Be cautious before going it alone

If you do what I do, which is analyse the long-term savings and investment market, then spring means something quite different. This is when we get all the good stats from the year gone past, and 2025 had lots of interesting trends to glean.

One of the things we saw last year was that direct investing – where you don’t consult an adviser – saw really fast growth in client numbers. In one sense that’s not surprising – there are only so many advisers to go round. Some of the numbers were huge – ii (owned by Aberdeen) now serves half a million clients, and Moneybox added a remarkable 400,000 clients last year. Hargreaves and AJ Bell both posted big numbers too.

So well done to that lot –trebles all round. What interests me, though, is that for the first time we’re hearing reports from advisers that after years of strong returns in a relatively benign market, investor confidence is such that some of you are sacking them in order to go it alone.

So, if you’re thinking of doing the same, what should you bear in mind?

Firstly, investing is easy when markets are kind. That’s not a criticism – staying invested through even brief volatile periods, such as we’re experiencing now, is a discipline which takes, well, discipline. But the confidence you feel may owe more than you think to the steadying hand of the adviser you work with.

Have you heard of the Dunning-Kruger effect? In case you’re hazy over the theory, it describes the tendency for people to overestimate their own competence, often with hilarious, or in this case, very expensive, consequences.

With investing, it’s easy to look good in good times. The big question is how confident will you be when things turn against you? We only have to look to the front pages to see a world in flux, and no-one is immune to that.

So what do you walk away from if you leave your adviser? Most of the time, their value shows up in the things they help you avoid, and that makes it easy to forget. For example, advised clients were much less likely to cash in pensions as a result of Budget rumours on tax-free cash removal than those who didn’t have someone to tell them to haud their horses.

Look, direct investing isn’t a bad thing. The platforms are great, you don’t have to pay an adviser, and you can get lots of useful guidance. But if you’re thinking of making the leap on the back of a few strong years, consider what’s important to you, and what you don’t see.

Decisions made in the round – in springtime or any time – are usually the ones that work out best.