Diversifying portfolio & gaining knowledge - advice for a beginner?
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Anecdotally then diy investors are far higher up the risk scale than those using advisers. There no doubt various reasons for that, from being straight gung Ho, to potentially better knowledge (not necessarily true) to different age profiles or expectations.
People with the desire to DIY and get away form the hand holding of an adviser are probably comfortable with more risk......are at least and better at assessing their own capacity for it.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
I can only speak for myself but the reason i went DIY is every man & his dog on the forum saying no need to go the IFA route, especially for such small amounts (i had 7.5k in an ISA at the time & i'd be contributing around £200pm).bostonerimus wrote: »People with the desire to DIY and get away form the hand holding of an adviser are probably comfortable with more risk......are at least and better at assessing their own capacity for it.
The IFA i got in touch with uses St James' Place but they have a £10k opener minimum which bought me time to come here & ask about it only to be told the charges are very high.
I'd basically be throwing away money.
That was the feedback that seemed to come about the IFA (who when checking their website afterwards the guy seems to no longer have the I in his IFA...). All the while i kept having the background hum of DIY, it's not hard, DIY it's not worth going IFA, DIY, DIY, DIY.
So i decided to read some more about it & whether my confidence was false or not i felt comfortable going with the VLS range at least myself. The only decision was which number.
Am i good at assessing my own capacity? Probably not, but i made a decision & every decision has outcomes. I'll find out what that is.0 -
bostonerimus wrote: »People with the desire to DIY and get away form the hand holding of an adviser are probably comfortable with more risk......are at least and better at assessing their own capacity for it.
There's no evidence for that though.0 -
JustAnotherSaver wrote: »I can only speak for myself but the reason i went DIY is every man & his dog on the forum saying no need to go the IFA route, especially for such small amounts (i had 7.5k in an ISA at the time & i'd be contributing around £200pm).
That is a bit like going to a car maintenance forum and not seeing many "go to a garage" comments though isn't it?
People not interested in the subject probably won't DIY, those that are will do the research (like you did) and a high proportion of those will feel confident enough to DIY.0 -
bostonerimus wrote: »People with the desire to DIY and get away form the hand holding of an adviser are probably comfortable with more risk......are at least and better at assessing their own capacity for it.
Does that apply to those who DIY, and as a result put all their money into a cash ISA or bank account because anything else is "too complicated and far too risky" ?0 -
Does that apply to those who DIY, and as a result put all their money into a cash ISA or bank account because anything else is "too complicated and far too risky" ?
I hope nobody is going to suggest an IFA if all you are doing is bank accounts and cash ISAs. By default most people will have a bank account or a savings account, but it's when they start thinking about pensions and stocks and shares ISAs that the DIY or IFA decision has to be made. With a little reading, and the ability to ignore a lot of the superfluous information and advice that is given, most people can apply the simple rules of low cost tracker investing and will probably do just fine. This is not rocket science......as someone who worked for NASA I know that for sure.“So we beat on, boats against the current, borne back ceaselessly into the past.”0 -
While I get your point I wouldn't have said the mechanics & car forum was the best way to express it.
I've been an active member on a number of car forums & when something has been beyond me the more helpful forums have always suggested to just get a mechanic to do it if I can't get hold of someone who can help out.
Bringing it back - I think if someone clearly doesn't know and isn't that interested then i'd like to think the members here would not give bad advice and would actually say seek advice.
I only had one of those - I didn't know but I was interested.0 -
bostonerimus wrote: »I hope nobody is going to suggest an IFA if all you are doing is bank accounts and cash ISAs. By default most people will have a bank account or a savings account, but it's when they start thinking about pensions and stocks and shares ISAs that the DIY or IFA decision has to be made. With a little reading, and the ability to ignore a lot of the superfluous information and advice that is given, most people can apply the simple rules of low cost tracker investing and will probably do just fine. This is not rocket science......as someone who worked for NASA I know that for sure.
No, what I am saying is in response to DIY investors understanding risk and their capacity for it. Cash = Safe, S&S = Risky.
We get quite a few I have 6 figures in my Cash ISA because I don't trust S&S but want a better return.
Whether it was conscious or not those people chose a DIY route, and despite what some on here say repeatedly, they are unlikely to go DIY into S&S.
The whole area is worse than rocket science as far as a large proportion of the population are concerned. With rocket science not understanding it makes no material difference to them, optimising their investments (whether cash, pension or S&S ISA) does.
You are comfortable going DIY, as am I and as are many on here, but it does not mean that everyone will be comfortable and should go DIY.
The "comfort blanket" can be worth paying for sometimes despite the cost.0 -
JustAnotherSaver wrote: »While I get your point I wouldn't have said the mechanics & car forum was the best way to express it.
I've been an active member on a number of car forums & when something has been beyond me the more helpful forums have always suggested to just get a mechanic to do it if I can't get hold of someone who can help out.
Bringing it back - I think if someone clearly doesn't know and isn't that interested then i'd like to think the members here would not give bad advice and would actually say seek advice.
I only had one of those - I didn't know but I was interested.
I couldn't think of a better analogy at the time, but as you say maybe not the best.
If you read some of the threads there is "bad advice" on occasions, or at least opinions that may be influenced by the respondents attitudes, experiences and financial situation as opposed to the OPs.
Fortunately there is normally follow up from other contributors pointing out the reason the "advice" might be wrong for the OP, or setting out the potential risk and exploring alternatives.0 -
No, what I am saying is in response to DIY investors understanding risk and their capacity for it. Cash = Safe, S&S = Risky.
We get quite a few I have 6 figures in my Cash ISA because I don't trust S&S but want a better return.
You've identified the big issue, which is lack of knowledge. With just a little education the vast majority of people could do what many financial advisers do. Unfortunately the UK has a long history of making investing more expensive and complicated than it needs to be which is probably why some people stick to cash......once people see behind the curtain they will realize that the "Great Oz" is mostly just a lot of smoke, noise and bluster. There will always be people that need or want professional help, but I think most people are perfectly capable of managing pensions and S&S ISAs if they can find the confidence to do it and access to some basic knowledge
Of course the other reason people stick to cash is that they don't have a lot of money and can't afford to take the risk. The reduction in job benefits, stagnating wages and high cost of basic necessities like accommodation can make cash look attractive.“So we beat on, boats against the current, borne back ceaselessly into the past.”0
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