Any potential investor has a big decision to make. Do they pay an adviser to invest and manage their money for them, or do they try and do it all themselves?
Similar to many decisions made in life, this one generally comes down to a few key points.
What do I want? What do I need? And how can I get this for the lowest cost?
The overwhelming benefits of DIY investing are that it’s quick and easy to set up and comparatively low cost. Both are true; it is relatively simple to set up a DIY investing account and it’s generally going to be cheaper than taking financial advice.
An online and ready to use account can typically be set up in less than half an hour. Once your money clears, you’re generally good to go.
But, beyond an online account and access to a platform to invest your money, you don’t get much more. What you do with your money, well, that’s for you to decide. So, essentially, you need to know about investing and how to set up an appropriate portfolio. You need to have the time to manage your investments too. As well as the inclination to want to.
With DIY investing, you are paying less because you are getting less of a service. That’s the trade-off you make. And it will be the right trade-off for a number of investors.
Receiving traditional advice isn’t initially so quick or straight forward. It’s a more involved and specific process. An adviser may come to your house or you may visit their office, but either way, it doesn’t have the initial speed or ease associated with do-it-yourself investing. There’s more to it.
With financial advice, the investing is done for you. A portfolio can be set up in a diverse and risk appropriate manner and then maintained for you going forward. A great deal of time can be saved having this done for you. You also have the security of knowing that it’s being done in a manner that matches your financial circumstances. While you may be able to do this yourself, there is a certain level of knowledge that is required. And there’s no one checking for you either.
Of course, in exchange for this level of service, you pay more than you might if you were doing it yourself, as with anything in life. The problem is this can often be a lot more. A further problem is that many advisers will only take on clients with assets over a certain level.
This can mean a lot of investors don’t actually get to make the choice between the two. It’s DIY or nothing.
I think the bottom line is there are attributes from both routes that investors want. The low-cost and efficiency of DIY investing coupled with the investment expertise, free time and security associated with receiving regulated financial advice.
Simple, accessible, affordable.
So, why can’t I have the best of both? Well, actually, you can.
While already a big force in the US, online investment advice is still relatively new in the UK. And in that sense Wealth Horizon provides a unique service. At the forefront of it, we’re making financial advice accessible to all – and providing it in a straightforward and efficient manner.
With a fully online, technology driven proposition, regulated financial advice can now be provided to investors at a cost much closer to that of a DIY investment platform.
Receiving financial advice online rather than in a face to face manner in no way reduces the redress available or the liability of the advice provider. Rather, it’s just provided in a manner more efficient and accessible than what was previously available.
A diverse and risk appropriate portfolio can be created through our website’s investment process in a very short space of time. Closer to the sort of time you would associate with setting up a DIY investment account. And you can rest assured that the speed and convenience at which this can be done is a mark of enhanced efficiency rather than any reduction is the standard or care of the advice given.
Why not see for yourself.
Don’t turn investing into gambling
There are some people that DIY investing will be ideal for. Someone that has the time to manage their investments, has a good understanding of the investment world as well as their own requirements, and also has the inclination to take on the responsibility of managing their savings.
But, there are a lot of people who don’t fit this investor type yet still take on the task of investing themselves. If you are one of these people, you may well be investing with much more risk than you should. In fact, even if you do fit the model for a DIY investor, you still might be taking on more risk than you realise.
This is why seeking advice is so important.
Creating a risk appropriate and diverse portfolio, and then maintaining it going forward, is such a crucial principle for successful investing but one that can be easily overlooked. By choosing to take online investment advice you choose to have all of this done for you, without compromising on cost or convenience.
Other content you might find interesting:
- Is it time to take your investment portfolio out of hibernation?
- Tax free savings: why investing in an ISA is a no-brainer
- Why stock market predictions don’t matter
Any news and/or views expressed within this article are intended as general information only and should not be viewed as a form of personal recommendation. This article is not directed to, or intended for distribution or use in, any jurisdiction where such distribution would be prohibited. To the extent permitted by law, Wealth Horizon accepts no duty of care or liability for loss occasioned to any person acting or refraining from acting as a result of any material contained within this article. Where past performance is shown, this should not be taken as a guide to future returns. Investment in the stock market is not a suitable place for short term money. The value of investments and associated income may go down as well as up and you may not get back the full amount invested.
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