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Disgruntled customers of Barclays’ DIY investment platform are demanding compensation following a series of IT glitches, with some calling for regulatory intervention after dividend payments were delayed.
This week, Barclays admitted that dividend payments on 11 popular FTSE income stocks had been delayed by two weeks or more following the migration of its old Barclays Stockbrokers service to the new Smart Investor brand over the August bank holiday weekend.
“I would join a class action to fight this because it’s appalling,” said one FT reader with investments on the platform. “I’ve been logging on every morning looking for my dividends and they aren’t there . . . I make plans around this income that I know is due, but now I can’t. It’s a huge amount of money.”
Others said they were demanding compensation for the inconvenience and missed income from the inability to reinvest dividends.
“I am demanding compensation for at least 50 per cent of the value of my dividends to be compensated and think there should at least be a penalty for this stress too,” said another affected reader.
Numerous FT readers affected by the spate of IT problems have called for regulators to intervene. One said he had already written to the Financial Ombudsman demanding compensation.
“I am claiming time for reconciling my accounts, lost profits through not being able to trade and time and inconvenience, not to mention refund of any fees [Barclays] have deducted,” he said.
Others have called for the Financial Conduct Authority to intervene following problems with the switchover.
“It’s a botched design and botched implementation and I would like the FCA to get involved now,” said one reader. “This isn’t just one or two affected people but thousands who’ve been inconvenienced.”
The FCA declined to comment.
I am at the end of my tether,” said Graham Dale, an affected customer whose problems include an account for a small self-administered scheme, a type of occupational pension scheme, being closed because it can no longer be supported by the new system.
“I’ve written letters of complaint to John McFarlane (Barclays’ chairman) and Alastair Thaw (director of Smart Investor) but to date haven’t received the courtesy of an acknowledgment, let alone a meaningful response. This is indicative of the breathtaking contempt they show their customers,” he said.
Why haven’t dividends been paid?
Barclays said that the payment glitch is only affecting stocks that went ex-dividend before the ill-fated overhaul of its Smart Investor platform in late August, but were due for payment afterwards. It said the issue has affected about 4 per cent of equities on its platform and said on average dividends on those stocks had been paid in three working days.
Which stocks are affected?
This week investors in 11 companies including BP, Segro and Glencore were still waiting for dividends that were due in September. At the time of writing, eight dividends are still overdue and investors may not receive these for a further six days because of problems with the site’s overhaul.
BP’s dividend, due on September 22, was paid on October 6, and Segro investors are still waiting for a dividend due on September 29. Dividends due on stocks including HSBC, British American Tobacco and BHP Billiton were also paid late.
Additionally, some investors waiting for their delayed Royal Dutch Shell dividend due on September 18 were dismayed to find the payment docked by up to 15 per cent when it arrived last week.
One FT reader said: “I’ve been logging on every morning looking for my dividends and they aren’t there, it’s absolutely disgraceful. I’m missing about £1,000 in dividends from Lloyds and I was due £1,300 from Shell, which arrived nine days late. Barclays should hang their heads in shame.”
When will the delayed dividends be paid?
Barclays said the Shell dividend issue was a technical fault affecting a minority of customers that had been resolved, and that all affected investors were paid the correct amount this week.
However, other customers with outstanding payments may have longer to wait. “The last of the delayed payments will be made by October 12 after which our customers should not see any further delays,” Barclays said.
The bank said: “We have been paying dividends as quickly as possible on the affected stocks but recognise in some instances customers have waited longer than we would ideally like. Going forward, the process of paying dividends on Smart Investor will be quicker than the previous process on Barclays Stockbrokers.”
Is Barclays offering affected customers compensation?
Some customers say they have received compensation payments — but only after making a formal complaint to the bank.
One FT reader said: “Barclays offered me a £200 compensation payment which I accepted. It was paid into my account on September 29 and promptly taken away again on the same day.”
Barclays said it was investigating and would be dealing with each case on its merits.
Barclays said the issue was affecting “a small minority of customers” and the Financial Ombudsman Service (FOS) confirmed it had received complaints from customers relating to transfers between Barclays Stockbroker and Barclays Smart Investor Platform. Both declined to confirm the number of customers complaining or demanding compensation.
What other problems have investors been experiencing?
The dividend issues are the latest in a string of problems that have dogged the platform’s relaunch, including log-in issues, inconsistent stock pricing, missing transactions and delays in transfer out times.
Customers with large share portfolios will typically pay more under the new charging system, but have had problems leaving. Some had previously been quoted waiting times of up to three months to leave the platform, but the bank said these delays had now been resolved along with issues surrounding stock pricing and error messages.
Customers have also struggled with the fact that Smart Investor no longer supports certain types of accounts, nor does it offer third-party access online to spouses, family members and those holding power of attorney.
How are customers responding?
Numis, the stockbroker, expects rival stockbroking service Hargreaves Lansdown to have snapped up many customers deserting Barclays when it reveals its latest trading update later this month.
“We believe that HL will have been the largest beneficiary of the fallout from the system migration at Barclays,” said Numis.
Last month, rival investment platform IG said that more than half of its transfer requests were coming from Barclays Smart Investor customers.
I am an affected customer — how can I complain?
The FOS can demand that compensation be paid in cases where it judges consumers have been financially harmed. But the process will not be quick. Customers who want to make a complaint must first prove they have attempted to resolve the issue with Barclays, which has eight weeks to give its “final response” to any complaint.
If customers are unhappy with that response, they can take the query to the FOS, which will then consult with the customer and Barclays before coming to any conclusion.
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This article has been updated since publication to reflect ongoing changes to dividend payments.