Investing has never been easier.
The days of pen-and-paper-rotary-phone stockbroking have been quietly replaced during the rise of online investment platforms. Now, you can pick and choose your investments from the comfort of your sofa with a few taps on your phone screen.
With accessibility at an all-time high, FTAdviser reports that there are now 14.1 million personal investment accounts in the UK.
However, before you opt for the DIY investing route, it’s important to know the risks and rewards, as well as the unique benefits of tailored financial advice.
You have complete control over your portfolio, but active investing can be time-consuming
Often, the attraction of DIY investing is having complete control over your portfolio.
As a DIY investor, you are in charge of:
- Your investing timeframe
- The assets you invest in
- When you decide to pull out of the markets.
This means that your rewards are completely yours, as might be your losses.
If you are an “active” investor, you might rely on timing the market to make a profit on your investments. This is a high-risk, high-reward strategy where you purchase stock when you think it’s about to rise in price and sell it just before you predict it falls.
It’s not impossible to accurately predict a stock market movement, but decisions are mostly based on probabilistic guessing and gut instinct. Many active investors are also aided by advanced computer software, which the average DIY investor won’t typically have access to or know how to use.
Active investing also requires close monitoring of the markets. So, if you are already working full-time, this might be difficult to perform alongside your day-to-day responsibilities.
Consequently, while DIY investing gives you freedom over your investments, you may be more likely to experience significant losses if you attempt to leverage that control without the time and knowledge to do so.
Fees are usually lower, but you have to build your own portfolio from scratch
DIY investing is a budget-friendly option for those cautious about spending too much on professional guidance.
Financial planning firms will charge a fixed fee, an hourly rate, or a percentage of the assets under management for their services.
Alternatively, an investment platform will charge DIY investors a fixed fee or a percentage of assets held but at a significantly reduced rate.
For instance, the JPMorgan Personal Investing platform charges a management fee of 0.45% – 0.75% a year. Other less established platforms, like Trading 212, have no operating fees whatsoever (both correct as of July 2026).
While fees are lower on DIY platforms, a financial planner provides you with a bespoke portfolio tailored to your risk tolerance and unique goals. This means we relieve you of the organisational and operational burdens of investing.
More importantly, our collective experience allows us to build a well-diversified portfolio that balances risk and could achieve significant growth over time.
In comparison, DIY investors may find it difficult to properly diversify their investments, leading to regular losses or sub-par growth. As such, although you pay higher fees for professional advice, you may be more likely to see growth that makes the additional expense worthwhile.
You might miss out on valuable tax efficiency opportunities
Building and managing your own portfolio from scratch usually requires a significant amount of time and effort, particularly if you are a complete beginner.
This means it’s easy for other vital processes, like tax planning, to slip through the cracks. Tax efficiency ensures that more of your investment returns end up in your pocket.
Careful planning is especially important when investing, as any profits you make from a General Investment Account (GIA) might be liable for Capital Gains Tax (CGT) or Dividend Tax. If you did not know this, you could overlook important ways to reduce your tax bill.
We embrace tax efficiency as part and parcel of investing and can help you implement mitigation strategies.
This might involve moving your investments to a tax wrapper, like a Stocks and Shares ISA. This is free from Income Tax, CGT, and Dividend Tax up to the annual subscription limit of £20,000.
Otherwise, we might suggest maximising your pension contributions up to the Annual Allowance so that you can build tax-free wealth for later life.
Without professional guidance, you could be more vulnerable to market shocks
When you manage your own portfolio, your decisions combined with market shifts impact how much you gain or lose.
This added pressure can sometimes place unnecessary weight on your shoulders, and you may be more susceptible to “rage-bait headlines”.
Read more: How “rage-bait” headlines could affect your investment decisions
When you respond emotionally to investment performance, it can impact your progress. For example, selling your stocks in response to a market dip might solidify your losses. Conversely, if you’d remained calm and held those investments until the market rebounded, you may have seen continued growth.
Fortunately, when you work with a financial planner, we can reassure you and help you avoid these reactionary decisions. If any action is necessary, we’ll take you through your choices and help you plan.
We’ll also implement practical steps to reduce your investment risk, so your portfolio is more robust in times of economic turmoil.
This might include building a portfolio of diversified asset classes across various markets in different geographical locations. This can spread your investment risk, so that if your investments in one market fall, others might rise, keeping your overall investments stable.
Get in touch
Learn more about our tailored investment advice by contacting a member of our team today.
Please get in touch or email us at advice@mlifa.co.uk for more information.
Please note
This article is for general information only and does not constitute advice. The information is aimed at individuals only.
All information is correct at the time of writing and is subject to change in the future.
Please do not act based on anything you might read in this article. All contents are based on our understanding of HMRC legislation, which is subject to change.
A pension is a long-term investment not normally accessible until 55 (57 from April 2028). The fund value may fluctuate and can go down, which would have an impact on the level of pension benefits available.
The tax implications of pension withdrawals will be based on your individual circumstances. Thresholds, percentage rates, and tax legislation may change in subsequent Finance Acts.
The value of your investments (and any income from them) can go down as well as up and you may not get back the full amount you invested. Past performance is not a reliable indicator of future performance.
Investments should be considered over the longer term and should fit in with your overall attitude to risk and financial circumstances.