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Difficulties in the financial markets are hastening the demise of the “do-it-yourself investor” as consumers turn to professional advice in ever-growing numbers, say financial advisers and fund managers.

In spite of the growing number of better-informed investors armed with new technology and easier access to financial data, flows from the channel have proven to be negative over a longer time period.

Robin Stoakley, managing director of UK retail at Schroders, says the rise of the DIY investor seems to have fallen away in recent months as cash flows through advisers continue to dominate.

“We certainly haven’t detected any signs of increased DIY investors,” he adds. “The ratio of inflows from direct investors and advisers increasingly favours the adviser channel.

“There is more information for DIY investors, but with market conditions being as turbulent as they are, the wrong decision doesn’t mean making less money, it means losing money.”

Figures from the IMA, Mr Stoakley says, have shown direct investors to be net withdrawers of capital from the asset management industry.

In February, the trade body reported that net outflows from direct investors had reached £172m across all IMA fund sectors, while intermediaries generated net retail sales of roughly £1.3bn. Tied-sales advisers also reported £66m of inflows, while private clients saw outflows of £14m.

Gavin Haynes, investment director at Bristol-based IFA Whitechurch Securities, says he is experiencing the trend first-hand as more investors seek advice during the present climate. “The trends we have seen are quite the reverse,” he explains. “It’s a very different environment for private investors.

“Unsurprisingly, there has not been a huge raft of new money coming in, but we are seeing investors who in previous climates were happy to buy funds off the shelves are now happy to have their portfolio put together professionally.”

Mr Haynes says the turmoil in financial markets has made even well-informed investors realise the benefits of advice. “The investment climate we have seen over the past two years has acted as a wake-up call for people to realise it is crucial to be more active and have a more diversified portfolio.”

He says consumers will also need to look for alternatives to more traditional safe havens, such as cash, as interest rates remain low for the foreseeable future.

“There’s a greater realisation that they have to take a risk versus reward view,” he says. “Interest rates are so low that people are going to have to prepare to take on some risk to achieve attractive returns.”

Yet a March survey by Barclays Financial Planning found that 77 per cent of its 2,214 respondents had not taken any advice in 2009 and did not plan on taking advice throughout the rest of the year.

However, those shunning advice are in the minority, says Mike Parsons, head of UK retail sales at JPMorgan Asset Management, as advisers seem well-placed in the constantly shifting investment landscape.

Mr Parsons says: “Investor needs are so different now. Rather than go it alone, there seems to be an increase in demand for advice.”

He says investors should use the information they have available to them to make informed decisions with a professional adviser who can manage the portfolio on a more regular basis.

“I would argue that investors need IFAs to sift through the funds available in the market and build appropriate portfolios for clients,” he adds.

Peter Hicks, head of UK retail sales at Fidelity, says the issue of trust in the sector has become key since stock market volatility and wider economic problems began.

"Clients of financial advisers generally have a more positive view of the people they have dealt with," he explains.

The proliferation of information for private investors may have created more informed investors, he says, but the value of advice should not be snubbed. Mr Hicks says advisers can offer a range of other services to investors such as tax advice, an area that is harder for many DIY investors to penetrate.

Mr Hicks believes proposals from the FSA's Retail Distribution Review, including stricter delineation between sales advice and fee-based advice, could also have an impact on consumer trust in financial advice.

He says: "If I were a consumer, I would be interested in knowing whether I was going to get sales advice or an advice service.

"It's like buying a car. If I go to a car dealer, I don't know what make of car I'm going to come back with. If I go to a BMW showroom, I expect to get a BMW."