How do I know if an adviser is worth the money or if I should do it myself?

12 February 2021

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Question by Grace

As first time investors and want to use 'do it for me' stocks and shares ISAs to invest a lump sum (ethically) for retirement savings.

We spoke to an IFA and are put off by the high percentage fees charged by the company.

Investing with a robo-advisor is attractive owing to the much lower charges. However, how can we find out about each company/fund's performance over the past 1, 3 or 5 years to know which might be best to pick or indeed whether the high charges of the IFA's company make it worth picking them instead?


Answered by James Mallinson

Hi Grace,

There are many attractions to DIY investing, not only the lower charges, but don’t forget that IFAs charge fees to do much more than just picking funds or products for you. Decent IFAs will help you plan what your money is for, where to put it (ISAs vs Pensions for retirement savings) how to take the right level of risk, how to minimise your taxes, forecasting your financial future with cashflow modelling, as well as asking you questions to work out if investing is the right thing to do in the first place or if you should consider other things such as paying down debt or saving for emergencies.

IFAs typically charge either an hourly rate, or fees of between 1-3% initially and 0.5%-1% per annum for their services. If however the firms you’ve spoken to don’t do this, or you just want to crack on with investing under your own steam, then websites such as Trustnet (www.trustnet.com) or Morningstar (www.morningstar.co.uk) enable you to search for a funds and find out their performance and charges very easily.

Be warned though – just picking funds based on their performance is advised against. You mention a preference for ethical investing so again trying to find a fund or product that matches your goals and objectives may be difficult on your own and is something an IFA could definitely help you with.

Answered by

James Mallinson

Chartered Wealth Manager

I’m James, a married dad with 2 children and 2 dogs. I’m unusual in the industry as I didn’t go to University, am under 40, but still rose in my career to be a Director at a FTSE listed discretionary fund management business.