Wealth managers have said Barclays' plans to launch low-cost investment platform, Barclays Direct Investing, is a good move for the banking industry, but its success will depend on the quality of the service.
Barclays has announced plans to combine its banking and investment management divisions to create an online platform which will allow customers to manage their savings, current accounts and investments in one place.
Lee Robertson, CEO at Investment Quorum, believes the launch is a good move for the bank as it addresses developments in technology and the idea clients want easy and instant access to all their financial needs.
He said: "Barclays has a big customer base and in this increasingly digital age, clients want ready access to all their services.
"If it is accurate, timely and secure, then I do not see any reason why it could not work. Banks are the cornerstone of people's finances."
However, the success of the new venture will come with its execution, according to Adrian Lowcock, investment director at Architas.
He said: "Barclays stockbroking has been a sleeping giant in the DIY investing space, having not been proactively marketed in recent years.
"Despite the tarnished reputation of many banks, Barclays remains fairly trusted. Service is going to be key to the success of Barclays Direct Investing as this is something banks have not always got right.
"Its main aim is to provide a better set of tools and services for existing customers. With access to millions of clients through its banking system and the reach of its brand name, Barclays should be able to grow scale significantly.
"It is also important that most of what Barclays will offer is not just advice, but tools and guidance. This is appealing to a new generation of investors as it does not use the previous model of face to face advice."
Rival for Hargreaves Lansdown?
The new platform could well rival Hargreaves Lansdown, the biggest D2C platform in the UK.
Barclays intends to charge customers 0.2% to hold funds versus the 0.45% on the first £250,000 invested through the Hargreaves Vantage accounts.
Lower fees and transaction costs might make it more attractive, but Lowcock adds Barclays must do more to incentivise investors to change platforms.
He added: "Clients need a reason to leave and while the price could be that trigger, they will need to see from the experience itself, which is critical for success."
Darius McDermott, MD at Chelsea Financial Services, said: "The bottom line is Barclays have the brand and breadth of banking clients which may be tempted into this service.
"This will give them a better head start than most who are trying to get into the direct consumer space. The increased competition is good for consumers."
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