This blog gives you the latest topical news plus some informal comments on them from ShareSoc’s directors and other contributors. These are the personal comments of the authors and not necessarily the considered views of ShareSoc. The writers may hold shares in the companies mentioned. You can add your own comments on the blog posts, but note that ShareSoc reserves the right to remove or edit comments where they are inappropriate or defamatory.

Barclays Stockbroking Complaints

Several newspapers and on-line news services have reported this week on the debacle at Barclays. They launched a new “Smart Investor” site to replace their Barclayshare share trading service. The complaints range from failure to advise new account log-in details, support service uncontactable, old features missing (or perhaps simply moved elsewhere and not easily found in some cases), higher charges (fees restructured), to some account types or share holdings being no longer permitted.

Barclays have integrated it with their on-line bank account service which probably makes sense, but they clearly got some basic things wrong with this kind of migration which are:

  1. Beta testing of the new software on real customers must have been limited in scope, if done at all.
  2. All clients were moved at the same time and forcibly. No parallel running, no options for clients to choose when to migrate, etc.
  3. If possible, avoid “big bangs”. Changes to systems should be done gradually and in stages to avoid massive new learning processes by clients.

When will IT teams learn that folks get “habituated” to software and get very unhappy when it’s changed, even when the new system works well and has more features (and in Barclays case, it obviously had some problems). It’s like moving the products on the shelves of supermarkets so the customers can’t find their favourite foods any more. Now Paypal did a similar migration recently, and the new menus were hopeless to begin with, but they allowed you to drop into the old menus for some time. So only some minor cursing was the result. But Barclays may lose some of their 200,000 stockbroking clients from this debacle it seems.

Stockbroking platforms are really important to get right as they involve large value transactions by often sophisticated traders but there have been several examples over the years of new platforms failing to meet the basic needs of clients.

What do you do when this happens? Move your account to someone else? If only it was that simple.

From several experiences of doing this, all I can say is that you won’t have much difficulty finding someone to take it on, but the process often takes months with endless hassles along the way.

Indeed I have complained to the Financial Conduct Authority (FCA) about this in the past – see

Anyone who encounters this problem should also complain to the FCA and encourage them to tackle it. If you can switch a bank account in 7 days (and that’s mandated), why not a stockbroking account?

The complexity partly arises from the use of nominee accounts and the problems with funds rather than direct shareholdings, but these difficulties are surely fixable if we had a decent share and fund registration system and stockbrokers were motivated to get the issue sorted out. Needless to point out that stockbrokers don’t like to make it easy to switch so won’t do so unless pushed because they like to lock their clients in (hence the use of nominee accounts also of course).

In the meantime, if you do decide to switch you may find it easier to move all your holdings into cash first – but you need to be wary about the tax implications of doing so.

This FCA web page tells you how to complain about Barclays new service, and about delays in transfers, here: . But if you wish to complain about the general lack of action on broker transfers, you could write to David Geale, Director of Policy, FCA, 25 The North Colonnade, London, E14 5HS.

Roger Lawson (Twitter: )

  1. Stephen Burke says:

    I’m one of the people affected, I’ve been using Barclays Stockbrokers reasonably happily for about 25 years and they currently have about half my portfolio. The new web site is fairly horrible but I’d probably live with that if it’s all it was, and they’ll probably fix the biggest complaints over time. By the way, they didn’t move all customers at once, there was a first wave several months ago, so they should have got some feedback. However, they probably chose people with small portfolios who traded infrequently who aren’t representative. They also clearly haven’t had enough support staff to deal with questions and complaints.

    For me the biggest problem is the new scale of charges, they used to charge a flat £30 a year but now it will be 0.1% of the portfolio value with a cap only at £1500 a year, i.e. £1.5 million total. They’re presumably trying to align it with unit trusts which they’ve reduced to 0.2%. However from my point of view it’s outrageous, it certainly puts Hargreaves Lansdown’s £45 cap in a different light! Although it doesn’t affect me they also have a minimum charge of £48 a year which is like to deter small investors. At least the size of the debacle may deter any other brokers from doing the same …

    They’ve also got a lot of criticism for removing a lot of “extras” – no more international shares, no more SIPP, no unified access for people who manage someone else’s account, e.g. a spouse, no access for anyone who lives abroad. My impression is that they’re no longer trying to be a serious stockbroker – possibly from a corporate view it wasn’t profitable enough, so now they’ll just offer it as an adjunct to people with unit trust holdings. There’s no exit fee and they don’t seem to be making any attempt to deter people from leaving.

    Personally I think it’s probably inevitable that I’ll have to transfer, but I’ll wait a bit – there’s a faint hope that they’ll back down, the initial wave of transfers will have passed, and markets are (perhaps) less volatile after December so less bad to be frozen out for several weeks.

    I’ve also had a Barclays current account since 1980, which was moved some time back to their premium “Premier” account based on the size of my investments with Barclays. If I transfer the investments it’s likely that I’ll go back to a normal current account, which is uncompetitive in the current market so I’ll probably switch that too. It remains to be seen if the banking side of Barclays will be happy with that outcome …

  2. Stephen Burke says:

    I’m just looking at Hargreaves Lansdown’s annual report, and I notice that they say that their margin on funds is 41 bp and on shares is 33 bp so not all that different – no obvious reason there to ditch the share dealing or change the fees. I’m also surprised that funds are only 57% of AUA.

