Barclays Bank acquires UK business of Charles Schwab Europe

Barclays PLC today, 31 January 2003, announces that it has acquired Charles Schwab Europe, CSE. The acquisition brings together Barclays Stockbrokers, the UKs largest retail stockbroker, with CSE, an award winning execution-only broker, to create the leading market player in UK retail broking. The unaudited net tangible assets of CSE at the end of December 2002 amounted to 17m.

The CSE business has a client base of more than 150,000 accounts, and an award winning website. The business will be integrated with Barclays Stockbrokers, part of Barclays Private Clients, a process expected to take between six and nine months. The combined business will have over 500,000 execution-only client accounts.

During integration the services provided by CSE and Barclays Stockbrokers will remain largely unchanged in the interests of maximising service continuity for customers. Post integration the objective is to leverage the complementary strengths of the two businesses, bringing together Barclays Stockbrokers independent research and overseas dealing capabilities with CSEs stockbroker service, which is mainly distributed through the on-line channel.

Barclays Stockbrokers proposes to consolidate the two operations at its sites in Glasgow and Peterborough. Once integrated, it is expected that the CSE sites in Birmingham and Milton Keynes will close. It is anticipated that closure will take place during the second half of 2003.

Commenting, Bob Hunter, Chief Executive, Barclays Private Clients, said. Todays acquisition of Charles Schwab Europe furthers our strategic ambition of delivering world-class investment at great value. By combining the UKs largest stockbroker with the player offering the best on-line service in the country we will expand the breadth and quality of investment services that we can offer the customers of both organisations. At the same time we expect to achieve significant efficiency gains.

William Atwell, Executive Vice President, Schwab International, said. Were proud of what we have achieved since first establishing our presence in the United Kingdom in 1992. We are one of the UKs leading execution-only brokers and have won numerous accolades for our website and our customer service.

But we cannot ignore the fact that we are operating in a very difficult market. As we looked to the future it became clear that we could not achieve our market share goals in the UK without an acquisition or a significant investment in the expansion of our pound sterling services to a fuller offering integrated with banking. Ultimately we reached the difficult conclusion that such an investment did not make sense for our firm at this time. However, in line with our corporate strategy, we will continue seeking to aggressively grow our US dollar business in the UK and elsewhere.

In Barclays I am confident we have found the best new home for our pound sterling customers: a company that shares our passion for customer service and that will provide investors with the rich array of banking and investing services they deserve. Well work closely with Barclays Stockbrokers to ensure the transition is as seamless as possible for customers.

END

I have just had a letter informing me that my broker Barclays is going to merge with Charles Schwab. My first reaction was 'great' better service more products etc. But then I dug a little deeper and visited Schwabs web site.

http://www.schwab-worldwide.com/europe/

I have found that they charge nearly 10 more per deal than BSL. They have a yearly charge and a tiered pricing scheme rather than a flat rate. I deal a lot but do not like being pressured into dealing just to get a cheaper deal.

Their dealing interface is not as good as BSL's current setup.

Charles Schwab seem to be more interested in selling managed investment products rather than a dealing service. I hope than it is a beneficial merger and that some aspects of the Charles Schwab service will change also.

I use Barclays not because they are the cheapest, but because of their service which is excellent. Although the second the service declines or I have to pay any more than I am currently I will be seeking alternative providers.

Any thoughts from current Barclays Stockbroker clients or Charles Schwab clients?

I have used Schwab for ISAs and PEPs for many years and it has become clear to me that with various promotions that they have been struggling. Their service has been fine in the recent past and screens easy to use but Ihave not taken the time to use their other facilities; easier and better to access elsewhere. I am interested to hear what you have to say about Barclays ... banked with them for 40 years and increasingly disatisfies. I dont think you have any concerns .... it appears that Schwab is going effectively be closed down including call centres and eventually all will be rebranded Barclays.

