There are currently 23m people in the UK looking after their own investments rather than using a professional adviser, according to new research from online adviser Wealth Horizon, although the findings suggest that more than 2m think their portfolios would perform better with advice.
Comparing a survey conducted in August among 1,005 people by Atomik Research, with a 2012 Axa Wealth study, the firm stated that the 23m figure is 188 per cent more than the 8m first forecast to do it themselves prior to the launch of the Retail Distribution Review.
Adviser champion Garry Heath recently warned that more than 20m people will end up without access to professional financial advice because of the RDR reforms.
Wealth Horizon’s research identified that nearly half of these so-called ‘DIY’ investors are choosing to manage their investments themselves because financial advice is too expensive.
However, the research also found that 10 per cent of those surveyed - so around 2.3m of the extrapolated 23m - felt their portfolios were performing worse than if they were with an adviser.
The firm also found that men are far more likely to eschew professional advice than women, with 67 per cent of men ‘DIY investing’, compared to 57 per cent of women.
Aside from the cost, other reasons why investors choose to start DIY investing include not wanting to trust a stranger with their money (20 per cent) and not feeling comfortable with talking to people about their finances (13 per cent).
Chris Williams, chief executive of Wealth Horizon, said: “It was expected that with the introduction of the Retail Distribution Review, about 8m people would be driven into becoming DIY investors as the price of advice increased. At the time, this news met with deep concern, and yet the situation is now far worse than originally predicted.
“Price remains a barrier for many people looking for investment advice and, as a result, we are seeing a huge number of investors engaging in the process on their own. These DIY investors are at risk of losing money because they are not experienced enough in managing their portfolios.
“Essentially, they are negating the saving that they actually make by not using an adviser.”