Barclays Stockbrokers, today announces its new clean share class pricing structure on its Funds Market platform – pricing it believes to be clear, simple and fair. Underlining its belief in fairness for clients, Barclays Stockbrokers is also announcing that, from 1 March 2014, it will proactively and automatically convert existing fund investments held by clients to clean share classes, where available and where the combined cost of the clean AMC and the Fund Administration Fee is lower than the current bundled share class.
Barclays Stockbrokers is making clean share classes available for over 2000 funds, giving investors access to a fund universe with an average AMC of 0.68%. It is also introducing a Fund Administration Fee of 0.35% per annum, and a £35 minimum charge payable on new investments into clean share classes and where existing bundled holdings are converted into clean share classes for existing clients¹.
Barclays Stockbrokers is offering a flat charging structure so all clients benefit from the same low level of Administration Fee, as well as a cap meaning no Fund Administration Fees are paid on fund holdings over £500,000.
By making clean share classes available as well as actively and automatically converting existing clients’ fund investments, the new charging structure is intended to benefit both new and existing clients. In terms of cost savings, someone with £25,000 invested in funds could on average save £72.50 in a year alone².
Alastair Thaw, Director, Barclays Stockbrokers, said: “We are introducing what we believe to be a clear, simple and fair RDR funds pricing structure. The Retail Distribution Review has encouraged a more competitive marketplace, however we recognise that the changes can be confusing. Investors need clear and simple information about the price they are paying and we have designed our pricing structure with clarity, simplicity and fairness at its heart.”
Mr Thaw continued, “Where it will benefit our clients, we will be actively converting existing client fund investments to clean share classes from 1 March 2014 because we believe it is the right thing to do and supports the aims of RDR.”
Additional pricing changes
In addition to the changes being made as a result of RDR, ahead of the 2013/14 Tax Year End period, Barclays Stockbrokers is also revising its ISA charges to simplify the pricing structure and reduce the cost of investing. From 1st March 2014, all Barclays Stockbrokers ISA clients will pay a standard Investment ISA administration fee of £30 plus VAT per annum. However, this ISA administration fee continues to be waived where clients are fully invested in funds.
Separately, trading commissions have also been reduced to benefit equity investors. Not only will clients pay £1 less per trade than before but they will not be required to place as many trades in order to move to a lower commission rate.
Alastair Thaw, Head of Barclays Stockbrokers, said: “We have taken the opportunity to revise not only our funds charging structure but also our ISA and trading costs. We expect our clients to benefit from both lower equity trading charges and a simplified charging structure as we enter Tax Year End 2013/14.”
¹ Clients using the regular investment service (drip feeding) will be exempt from the minimum fund administration charge.
² £25,000 invested in current bundled share class at current average bundled AMC of 1.32% pa = £330. £25,000 invested in clean share class funds available from 1 March at average clean AMC of 0.68% pa + Fund Administration Fee of 0.35%= 1.03%. Annual saving is £72.50.