BARCLAYS is withdrawing financial advice for customers with small investments which could affect thousands of people from the North-East.

A letter from Barclays, seen by the Echo, reveals that it is closing the accounts of ‘small’ investors, those with less than £100,000, and asking them to either manage the money themselves or transfer into a different scheme by May 16th.

But a North Yorkshire financial advice firm is warning this could leave people in control of complex portfolios they are not trained to manage.

Philip Morris, managing director of Easby Gale & Phillipson, said: "All those consumers affected need to quickly seek advice and guidance to enable them to make a decision on how to deal with their financial and investment planning needs in the future. “There are a number of options available to all types of clients, but those people specifically affected by the Barclays Discretionary Investment Management ‘service withdrawal’ may have capital gains tax and ISA tax relief implications at risk, and they need to act quickly.”

Those affected are most likely to have had their investments transferred to Barclays after it acquired smaller businesses, most notably Gerrard in 2003, which had 116,000 customers at the time. It is not known how many remain with the bank.

Rachel Dalby, marketing manager with Easby Gale & Phillipson, added: “From our own client base, and speaking as a small North Yorkshire firm, our average investment is £88,000.

“For a big bank like Barclays with millions of customers the number affected might seem small, but you are talking about a very substantial number of people being affected.”

She also warned that people who have received a letter could already be losing out as their money is now in limbo, and is unlikely to be managed effectively.

Barclays, among other high-street banks, is withdrawing its discretionary fund management service to all new customers with less than £250,000 to invest after the retail distribution review meant they were unable to profit from it.

It insists that existing customers with between £100,000 and £250,000 will see no change in their service, though admits the letter regarding those with less than £100,000 is genuine.

A spokesman said: “In the new regulatory environment, it is no longer viable, or practical for clients, to offer a direct discretionary service to the small number of clients we have with less than £100k in their portfolios. “We are writing to them to them to give them the option of moving their portfolios to Barclays Stockbrokers, at no cost.”