on their restricted "advice." However you can get round that using their charting facilities and investment trust reports and accounts etc on the research tab.
20:14 on 22 February 2012
bwanakuba - me too
some of HL charges are a bit annoying, but i have looked around and decided to stay where i am
20:16 on 22 February 2012
This says it all:
Barclays: customer complaints down but 'still too high'
Customer complaints fell 6% in 2011, but were up in the second half of the year and high in investments and insurance.
It's not about charges (within a reasonable range) it is about service.
Will Barclays call centre be as good as HLs?
20:23 on 22 February 2012
Anyone who has ever dealt with Barclays knows they will never supply a professional service like HL, sorry not possible.........
20:29 on 22 February 2012
Use HL, customer service exceptional, can't see a bank with call centre matching them. Some of HL's charges may annoy people but you do not get something for nothing. It is the investment returns that are crucial rather than costs as most UT's have similar charges.
20:46 on 22 February 2012
A high street bank giving the same service as HL, I don't think so !!
Even in the field of investment funds the increases for the high street banks are always quite puny compared to the funds which are run by firms outside the large banks. HL has given a very good service during the past few years and long may it continue.
20:46 on 22 February 2012
I have been with HL for over 5 years and have nothing but praise for their customer service. However they do downplay investment trusts and sometimes push new funds which turn out to be distinctly average.
I will not be moving from HL (if I move at all) for at least 12 months, however, in order to let the dust settle following the abolition of commission at the end of the year. I am sure there are many more changes regarding charging regimes to come over the next ten months.
20:57 on 22 February 2012
re: "If Barclays are as bad at service in this area as in their retail banking ...."
Having been a customer of Barclays Stockbrokers for many years, I must say that their customer service people are really excellent, easily the best of any retail financial services company that I have worked with.
21:14 on 22 February 2012
I moved from Barclays Stockbrokers to HL and will not be going back. The service that HL give is quite exceptional.
22:11 on 22 February 2012
Another benefit of HL, in my opinion, is that when I deal shares the contract note is instantly available for printing. BSL still use the post and I waited 4-5 days for some recent transactions.
00:14 on 23 February 2012
Fund rebates from investment managers to platforms such as HL and like don't seem to have been mentioned so far.. When these are abolished the true cost may well be more apparent. The total expense ratios of funds don't seem to have been mentioned either along with the cost fund managers incur buying and selling within the portfolio. If the performance is there great but funds that appear low cost are not always. Roll on more transparency and lets see the factory gate price of units clearly published along with what the manager is doing. Some things do cost more. Fantastic service and advice on tax, trust, risk appropritenes, pensions, etc has to be paid for if you want it.
01:00 on 23 February 2012
I see that on the same day this new alliance was announced, another item stated, re Barclays, that "Complaints about investments, meanwhile, also rose significantly – up 77% on 2010."
Each person will have their own experience and views, but the overall reputation of a firm will have a huge influence on potential clients. Many of those clients will deal with the bank in other areas.
Their retail service is dire; no wonder when they have three separate customer databases. Barclays' reputation is bad, and not improved by the greed of their boss who refused to comment on what bonus he got during a year when their performance was down.
How many who read this get paid a bonus for failure? Bad PR does not build businesses. I see that nobody has comment that they choose to ally with Fidelity, who are not exactly racing ahead in this market.
From a marketing point of view this us excellent fro Hargreaves - being compared with a firm that is far larger than yours is always good news.
04:36 on 23 February 2012
Looks like a big win for HL and as an HL customer I'm not in the least surprised. There is no way Barclays can match HL but no doubt they'll splash the cash on promotion and spin and then be able to produce some statistics to show how great they are.
08:43 on 23 February 2012
I have used HL for a couple of years or so and their service has been excellent.
By contrast, I have had to deal with Barclays as a Power of Attorney and as Executor on peoples' estates. Barclays stand out amongst the banks as dreadful: unhelpful, obstructive and discourteous. Their Head Office teams follow processes that are nonsensical and contrary to State administrative procedures - e.g. demanding to see an original Will after it had been submitted as a public record - it beggars belief. Normally, I take poor service from the financial services sector in my stride, but one of Barclays' episodes was so poor I pursued them for compensation. Would I use them for my personal finances? They must be joking.
10:52 on 23 February 2012
I am amazed that people are comparing a stockbroker with a mass market retail bank. Barclays retail banking contact centre might well be an indifferent offshored organisation (I don't use them myself), but Barclays Stockbrokers' Scottish support staff are the best I have encountered as a customer. They are even better than my private bank, which is praise indeed. Comparison with the retail bank is irrelevent.
11:28 on 23 February 2012
Andrew,
I fully agree I am also amazed at some of the misguided comments. I have also found Barclays Stockbrokers to be excellent. We are talking about an execution only service - the new Barclays Trading Platform is excellent. Ultimately it is performance what matters and that is largely a function of cost. Fees can put a massivedrag on performance - this is particularly true with HL if you are a 'small' fundholder and hold a passive portfolio of tracker funds/ etfs etc. The fees structure for Barclays remains to be seen - I await with interest. Competition in this market is long overdue.
13:35 on 23 February 2012
I am not sure what misguided comments John Shepherd is referring to, I assume he is defending Barclays against HL, unless one has used both then it is difficult to comment fairly although I expect perception of Barclays is the problem.
I agree that performance is the main driver of returns but costs don't put a massive drag on actively managed funds as most have similar cost structures unless you have trackers and a small fund.
I see the main problem as the fund management business, it needs to lower it's cost structure and this needs to be done by pressure from the platforms whether HL or Barclays on behalf of their clients to get lower costs then hopefully everyone will benefit other than fund managers who like bankers sometimes seem to be living in a different world and do well whether markets are up or down. The whole system needs a good shake up!
18:35 on 23 February 2012
More choice is welcome
01:57 on 24 February 2012
I moved to HL from Barclays Stockbrokers years ago, and have nothing but praise for their service in every way. Never been any problems, and I use it a lot. The staff are so helpful and efficient if required, and the phone is answered instantly.
I have banked with Barclays for 40 years and in recent years it has got worse and worse in my opinion and of course this does reflect on Barclays as a whole, but am informed by friends that the others are not much better, so am still with them
08:50 on 24 February 2012
I have used HL for twelve years without complaint. When I owned and ran my own company Barclays were arrogant, aggressive, demanding and unsupportive until I didn't need their brand of banking any more, when they became oily, ingratiating and 'ever so humble'. I moved to HSBC!
Barclays could offer to pay me to run my portfolio and I still wouldn't have anything to do with them.
15:12 on 24 February 2012
You guys are comparing Barclays to HL. Forgetting the important factor that Barclays now have Fidelity backing them. Which should even the playing field dramatically.
15:50 on 24 February 2012
It might if Fidelity had much of a business here.
17:35 on 24 February 2012
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