Q. Should I go the do-it-yourself investing route or use a financial adviser?

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Q. Should I go the do-it-yourself investing route or use a financial adviser?

A. The web is filling up fast with lots of choice when it comes to the do-it-yourself investing approach. Some of the services have been around for a long time and many of the leading investing brands began offering their services direct to consumers in the US decades ago.

Do-it-yourself investing is growing

Here in Ireland, due to a variety of reasons, not least the fact there is not a general investing culture and investing literacy is also quite low, options have far more limited. There are also some unique taxation anomalies that make investment choice in Ireland much more cumbersome than is the case in many other EU countries. That said, in recent weeks, we have witnessed a pretty high-profile advertising campaign from a Dutch-based provider and the new entry from another (also based in Holland).

Understand the risks

If you are exploring going down this route, just ask yourself if you know what you are doing. Will you know how to examine the multitude of investment choice available on the platforms. How will you know which ETF, managed fund, equity, or bond to choose from? Will you be able to factor for investment risk and currency risk?  

Learn as you go

This is not to say you should not choose this option, but it does mean that you will be making decisions that will have real financial implications. A fundamental requirement when it comes to investing is time and diversification. If you factor for both and do the necessary analysis of your investment objectives, you should do fine. If not, perhaps you need to re-evaluate your motivations. Of course, you can also work with a professional until such time as you feel you have a good working knowledge of investments and perhaps then go down the do-it-yourself route.    

Frank Conway is Fonder of MoneyWhizz.

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