DIY investing vs using a financial adviser: what’s best for me?

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Today’s investors have more choice than ever. Online platforms, low-cost funds and easy market access have made it possible to manage investments independently. At the same time, financial planning has become more complex, with pensions, ISAs, tax rules, and long-term care considerations all playing a role.

In this guide, we’ll explore the key differences between DIY investing and working with a financial adviser. We’ll look at the pros and cons of each approach, compare costs, explain who each option may suit best and outline how to decide what’s right for you - including whether a hybrid approach could offer the best of both worlds.

What is DIY investing?

DIY investing means you make all investment decisions yourself. You choose where to invest, how much to contribute and when to make changes, using online platforms and tools rather than professional advice.

Why DIY investing has grown

DIY investing has become increasingly popular over the past decade. Several factors have driven this growth:

• Greater access to markets: Online investment platforms have lowered barriers to entry.

• Lower costs: Many platforms offer low or zero trading fees and access to inexpensive funds.

• More information: Investors can easily research markets, funds, and strategies online.

• Desire for control: Some people prefer to manage their money independently.

Typical tools used in DIY investing

DIY investors often rely on:

• Online brokers and investment platforms.

• Passive index funds and exchange-traded funds (ETFs).

• Robo-advisers, which automate portfolio construction and rebalancing.

• Investment apps and tracking tools.

While these tools can make investing easier, responsibility for decisions, and mistakes, remains firmly with the investor.

What is a financial adviser (and what do they do)?

A financial adviser provides personalised advice based on your individual circumstances, goals and attitude to risk. Rather than focusing solely on investments, advisers take a holistic view of your finances.

Types of financial advisers

Financial advisers can operate under different models, including:

• Certified or chartered advisers with recognised professional qualifications.

• Wealth managers offering broader financial planning services.

• Fee-only advisers, paid directly by clients.

• Commission-based advisers, paid through product arrangements.

Understanding how an adviser is paid is an important part of choosing the right one.

Services that financial advisers offer

A financial adviser can help with:

• Investment strategy and portfolio management.

• Pension planning and retirement income.

• ISA planning and tax efficiency.

• Estate and inheritance planning.

• Managing risk and protecting wealth.

For many people, the real value of advice lies in joining these areas together into a long-term plan.

What are the pros and cons of DIY investing?

DIY investing can be appealing, particularly for those who value independence and cost efficiency. However, it also places full responsibility for outcomes on the investor, making it important to weigh the benefits against the potential drawbacks.

Advantages of DIY investing

For confident investors, managing your own investments can offer flexibility and a strong sense of ownership over financial decisions.

• Lower fees – Without ongoing adviser fees, DIY investing can reduce costs and help preserve more of your returns over the long term, especially when using low-cost funds and platforms.

• Greater control – You retain full control over investment choices, timing, and strategy, allowing you to tailor decisions to your personal preferences and risk tolerance.

• Learning and empowerment – Taking a hands-on approach can improve financial knowledge and understanding, helping you feel more engaged and informed about how your money is working for you.

Disadvantages of DIY investing

While DIY investing can be rewarding, it also requires commitment, discipline, and a willingness to manage uncertainty.

• Time and effort – Researching investments, monitoring performance, and rebalancing portfolios can be time-consuming, particularly as markets and personal circumstances change.

• Knowledge gaps – Tax rules, pension allowances and complex investment options can be difficult to navigate without professional support, increasing the risk of costly mistakes.

• Emotional decision-making – Market volatility can lead to impulsive decisions, like selling during downturns or chasing short-term gains, which may harm long-term outcomes.

What are the pros and cons of working with a financial adviser?

Working with a financial adviser can bring reassurance and structure to your financial planning, particularly when decisions feel complex. However, it’s important to understand both the benefits and the trade-offs involved.

Advantages of working with a financial adviser

Professional advice can add value beyond investment selection, especially when planning for the long term.