Pip,

I have been with Barclays for over 10 years and have never had a problem with them. I have even worked for a couple of rivals, NatWest/ RBS, but will never bank with them again after being forced to hold a staff account. Little things like over charging me nearly 2000 and then not apologising when I pointed it out!

In my mind Barclays are more professional than the others, although the first spot of bother I have had was recently when the started to lay off personal bankers and I visited 4 branches to find 1!

Their trading facility is top class at the moment, which is why I am concerned. I use other dealing interfaces such as IG, and while good Barclays tops them all. You always get a prime discount to the rest of the market and I have always paid the lowest price available. Their commission is a little higher than some, but you get a lot for your money.

Hopefully as you say Schwab will just be eaten up and maybe some of their expertise used, but I hope their policy of flogging investment products is lost and not adopted by Barclays.

Anyone over 50 could trade through Saga's dealing service
run by Pershing at a flat rate of 9.50 per trade online.

In my opinion Barclays Active Trader Hotline is first class.
I have always been delighted with their service.

They deserve each other - in March/April 2000 as the tech boom came to an end and investors tried to get out,neither were answering the phones or coping with existing clients while at the same time they were extensively advertising for new clients.
Both very,very cynical - cost investors a lot ,myself included ........scandalous really but suppose no votes in standing up for private stock market investors.

Well said, Locket. Most of the Big Boys were never really interested in
finding out what the 'private investor' wanted. When the markets were flying high, they did not anticipate this bear market. Hence their indifference to the likes of you and me. But things have changed and online services mean that
investors too have become broker-wise.

At one time or another I have used the services of amongst others:
Schwab, TDWaterhouse (for a short while after they took over Yorkshare,
which provided a really fair and cost-effective service for the private investor
but TDW does not), Investorlink (Walker Crips), Pershing Securities,
Pilling (Manchester), James Brearley, Wise Speke (now part of the Dolphin Gp and iDealing(which I found rather inflexible and they don't have a telephone service).

I think it is a good idea to remain registered with more than one broker, just
in case...! And anyhow, most of them do not have an 'inactivity' fee, so one often remains on their books, even if one has not used their services for a while.

At present I use comdirect for most of my needs and Hargreaves Lansdown for some
services. I find comdirect has some commendable features: 12.50 flat rate for
online or telephone dealing, secure communication facilities, a superb research
centre (accessible only to clients),a 1, 30 and 90-day limit order facility
and generally the price quoted is marginally better than that quoted by some others.

Many of the offline brokers have still not woken up to the fact that they are not going to keep all their private clients with their ridiculous charges e.g. 1.65% or more, with a minimum charge per deal. One would think that the bear market would have encouraged them to take 'corrective' measures, but no, it seems, as you imply, they don't want execution only 'small fry'!

I've recentlyt opened an account with comdirect. The idea was to use it for short term purchases as the costs are way lower than Barclays. I still have a certificated account with Barclays, but may consider using comdirect for that too, as the extra certificate charge + dealing charge together is still less than Barclays minimum charge!

I'm also in the process of opening an account for an investment club because again the charges are extremely low. There have been too many times the investment club has missed selling because the extra 20+ that barclays costs us on buying & selling a share is the difference between cashing in and missing the boat.

Post Schwab, not sure I want to keep all my stock in a nominee account having changed a lot for safety. Do any of the online brokerages you recommend allow some stock held on certificate? If so who and how much?

If you are prepared to pay a bit more for a certificated service
there are some good ones around. I have used InvestorLink (0800 289 600) for years
and they have some good offers. e.g. if you deal three times or more on
the same day, they have special offers, which brings down the cost of dealing.
Never had any problems with them, but for one deal there is a minimum charge of
15 pds to 500 pds, 17pds to 1700pds and thereafter 1% on the size of the deal to 5000pds. TDWaterhouse also have competitive rates for a certificated service.
Hargreaves Lansdown are excellent.
They have a nominee service and I think still offer a certificated service and charges are reasonable. Phone 0845 345 0801 for details.
Your best bet is to get hold of the latest APCIMS directory which lists
every stockbroker in the UK,which is a member of apcims and the services each one offers. The Directory is free - the telephone number used to be
020 7247 7080 or send them an email: info@apcims.co.uk

?? is anyone else having problems with BS ??

