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How to be a DIY investor on and offline

With inflation on course to hit 5 per cent next year, the Financial Conduct Authority (FCA) has warned that 1.7 million UK savers could better protect their cash on the stock market.

For, as inflation races ahead of savings rates, their rainy day funds will be declining in real terms.

The FCA hopes savers will consider moving their money out of the bank and into low-risk investment products. But could there be a potential hitch in this plan?

Advice: The Financial Conduct Authority hopes cash-rich savers will consider moving their money out of the bank and into suitably low-risk investment products

While DIY investing has grown, the take-up varies between generations, according to a survey for personal finance platform 

Older people were less likely to invest: with only 41 per cent of over-75s saying they felt comfortable doing so after the pandemic (compared to 60 per cent of those aged 55 to 75).

Many investment products are online only. Most This is Money readers will be very happy using a DIY investing platform or even an app – and we outline how to do this and some of the best below – but some prefer not to, so how can you invest if you do not want to use the internet to do so?

The High Street

Investing via your bank hasn’t always been the wisest choice. In the early 2000s, the retail banking sector was rocked by controversies involving hefty fees, poor performance and mis-selling.

Now, though, the banks have offers tailored for everyday customers. NatWest, Barclays, Lloyds, Santander and HSBC have investment funds that allow customers to spread their money across shares, funds and other assets.

Many services are available online. But at Barclays and Santander customers can book a phone call with an investment planner.

Do it yourself

When it comes to investment platforms, the picture is different: with many offering offline options.

Sarah Coles, of platform Hargreaves Lansdown, says: ‘Not being comfortable online doesn’t mean you have to rule out investing.’ The firm and other big platforms (including Fidelity and Charles Stanley) offer a more ‘old-fashioned’ investment model.

Customers set up an account by phone, then pay into it by bank transfer, debit card or direct debit. Then you speak to a broker by phone and buy shares and funds, or send instructions by post.

The services are ‘execution only’, meaning you pick your investments. But you can read about shares and funds in newspapers. Platforms usually have their own guides, too. 

However, they may charge offline customers higher fees to cover costs. Hargreaves Lansdown charges phone or postal customers a 1 per cent fee (with a minimum £20, and maximum £50) on each order.

For online customers, the charge is £11.95 for shares and investment trusts — while funds can be bought and sold without any fees at all.

This means an offline customer investing £20,000 evenly across five funds would pay £200 more.

Generation gap: Older people remain less likely to invest: with only 41% of over-75s saying they felt comfortable investing after the pandemic

 Generation gap: Older people remain less likely to invest: with only 41% of over-75s saying they felt comfortable investing after the pandemic

Seek advice

One alternative is to hire a financial adviser to manage your money.

Many High Street IFAs (independent financial advisers) will set up an investment portfolio (using a regulated platform) for a client, but this comes at a cost.

How to be a DIY investor on and offline

Most charge for an initial meeting, then an annual percentage fee based on your portfolio. Which? says the latter can hit 1.94 per cent —about four times the amount charged by platforms: and it can affect long-term returns.

Research for platform Vanguard showed an annual fee of 2 per cent levied for 25 years could result in a loss of 40 per cent of potential returns.

Compounding means not only are you losing 2 per cent a year, you also miss out on future returns from that extra money.

It pays to think carefully before paying for a financial adviser. The firm Unbiased — which has a telephone helpline (0800 023 6868) — may be able to help you find one.

Mixed options

If you are happy to invest online but want a hands-off approach, there are options. ‘An economical option is to sign up to a monthly investing plan,’ says Myron Jobson of platform Interactive Investor.

Customers set up a plan online, but then let their funds grow automatically via direct debit.

Most of the major DIY investing firms offer this service and also the ability to automatically reinvest dividends 

Helpful numbers: Charles Stanley: 020 3930 1236; Fidelity: 0333 300 3350; Hargreaves Lansdown: 01179 009 000

Compare the best DIY investing platforms and stocks & shares Isa

How to be a DIY investor on and offline

Investing online is simple, cheap and can be done from your computer, tablet or phone at a time and place that suits you.

When it comes to choosing a DIY investing platform, stocks & shares Isa or a general investing account, the range of options might seem overwhelming. 

Every provider has a slightly different offering, charging more or less for trading or holding shares and giving access to a different range of stocks, funds and investment trusts. 

When weighing up the right one for you, it’s important to to look at the service that it offers, along with administration charges and dealing fees, plus any other extra costs.

To help you compare investment accounts, we’ve crunched the facts and pulled together a comprehensive guide to choosing the best and cheapest investing account for you. 

We highlight the main players in the table below but would advise doing your own research and considering the points in our full guide linked here.

>> This is Money’s full guide to the best investing platforms and Isas 

Admin chargeCharges notesFund dealingStandard share, trust, ETF dealingRegular investingDividend reinvestment
AJ Bell YouInvest0.25% Max £3.50 per month for shares, trusts, ETFs. £1.50£9.95£1.501% (Min £1.50, max £9.95) More details
Bestinvest0.40%Free£7.50n/an/aMore details
Charles Stanley Direct0.35% No platform fee on shares if a trade in that month and annual max of £240Free£11.50n/an/aMore details
Fidelity0.35% on funds£45 fee up to £7,500. Max £45 per year for shares,  trusts,  ETFsFree£10Free funds £1.50 shares, trusts ETFs£1.50More details
Hargreaves Lansdown0.45%Capped at £45 for shares, trusts, ETFsFree£11.95£1.501% (£1 min, £10 max)More details
Interactive Investor £119.88 as £9.99 per month£7.99 per month back in trading credit£7.99£7.99Free£0.99More details
iWeb£100 one-off£5£5n/a2%, max £5More details
FreetradeFree for standard account £3 month for Isa Freetrade Plus with more investments is £9.99/month inc. Isa feeNo funds Free n/a n/a More details 
Vanguard 0.15%  
Only Vanguard funds
Free Free only Vanguard ETFs Free n/a More details 
(Source: July 2021. Admin charges quoted annually, may be monthly or quarterly)