FINANCE
Advice – guidance from Karl Pemberton , managing director of Stockton-based Active Chartered Financial Planners .
DIY investing or professional financial advice ?
With Active Chartered Financial Planners ’ managing director Karl Pemberton …
PICTURE : CHRIS BOOTH
With “ get rich quick ” adverts flooding our social media and investment apps at our fingertips , the temptation to try our hand at DIY investment has never been greater .
There ’ s been a steady rise in DIY investors ( also known as retail or individual investors ) in recent years and although it seems exciting , there ’ s no question that it comes with its own set of risks .
If you took the plunge and decided to dabble in stocks or bitcoin , would you pay for advice or go it solo ?
The FCA ( Financial Conduct Authority ) recently published research showing that a more diverse audience is choosing to DIY invest . This new group includes females , under-40s and from a BAME ( Black , Asian and Minority Ethnic ) background .
This newer – and more millennial – audience , is more reliant on social media for tips on investing and the FCA research warns young investors who are getting involved with high-risk investments to be careful .
There is evidence that higher-risk products may not always be suitable for these consumers ’ needs . DIY investors might sell at the wrong time or invest in a portfolio unsuitable for them .
The study found that 59 per cent claim that a significant investment loss would have a fundamental impact on their current or future lifestyle and 63 per cent say they cannot afford to lose the money they are investing . Yet , it doesn ’ t stop them from taking the risk .
During a recent edition of the Active Spirit Live video series , professional footballer and young investor Bailey Peacock-Farrell said : “ I don ’ t invest on a whim , but people want an instant win – it ’ s like a slight form of gambling . Having the right people around me to trust – that was the biggest thing for me .”
Fraser Wilkinson , executive director at Quilter Cheviot Investment Management , agrees with Bailey , saying : “ Be careful of the gamblers ’ high – be steady , diversify .”
He adds : “ But make sure you take proper advice .”
But what is the true value of professional financial advice ? Research by the International Longevity Centre-UK ( supported by Royal London Insurance ) said that those who take financial advice ( independent or restricted ) are on average £ 40,000 better off than those who do not . This included liquid assets and pension wealth .
However , professional financial advice delivers much more than just financial benefits . Research by Royal London Insurance in 2020 says those who take advice feel more confident and financially resilient . The research also found that 41 per cent of those who did not receive financial advice felt anxious about household finances , compared to 32 per cent of people who did seek advice .
“ We focus on building long-term relationships with our clients ,” comments Karl Pemberton , MD of Active Chartered Financial Planners .
“ Our advisers are not only extremely highly qualified but also regulated . They have years of experience in the industry but also and most importantly they know the risks .”
“ Our rigorous review system ensures that we communicate and meet with our clients on a regular basis , allowing us to adjust any client plans in a timely manner as circumstances or financial objectives change .”
Although the promise to “ get rich quick ” may seem appealing , it ’ s important to remember that if something looks too good to be true , it probably is ! activefinancialplanners . co . uk # TheClearAdvantage
The information provided must not be considered as financial advice . We always recommend that you seek financial advice before making any financial decisions The value of investments and income from them can fluctuate ( this may partially be the result of exchange rate fluctuations ) and investors may get back less than the amount invested . Past performance is not a guide to future performance .
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