I get trades that don't get done,
settlements that get reversed & screwed up,
cash transfers are completely impossible for the last 4 weeks +++ & even get recalled days later for no other excuse than "the sysem"
verbal deals done at a different price than authorized
limit orders that the market trades back & forth through the limit price & nothing happens
& on & on & on

seems every day its several calls to try & straighten their mistakes & omissions

?? is it just me or ????

I was a little P OFF with the change initially, but only buy and sell shares. I don't use CFD or T+ trades. Bs. seems to have setled down, though unless the stop loss mechanism comes into force I will change more of my dealing to Comdirect. I think I prefer Comdirect and its research features are VG.

mbbcat, are you spreadbetting? I only deal in shares and any problem on line has been sorted on the phone. Really pleased with the back office. The stop loss facility appeared this week. I have never used it, don't know how. I haven't spent much time on research since at first it was not as good as Schwab so I looked elsewhere. I'm not interested in funds but perhaps it's worth spendng some time researching their research. I'm really glad I transferred to Barclays, feel safe with them.

I have also not had any big problems with Barclays Stockbrokers. Just a few niggles which got quickly sorted out. The website used to be aweful, but following the merger is very good. I have also found the service to be good too.
I trade about once a week thru them, usually on-line, occasionally by phone for small shares with a a low NMS. But I don't use their CFD service or limit orders, so maybe they have a problem in those areas.

this is dealing in shares - dread to think what would happen if there was margin invoolved as well!! :-(

ok there were occsional (& not so occasional) huicups with Schawb but were easily sorted normally - this lot seem to be competely hopeless & inept @ least in my experience.

Have tried complaining to the exchange & fsa but no joy so far

I'm really sorry to hear this mbbcat. Whenever I have a problem they are very helpful, do you ring Signature Services - 0845 310 5011? When buying or selling shares on line there is sufficient detail to decide whether or not I'm getting a good deal and I can go ahead or cancel. I always use a limit.

Angi.

You excited me with your post saying that Stop losses procedure had started on Barclays. Unfortunately, this feature is at the moment it is limited to the select few while testing it out. But its coming.

If you are interested in stop losses, have a look at Chapter 5, Managing Trades of Technical Analyses for Dummies by Barbara Rockefeller Published by Wiley Publishing. Inc..

The format of the book is helpful and the basis and techniques described are IMHO sensible.

Sorry to keep plugging this book unfortunately I have no financial interest in other than having purchased it.

One of the things I dont like about Barclays is their charges for ISA and PEPS I think as the majority of the processes are computerise now, they could be a little cheaper.

Exit or transfer fees are high.

Mind I would probably bleat if they paid me for using their accounts.

I also think when there was a cockup of some sort (Usually my fault) CSchwab seemed a little more generous.

Fred1new,

Thanks for the tip. When I transferred from Schwab Barclays agreed to an acceptable charge for ISAs and PEPs. I know they no longer need to reclaim tax paid on divis thanks to Gordon Brown but they still look after the portfolios and also pay interest on cash in the account. It might not be much but it's useful to keep some cash.

I know what you mean about Schwab "being a little more generous", and they were very charming whilst helping to right your mistakes but I won't forgive them for throwing in the towel.

It depends on what the towel was covering. :-)

Ref : Barclays Stockbrokers > Coming soon Advanced Stop Orders, Extended settlement T+10, and Read Time Level 2, also with Price Improver 95% of the time they beat LSE displayed price, plus if you trade more than 10 times per month all trade are 7.50, so with price improver you are 'at times trading for free' just the .5% stamp duty to consider.....
What a cracking service....
Nite t nite all..
Mike....

Sorry a 'typo' it's late! I ment 'Real Time Level 2'