Investing in funds: what’s changed?
In 2014 the Financial Conduct Authority (FCA), our regulator, changed the way providers of investment products and services charge their customers. These changes, part of the Retail Distribution Review (known as RDR), make it easier to understand who you are paying, how much, and what those charges relate to.
We’ve applied the new regulations to all funds bought through Barclays Stockbrokers since 1 March 2014. We also then actively converted clients’ existing fund holdings from bundled to ‘clean share classes’, so that you benefitted from the lower charges as soon as possible.
As a result the cost of investing in funds has reduced for most Barclays Stockbrokers clients. Previously the cost of administering your fund investments was met by payments we received from the fund manager, which was paid out of the Annual Management Charge (AMC) the fund manager charged you for investing in their fund.
The new rules mean that you now pay us a separate Fund Administration Fee for the administration of your fund, and the AMC applied by the fund manager is often lower.
The key changes we have made are:
- Access to new, lower cost 'clean share classes' from fund managers who no longer pay us trail commission
- Converted existing fund holdings to clean share classes where we believed this was beneficial to you
- Introduced a Fund Administration Fee, payable directly to Barclays Stockbrokers.
In November 2015
- Converted most remaining holdings to clean shareclasses where available
- Confirmation given where no conversion is possible, for most remaining holdings.
- From 1 January all fund holdings are liable to the Fund Administration Fee
- A small number of funds remain to be converted to a cheaper version, or confirmed that no cheaper version is available. Until this is confirmed we will waive the Fund Administration Fee on the holding. We receive no trail commission on these holdings.
View our video
Our video explains the RDR changes and the benefits for investors.
Fund Administration Fee
The fee is 0.35% per year on the value of your chargeable fund holdings, and is calculated on the daily value of your holdings (up to £500,000). The minimum charge of £35 per year, where it applies, again is calculated daily. See examples on how the fee works
Will everyone be better off?
While you now pay two separate fees, one to the fund manager taken from your fund investment, and one directly to Barclays Stockbrokers; investing is now cheaper for the majority of our clients. However if your fund holdings total less than £4,000 it is likely you'll pay slightly more. See our graph for more information
This should mean that it is now easier for you to know what you are paying us for administering your investments and what you are paying the fund manager for investment management.