More and more people are taking their investment decisions into their own hands, rather than going through a financial adviser.
According to the Interim Report from The Platforum, the way people invest is changing. They found that, of the 13.7 million UK consumers with some sort of risk-based investment, only 15% use an adviser exclusively. More than half prefer to take occasional advice and self serve the rest of the time, with 4.3 million taking the full DIY approach - that’s up from 3.4 million six months ago.
The introduction of new rules on the way that a financial advisers are able to charge for advice, as part of the Retail Distribution Review (RDR), may be one cause behind changes in consumer behaviour. The new rules mean that individuals need to pay upfront for advice on investment products and that advisers can no longer take commission for the sale of such products. Research from Deloitte released towards the end of 2012 suggested that 5.5 million fall into a “financial advice gap” as a result of these changes- that is unable or unwilling to pay for advice upfront.
DIY investors do their own research, and choose funds to invest in themselves. The Platforum found that, when looking at where investors look for information and inspiration, online resources such as websites, blogs and forums came top. Included in this group are new websites that, as well as featuring investment products for the consumer to choose from, allow users to track the growth of their investments over time.
With the number of consumers choosing to invest directly on the rise - 50% in April 2013, up from 44% the previous year - sites that offer rich and useful information to investors, as well as tools to anayse and track their investments could be set to become more and more influential in the personal finance market.