29th July 2010
So the age of the DIY investor is well and truly upon us, that's if new research from one financial services provider is anything to go by.
Fair Investment Company carried out its own research recently and found that as many as 78% of investors carry out their own research, and make their own investment decisions, eschewing the services of a financial adviser.
And it's a growing trend – and a fast-growing one at that. Back at the start of the year when investors were asked the same question, 36% said they took advice before making an investment decision, this has now fallen to just 22%. That's a 14% increase in just six months.
As George Ladds, head of investment and pension research at Fair Investment Company, says: "10 years ago, it was very unusual for people to make their own decisions about investments – there simply wasn't enough information out there for them to do so.
"But since the internet has become more and more popular, it has become the place to go for research on virtually any subject, and as a result, people are increasingly cutting out the middle man."
So what does this mean for independent financial advisers? According to Mark Dampier, head of research at Hargreaves Lansdown, IFAs needs to adapt to survive.
"We are not a typical IFA, so many people do do their own thing with us. We have our platform, Vantage and everything goes into that – SIPPS ISAs, you name it.
"We also have the advice side, so people can choose the route they take with us. You can talk to the IFA, do your own thing or take a combination of the two. The most important thing is that [as an investor] you get your investments in a position where you, or anyone else, can manage them."
There are further changes afoot too with the Retail Distribution Review due to come into force in 2010.
"When it comes into force in 2012, the Retail Distribution Review will mean fundamental changes to the IFA and life insurance industries, it will have far-reaching impacts on banks and asset managers and will also fundamentally change the way consumers buy personal finance products."