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Investors are becoming savvier in going it alone

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DIY investors are becoming increasingly investment savvy as they try their hand at going it alone, according to a report from Legal and General.

The research, which aims to investigate the views in the independent financial advisers (IFA) community, shows that 95% believe their clients are increasingly trying their hand at DIY investing.

This report comes as the retail investment sector prepares to implement the retail distribution review (RDR) in January 2013.

The research also highlights that 53% of IFAs believe there will be a rise in the number of DIY investors in the market because of RDR.

Simon Ellis, managing director at Legal & General Investments, said: “In the current climate and with the imminent implementation of RDR, it is no surprise that many IFAs believe their clients are already trying their hand at DIY investing.

“Investing without an appropriate level of knowledge or support could mean a rise in unsuitable investments. However, it is interesting to see that some IFAs think DIY investors are savvier now than last year.”

Of those IFAs who expect an increase in DIY investing, 61% believe they will see more providers launch direct to consumer products, while almost one in five believe that consumers are likely to become more investment savvy.

However, fewer IFAs think that an increase in DIY investors would lead to consumers ending up with unsuitable investments. This fell from 79% in 2011 to 68% in 2012.

Ellis added: “It would be naïve for advisers or providers to assume that access to information and decision support via the internet will not encourage more consumers to make their own investment choices. The challenge will be to show the value of advice over data gathering and cheap execution, or to become a player in this non-advised marketplace.”

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