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DIY investing: Take control of your own money

When it comes to decorating and gardening projects, we like to have a go ourselves, especially in and around the bank holiday season! What about DIY investing though? There are some people out there who manage their own money instead of pay to use a financial planner. This might be to save money or some people like to "dabble" in investing because they enjoy it. At what point should we step back and consider getting expert help?

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How do you plan to manage money?

When it comes to managing your money everyone does it differently. Some people like to manage their own finances, others seek advice and some like to dabble in investing themselves. Some use “robo advisers“,  then there is a new wave of hybrid DIY-ER who utilises online tools and a suite of different advice services. The internet is busy turning us into overnight experts of all things. So it is only natural to want to try to do something off your own accord. We obviously believe in the benefits of financial planning, but we also are under no illusion that people don’t always understand the true value of financial advice and that is only the fault of firms who don’t clearly explain it. If you decide not to seek financial advice we at least want to send you away with a few little things to think about so you can get the best out of “going it alone”

1. Financial learning

We don’t all wake up in the morning and know how to fix a leaking pipe or the methods for managing our finances. When you DIY you have to learn as you go, sometimes with limited sources of information. If you are considering not seeking advice and you are keen to learn that is good news, just make sure the resources you read are credible. Remember finance shouldn’t be a “one-size fits all approach” so you will need to take your learning and apply it to your own scenario. It is crucial you are objective and hold yourself accountable to your decisions, sometimes taking the emotion out of decisions that really effect you and your family and/or business. Some people, however, just don’t have the time to educate themselves, other’s don’t want to and would prefer to spend their free time with their children or on their hobbies. After all it takes our people 3 years to train to become fully qualified Chartered Financial Planners. If you seek financial advice make sure you find someone who educates you through the process. You should never be told what to do with your money. The process should give you the options and you should be able to make your own decisions. Good financial advice empowers you to make your own decisions giving you control of your destiny. So I guess with the support of an experienced qualified financial planner you kind of can then “do it yourself”!

2. Accept that you might just not have the tools

If you have a small pot of money to invest and loosing that money wont significantly impact on your situation one might be willing to risk investing it in something you like the sound of or have read about. Not many people would be willing to take that risk though. Using a financial adviser can give you access to techniques and tools that you don’t have. There is an enormous amount of data and processes not available in the public domain that you can benefit from which someone investing on their own wont have access to.

3. Guidance or regulated advice?

What is financial advice and what constitutes as guidance? The internet is a wonderful tool, but it’s not regulated. The advice you receive online isn’t checked or verified which is not a problem if you just need a bit of guidance. Just check the guidance is accurate or from qualified people. You have to ask yourself whether you want a better teacher than the internet. Any financial advice you receive from a qualified professional is regulated. This means you are protected if things go wrong which helps you to avoid making expensive mistakes.

4. Realistic cost savings

If you don’t have the expertise to invest wisely, any cost saving you make from investing your money yourself might instantly be null and void. If this worries you and you are considering seeking financial advice, find a firm that is clear about their fees, transparent and fair. For example, at Unividual we go above and beyond the bench mark and offer every client a free, non obligatory, first meeting where we show you exactly what our fees are upfront. More importantly, we explain what they equate to and how they are paid. Other firms might give you information over the phone too, there is nothing wrong with that. Sometimes though, it can be quite good to look someone in the eye and find out whether you can build up enough rapport with someone to trust them.

Could and would you go it alone?

One of the really important things to consider when deciding whether to manage your own money is whether you are happy to do it all on your own. Not only is it a big only lonely task, with a lot of high risk if it doesn’t go right, you will have no one there you can trust to challenge your decisions. There will be no one you can constantly ask questions to. Sometimes you don’t even know the questions you should be asking in the first place.  This all impacts on decision making.  What a lot of people don’t realise is that when you work with a financial planner you also get a whole team of experts under your wing, with cross-sector expertise and specialisms. They all work around the clock proactively looking after your estate so that you can reach your lifetime goals. Let’s face it, most D.I.Y projects are time consuming and full of stress and worry. The difference here is that its not like doing home improvements. You will have to deal with the anxiety some people get from watching an unpredictable stock market. The outbreak of Coronavirus has left a lot of people feeling vulnerable, without an absolute professional there to keep you calm and reassure you times can feel troublesome. You’ll also need time to expand and keep up-to-date with knowledge and when you don’t get something right you can’t hold anyone to account.

The typical unadvised investor takes a huge amount of risk and gets very little back for it. You can’t train to be a professional in anything overnight. So, when it comes to the important decisions in life, the ones that will shape and define your future, you need to decide whether you should bring in professional help just like when we need support from a solicitor, doctor or builder. A financial planner should be like the best of teachers, patient, open to questions and challenges, and capable of explaining things in different ways, depending on what each client needs. It’s part of what we teach in Unicademy, our in-house Chartered financial planner school. We don’t just relate to you as clients, we aim to inspire you as individuals.

Author: Cherie-Anne Baxter

Editor: Cherie-Anne Baxter

Date: 09/04/2020

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