  3. Stephen Burke says:

    And not really relevant to this post, but I notice this rather blunt comment in the HL remuneration report:

    “The Committee recognised that the previous Long Term Incentive Plan was not as effective in achieving this outcome as had been intended. The scheme did not result in directors building up a long term shareholding and hence long term alignment with shareholders. Furthermore, the scheme did not act as an incentive, had no retentive draw and did not influence behaviour. “

  4. Stephen Burke says:

    Out of interest I just looked to see how I would vote or attend an AGM with Smart Investor. It took me quite a while to find the information, and in the end it seems the only way is to phone them. Of course at the moment that’s likely to be impossible as their phone lines are overwhelmed, but even aside from that they’re clearly making it as hard as possible to exercise our rights.

  5. Julian Hermele says:

    Thank you Roger for writing this and in particular for providing the details on how to complain to the FCA if we have problems. I have thoughts on this question from three angles:
    1. As a long term investor through Barclays Stockbrokers. I have been with Barclays Stockbrokers for 10 years. I have a dealing account and ISA and a SIPP. Overall I have been pretty happy with them. While some things were not great (like pretty much all the others they insist on nominee accounts), I could trust the accuracy of their system. It worked and often offered transaction rates significantly within the spread.
    2. Not so long ago I ran a management consultancy practice specialising in accounting and financial systems. In that work I took responsibility for and project managed several large financial systems implementations. There are quite a few things you need to do, as a project manager of a large new system, in order to reduce the risk of major problems. Barclays seem not to have cut lots of corners / failed to carry them out effectively
    3. I would be very interested in your thoughts on the best way to move accounts, if Smart Investor is not going to work for me, without incurring huge risks and costs during the transfer.
    More on all three below

  6. Julian Hermele says:

    My experience of Smart Investor as a long term Barclays Stockbrokers client
    1. It has taken me 10 days to get into the system. The login details provided did not work because the system recognised that I had formerly been a Barclays Bank client and had a few years back transferred to another bank. Because Barclays have merged the login for banking and stockbroking the system thought I was an ex client and refused access. Barclays tried to fix this by sending out a new passcode by post – despite my explaining that I am on holiday away from home. The new login details now work and I can access my accounts, though the error message telling me that I will not be allowed access still shows
    2. Overall I have spent 4.5 hours on the phone to customer service getting my login to work
    3. At first glance (I am trying to have a holiday and not spend all my holiday time on Barclays) all my shares and probably all my cash are present and correct
    4. Lots of clients have had worse problems. The replies to a couple of Investors Chronicles articles on the subject give plenty of horror stories
    5. I have never used the research and information provided by Barclays. I find Sharescope / Sharepad and Stockopedia to be much more useful. So it does not worry me that much of this information is reported to be missing
    6. It may be a problem that Smart Investor no longer allows the holding of foreign stocks, though I can hold these with one of my other brokers
    7. Some of the information provided on the site is plainly gibberish. The front page tells me that my portfolio has grown by 496% in the last year. I wish!
    8. When I get back home I will have a proper look at the system and decide whether it can work for me

  7. Julian Hermele says:

    As a project manager of multinational / FTSE 100 / major government department financial systems developments there were a few clear guidelines that Barclays seem not to have followed:
    1. check out all current functionality and don’t drop any functionality without good reason. It looks as if the main objective of this new development was to compete with Hargreaves Lansdown for those clients who just want to invest in a few recommended funds. It must have been possible to handle this and the new charging regime without building a new system from scratch
    2. develop slowly and steadily if at all possible
    3. do a phased cutover whenever possible. A big bang cutover is much more difficult and risky
    4. Produce a detailed test plan. Make sure you test all reasonable combinations of circumstances. For example a good test plan would have checked for Barclays Stockbroker customers who were former (but not current) banking customers. This would have ensured that I could have logged in on day 1
    5. Don’t go live until testing has resolved all major errors
    6. Train staff thoroughly before going live. More than 4 hours on the phone to customer service proved that this had not been done
    7. Provide plenty of well trained staff to manage the cutover
    8. Make sure the call centre is accessible. An hour’s wait during which a friendly voice assured me that I would be dealt with soon is not acceptable. Information on the length of the queue would help
    I would have fallen on my sword if any of my projects had ended in such a shambles

  8. Julian Hermele says:

    When I get home from my holiday I will check out the site thoroughly. If it turns out that Smart Investor is not a good home for my investments I will need to find a good way to move that part of my portfolio that is currently with Barclays.
    Do you have any advice on how to move my Dealing account, SIPP and ISA to another provider with significant cost and risk? My main concerns are:
    1. Transferring in specie (transferring my current holdings) can easily take several months during which I would be unable to deal. Any bad news from one of my investments, and bad news that affects the markets as a whole could result in me incurring huge losses as I won’t be able to sell out of my holdings
    2. The second option is to sell my holdings and transfer the cash. But even this can take several weeks during which time:
    * I will miss out on any gains the market makes
    * I will incur selling and buying costs
    * I will incur costs resulting from the spread between the buying and selling price
    Any advice on how to handle this will be more than welcome. And many thanks again for highlighting this issue to Sharesoc members.

  9. marben100 says:

    Hi Julian,

    Regarding moving to another provider, the responsibility for ensuring the move goes smoothly and at least cost to you rests largely with the new provider. You therefore need to pose those questions to them and satisfy yourself that they will take appropriate measures to make the move as efficient as possible. Moreover, many new providers will offer to rebate any exit/transfer fees from Barclays, so as to make the move cost-free, on a cash basis, to you. Posing these questions will help you find a good new provider. In your shoes I would ask about their experience specifically with transferring other accounts from Barclays.

    Good Luck!

    Mark Bentley

  10. marben100 says:

    An update on the situation with Barclays here: It looks like the Financial Ombudsman service is getting involved:

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