• Expert guidance – Advisers bring experience and technical knowledge that can help avoid common pitfalls and build a strategy aligned with your goals.

• Comprehensive financial planning – A financial adviser considers investments alongside pensions, ISAs, tax planning, and future income needs, helping create a more joined-up plan.

• Behavioural support – Advisers can provide perspective during periods of market volatility, helping you stay disciplined and focused on long-term objectives.

Disadvantages of working with a financial adviser

Despite the benefits, professional advice isn’t for everyone and comes with certain considerations.

• Higher costs – Adviser fees can reduce net returns over time, particularly for smaller portfolios or simpler financial situations.

• Less direct control – You’re delegating investment decisions, which may feel uncomfortable for those who prefer to remain closely involved.

• Potential conflicts of interest – Depending on how an adviser is paid, there may be incentives to recommend certain products, making transparency and trust essential.

Why your capacity for risk is important

Your capacity for risk is important because it looks at how much financial risk you can realistically afford to take, based on things like your income, savings, time horizon and future plans. It helps you understand how much potential loss you could cope with without it affecting your ability to meet important goals.

This matters because investments can fall in value as well as rise. Choosing investments that exceed your capacity for risk could force you to change plans or sell at the wrong time, while taking too little risk may limit your long-term growth. Getting this balance right helps keep your investment decisions practical and sustainable.

Cost comparison: DIY investing vs a financial adviser

Cost is often a key factor when choosing between DIY investing and professional advice. However, it’s important to consider both direct fees and long-term value.

How fees typically work

DIY investing usually involves:

• Platform or account fees.

• Fund charges.

• Occasional trading fees.

Financial advisers may charge:

• A percentage of assets under management.

• Flat annual or project-based fees.

• Ongoing advice fees.

The long-term impact of fees

Even small differences in fees can significantly affect returns over time due to compounding. However, lower fees don’t guarantee better outcomes if poor decisions or missed opportunities offset the savings.

How to decide what’s right for you

There’s no one-size-fits-all answer. The right choice depends on your circumstances, preferences and long-term goals.

A practical checklist

Consider:

• How much time can you realistically devote to investing?

• The complexity of your finances.

• Your comfort with risk and uncertainty.

• Whether you value control or reassurance more.

You should also consider asking yourself:

• What am I investing for, and when will I need the money?

• Am I willing to keep learning as rules and markets change?

• Would professional guidance help me feel more confident?

A simple comparison:

Many people find their needs change over time, and that a blend of approaches can work well.

Need guidance with pensions or ISAs? LV= can help

Deciding how to balance pensions and ISAs can feel complex, particularly as your circumstances change over time. Professional guidance from our team of financial advisers can help you understand your options and build a strategy that aligns with your goals.

LV= offers support and expertise to help you navigate pension and ISA choices, ensuring your savings work as hard as possible for your future.

Want to learn more? Get in touch with us today.

DIY investing vs financial adviser FAQs

We’ve compiled a selection of the most frequently asked questions about DIY investing vs financial adviser to help you make an informed decision. 

Is DIY investing better than using a financial adviser?

DIY investing can be better for experienced investors with simple financial needs who want to minimise fees. However, a financial adviser may be more suitable for those with complex goals, limited time or a need for professional guidance and behavioural support.

Can you outperform a financial adviser by investing yourself?

Some DIY investors can outperform advisers by avoiding management fees, but many underperform due to emotional decision-making, lack of diversification or poor timing. Advisers often add value through discipline, risk management, and long-term planning rather than stock selection alone.

What are the risks of DIY investing?

The main risks of DIY investing include emotional investing, lack of diversification, insufficient risk management and missing tax or planning opportunities. These risks can increase during periods of market volatility or economic uncertainty.

Should I switch from DIY investing to a financial adviser?

Switching may make sense if your financial situation becomes more complex, your portfolio grows significantly or you find managing investments stressful or time-consuming. Some investors use a hybrid approach instead.