Barclays Smart Investor: one of the better high street bank investment options

Barclays Smart Investor is probably best-suited to:

• Existing Barclays customers looking to keep all their banking and investment portfolios tied up neatly with one provider
• Those looking for a ready-made portfolio

If you're a happy Barclays customer, you could do far worse than choose Smart Investor for your Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAISA or General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowancegeneral investment account, although you could get a better deal elsewhere on your A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPP.

If you're not an existing banking customer, I don't see many reasons to choose Barclays Smart Investor over one of the low-cost specialist investment platforms such as AJ Bell, Fidelity or InvestEngine. The one place where Barclays stands out as a possible option that these providers, is in their ready-made portfolio performance which is an exception 50% over the past five years, compared to an industry average of 26.4%.

Accounts

Barclays Smart Investor offers its customers access to:

• General investment account (GIA) is an account designed to provide access to investments. You may be liable for tax on any income or capital gains earned within a general investment account but this can be a useful vehicle for anyone who has maxed out their ISA allowanceGeneral investment account
• Sometimes called an investment ISA, a stocks and shares ISA is an individual savings account that allows you to invest in shares, unit trusts, investment funds, and bonds. You will not need to pay tax on any income or capital gains earned on investments within an ISAStocks and shares ISA
• A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSelf-Invested Personal Pension (SIPP)

That's one of the widest selections of products for a high street bank investment service.

Under the Barclays brand umbrella (although not within the Smart Investor brand), Barclays also offers access to various A cash ISA is a type of individual savings account where you can earn tax-free interest on your saved cashcash ISAs including an instant access cash ISA, 1-year flexible cash ISA and 2-year flexible cash ISA.

An investment ISA (Individual Savings Account) is a tax-efficient wrapper in which you can buy, hold and sell investments.

The Barclays investment ISA is a ‘flexible' ISA, meaning it's possible to withdraw funds from your ISA without it affecting your overall allowance. In other words, you can withdraw funds and repay them at a later day within the year without it counting as a separate, second payment.

Discover our best-rated investment ISAs

The Barclays SIPP isn't actually administered by Barclays – it's an AJ Bell product so you'll be subject to some additional third party fees. That's not a bad thing, however, as AJ Bell's SIPP is well-administered and you'll find plenty of investment choice. You'll still be paying Barclays prices for the SIPP, which is a shame as dealing fees are higher than AJ Bell's. Going directly through AJ Bell for the SIPP, therefore, might be the better option.

Discover our top-rated SIPPs

Barclays offers a wide range of cash ISAs – in fact, it's one of the largest ranges for this product type that I've come across. All can be opened with just £1 (or you can transfer an existing cash ISA in from elsewhere) and are either instant access or they allow you to make up to three withdrawals per year, to a maximum of 10% of your current balance each time.

Interest rates for the cash ISAs vary from 4.65% (1-year fixed-rate term) if you're a Premier account customer going for the 1-year Flexible Premier Cash ISA, to 1.66% AER on the first £10,000 (and 1.21% thereafter) on the Instant Cash ISA.

Assets

Barclays provides customers with access to over 8,000 different investments to choose from, including:

• UK, US and European stocks
• ETFs
• Funds
• Investment trusts
• Bonds and gilts

That is not a huge choice when compared to the likes of interactive investor, or Saxo, or even AJ Bell.

When you invest with Smart Investor, you will need to factor in the following costs:

Annual fees

Up to £200,000: 0.25% of your investment value
Over £200,000: 0.05% of your investment value

If you have a portfolio worth just over £200,000, this is one of the lowest rates you'll find anywhere. The 0.25% rate on sums under £200,000 is also very competitive – the same as is charged by AJ Bell.

Dealing fees

If you buy and sell shares, ETFs, investment trusts, bonds or gilts, you will pay £6 for each deal. If you plan to trade often, it's worth taking a look at a provider that offers zero commission on trading (like Trading 212, eToro or BestInvest if it's just US stocks you're buying) as, while £6 is cheap compared to Halifax's £9.50 per trade, Lloyds' £11 per trade, and HSBC's £29.95 per trade on international stocks, there are certainly far cheaper ways to trade in the markets.

See our Best trading platform page for the top options for regular traders.

FX fees

First £5,000: 1%
£5,000 – £10,000: 0.75%
£10,000 – £25,000: 0.5%
£25,000 – £250,000: 0.25%
Value over £250,000: 0.1%

These are high rates when you compare Barclays to many other investment providers. Having said that, it's not the most expensive – interactive investor, eToro and Halifax charge more for international trades as this chart shows:

Fund costs

These are levied by the fund provider and – unless you’ve chosen a Barclays-managed fund – the product costs don’t go to Barclays. Product costs vary and can be found in the Key Investor Information Document.

SIPP costs

Barclays' A self-invested personal pension (SIPP) is a type of private pension that allows you to control the specific investments that make up your pension fundSIPP is actually administered by AJ Bell, so it is subject to additional costs on top of the standard annual fees charged by Barclays. There's an annual £150 SIPP admin fee and, if you're in flexi-access drawdown, there's an additional annual £120 fee. That means Barclays comes out as quite an expensive option for a SIPP. Given that it's administered by AJ Bell, you might want to go directly through AJ Bell. They also charge 0.25% in annual fees (reduced to 0.10% for accounts holding £250k – £500k, and removed altogether for accounts holding £500k+), but you'll avoid the costs of using a third party provider that you'll incur with Barclays, and AJ Bell's dealing fees are also cheaper.

Transfer costs

There is no fee for transferring investments.

Interest on uninvested cash

When you open a Barclays Smart Investment Account, you’ll gain access to the Investment Saver service. This means you can earn interest on any uninvested cash you're holding in your account.

Current rates of interest are:

• 1.65% AER/gross per year variable on balances of £1 – £10,000
• 1.15% AER/gross per year variable for additional balances of £10,000.01+

Those rates aren't particularly generous, as you can see from this comparison chart:

The verdict

Barclays fares reasonably well compared to other high street banks and sits quite competitively among other non-high-street-bank providers too, unless you plan to trade non-UK assets.

The following three charts show how Barclays compares to its high street neighbours when trading (1) US stocks, (2) UK stocks, and (3) funds.

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