Self-directed investing (SDI) is when an investor chooses not to use the services of an adviser but, instead, researches and makes investment decisions for themselves. Investors of this type are sometimes referred to as 'self-selectors'. When an investor makes their own investment decisions the resulting transactions are referred to as 'execution-only' transactions.
Investors who choose this approach are also responsible for:
- considering the taxation aspects of their investment choices
- selecting the various ‘wrappers' to hold their investments in
- reviewing their investments on a regular basis to ensure that they remain appropriate for their needs and circumstances.
Investors can hold investments directly, such as funds and equities, or can utilise their annual allowances (if they are eligible) to hold these investments within an individual savings account (ISA) or self-invested personal pension (SIPP).
A number of ‘platform providers' offer investment transaction and custody services that can be used by an investor to manage and administer their investments, as well as ‘fund supermarkets' which make accessing a wide range of funds and other investments more straightforward. Most platforms also offer a NISA wrapper and some offer a SIPP, whilst both NISAs and SIPPs are widely available from other types of investment service providers.
Self-directed investing is most appropriate for investors who are confident in making their own investment decisions and in reviewing and managing their own investments on a pro-active basis.
If you opt for an SDI approach and later find that you need advice, you should contact an investments expert.
The value of investments can fall as well as rise and you may not get back the amount you originally invested. Past performance is not a guide to future performance.
Gary Jones trading as Chewton Financial Planning is an appointed representative of The Whitechurch Network Limited which is authorised and regulated by the Financial Conduct Authority. Financial Services Register No: 190859 http://www.fca.org.uk/register.
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