Barclays has announced that it’s removing the customer fee from its Direct Investing platform.
The headlines naturally focus on cost savings. Customers could save more than £100 per year compared with some alternatives and, in a market where investing fees have steadily fallen over the past decade, this is a serious move (Holly Mackay from Boring Money gives an excellent breakdown of the maths here).
But when we discussed the announcement at BehindLogin, we saw a major win in making investment feel possible.
Cost comparison can win in provider selection, but perhaps the UK’s biggest investing challenge sits in building confidence.
Millions of people have money that could be invested, yet continue to hold it in cash. Not because they are unaware of investing, but because investing can still feel intimidating, complex and risky.
Viewed through that lens, Barclays’ decision starts to look less like a fee reduction and more like an attempt to remove one more barrier between savers and investors.
This article shares a range of views from across our team.
The UK remains a nation of cautious savers
New to the BehindLogin research team, Marianne Streames reminds us that we’re a nation of cautious cash savers. Recent FCA research found that 61% of UK adults with more than £10,000 in investable assets hold at least three-quarters of their wealth in cash rather than investments.
So millions of people have money available to invest but continue to hold it in cash. For some, cash feels safer. For others, investing feels like something for people who know more than they do.
Many worry about choosing the wrong investment. Others are concerned about losing money, wary of the risks, or simply don’t know where to begin. The result is that money remains parked in savings accounts while inflation quietly erodes its value over time.
Holly Mackay’s description of a “battle for middle England” feels particularly relevant here. Across the industry, we’re seeing growing efforts to encourage more people to invest. The Government’s “Take the Next Step” campaign featuring Savvy the Squirrel by M+C Saatchi is certainly having a moment. I’m a huge fan of the campaign and think Barclays has been smart to amplify it at a time when it is gaining significant reach and helping to normalise investing for a broader audience.
Reducing fees or reducing friction?
Our Research Director Tim Cryer suggests that the move is less about reducing fees and more about reducing friction.
Barclays already has millions of banking customers. Awareness of investing is unlikely to be the primary challenge. Encouraging customers to take action is.
Removing the platform fee eliminates one more reason for customers to delay or avoid investing altogether. It removes a barrier from the decision-making process and lowers the perceived cost of getting started.
What makes this particularly interesting is that Barclays may not view its investment platform as a standalone profit centre. If lower fees increase participation, assets under management, customer retention and engagement across the wider banking relationship, the long-term value could far outweigh the revenue lost from the fee itself.
Viewed through that lens, this begins to feel less like a pricing decision and more like a customer acquisition and loyalty strategy.
A market moving in the same direction
This announcement also reflects a broader trend across the investing market.
Over the last few years, we’ve seen sustained downward pressure on investing costs across the market. Providers such as Vanguard, Fidelity, AJ Bell and Interactive Investor have all sharpened their pricing propositions, while newer digital-first entrants continue to challenge established players on both cost and accessibility. As a result, pricing has become increasingly difficult to compete on.
As Founder Ollie Lane observed, we’re seeing a lot of movement in this space. The Government’s push to encourage investing, the arrival of targeted support, and increasing competition between platforms are all contributing to a race towards lower costs and fewer barriers.
The challenge is that pricing can only take providers so far.
If every platform becomes cheaper, what ultimately drives customer behaviour?
Encouraging people to take the first step
From a customer perspective, this presents a genuine opportunity.
As researcher Anna Smith highlighted during our discussion, many people hold savings in products that may not be delivering the best outcomes for their long-term goals. Changes like this can encourage customers to start exploring alternatives such as Stocks and Shares ISAs or investment accounts that they may not have previously considered. It can help people realise that investing isn’t reserved for experts or high-net-worth individuals. These products are designed for people like them.
Importantly, big announcements like this from Barclays can make investing feel more accessible and approachable.
Suddenly investing feels a little more achievable.
The providers that succeed will be those that help customers build confidence, understand their options and feel comfortable taking that first step.
What product teams should be watching
BehindLogin NED Iain Oliver flags an important distinction between trading and investing.
Most retail investors aren’t looking to actively trade. They’re looking for reassurance that their money is being managed well and that they’re making sensible long-term decisions.
For these customers, confidence often matters more than cost. If a provider does a good job, a small difference in fees becomes far less important.
So for product teams, what does “doing a good job” look like?
- More people discover that investing is for people like them
- Customers clearly understand their options
- Risk is explained in a way that feels relevant and understandable
- It’s easy to move from curiosity to action
- Customers build confidence over time through positive experiences and outcomes
Removing a fee may encourage someone to consider investing and take the first step. The product experience ultimately determines whether they become an ongoing investor.
Making it feel possible
Through our Custom Research at BehindLogin, we’re seeing growing investment in tools, features and journeys designed to help customers make better financial decisions. Targeted support, personalised guidance, educational content and simplified onboarding are all helping people take the next step.
There’s still further to go further in learning and responding to customer hesitations and we look forward to seeing further product releases in this space.
The fees may have disappeared, but the challenge of helping customers invest with confidence remains very much alive.
When it’s a race to the bottom, the next challenge is making investing feel possible!
