Article by Phil
An increasing number of people in the UK are choosing Do It Yourself (DIY) investment advice solutions.
Whether that’s by choice or because there are an increasingly small number of independent financial advisors accessible to provide investment advice is uncertain. But the latest figures from Boring Money (FT Adviser 13/6/24) estimate that there are 9.2 million DIY investors in the UK alongside 3.2 million cash savers. That’s 12 million people saving and investing without the benefit of professional guidance.
In terms of value together this covers £700 billion of assets.
- 21% of people with investments have taken some form of investment advice in the past.
- Overall, just under 10% of the population have taken advice.
- Despite this almost 45% of people with investments said that they would pay for advice
- 91% of people receiving advice were satisfied with their adviser.
- But 9% weren’t. Most of whom weren’t happy with the performance of their investments. That’s despite long standing warnings that the value of investments can go down as well as up.
- Around 20% of people have switched financial advisers in the past.
- 75% of people looking to retire wanted to be able to secure their future income in some way.
- 70% of retirees wanted to be able to pass on their wealth to their family, including their pension savings.
Of course, DIY investors are more prone to influences outside regulated advice. Social media being a big player. Research from Almond Financial discovered that nearly 90% of all advertising on Tik Tok could well be “misleading” under the Financial Conduct Authority (FCA) rules. It seems that one of the problems is that so called “fin influencers” do not advise people to do more research. They tend in the main to suggest that their offer is the only investment advice that they need. This applies across the spectrum including crypto, memberships, online advice guides, retirement tips etc. Of 150 Tik Tok sites reviewed they found that they had over 28 million followers, so the market and influence is absolutely huge and potentially damaging.
The FCA alongside the Advertising Standards Agency (ASA) are cracking down but not quickly enough. They have the support of the new Online Safety Bill which requires Social Media providers to ensure that their advertisers are authorised and to take down unauthorised content. But this is taking time to implement. Perhaps this is just Tik Tok. Our experience is that Facebook were proactive in this regard, requiring us to prove to them that we were authorised before placing and advertising for financial services advice and products.
Perhaps the introduction of cheaper and more accessible digital advice will provide more people with better and professional investment advice. Over 50% of the so-called Generation X (born after 1965 will be 60 next year) say that they would be happy to receive their advice online. That’s according to Natixis. 90% also said that they trusted their adviser to give them good financial advice. Although 90% also said they trusted themselves to handle their finances, hence the number of DIY investors.
