DIY Investing vs Investment Broker – How To Decide

Sponsored post by Ellie Lott.

More people than ever are looking for ways to invest their money. We all know there is a ton of conflicting advice out there. One thing we know for sure is there are bigger potential gains from investing than from simply keeping your money in a savings account. However, there is always an element of risk.

When looking to make the most of your investments, should you try DIY investing, or should you use an investment broker? Let’s look at some of the benefits and drawbacks of these options.

What is DIY Investing?

DIY investing simply means doing all your own research and choosing your own investments. This could seem very daunting, but it definitely has its benefits. It allows you to benefit from any profits of companies you invest in.

You will also have full access to any dividends these companies pay out to their shareholders. You are able to choose assets or funds that you believe will pay out good compound interest over the long term. Very importantly, you won’t lose any money in paying out fees.

The most important element of DIY investing is that you have complete control and keep all the profits gained. There is a vast abundance of online research tools and free financial advice that mean you don’t pay any agency fees.

People may choose to engage in DIY investing because they aren’t satisfied with the services or returns they receive from investment brokers. They may also have some distrust of the financial industry and want to take full control.

Pros and Cons of DIY Investing

The pros of DIY investing include having total control over what is happening with your money. You avoid any agency fees that come with using an investment broker. You can have total transparency over your returns and can manage your own portfolio.

Some potential cons are that you may not get access to investments that an investment broker may have access to. Another con is that you could potentially lose money. To make good returns, you will have to do a lot of research continually. You will also have to look into all of the laws and regulations around tax, which can be very time consuming.

How to DIY Invest

The first step in DIY investing is doing a ton of research. Assess all your investment options and choose which route you want to go down. You also need to pick a strategy. This could mean picking individual stocks or trusting an index-tracking fund.

You probably want to diversify your portfolio and invest in a wide range of different assets. This will help to minimize risk. You need to understand which are more solid investments and which are “wild card” investments.

You also need to research investment platforms. These platforms will make it easy to hold shares, bonds, funds, and EFTs. These platforms will charge fees.

When looking at stocks, you need to think about the company’s previous profits, their company management, and what analysts think about their future gains. You always need to stay alert of any news that might affect the company. Projects that sound too good to be true could be scams.

What is an Investment Banker?

A broker is an individual or an organization that will arrange and negotiate transactions between buyers and sellers. They will take a commission once the deal is finalized. Their income can come from commissions, fees, or pay from exchanges.

People may choose to use an investment broker because there are certain exchanges that will only accept investment from individuals or firms who are members of that exchange. It is likely that working with an investment broker will give you access to investment options that will be difficult to enter as a DIY investor.

As well as helping to execute buys and sales, an investment broker can also help to provide you with research, can help with picking stocks, with plans for your money, and with valuable market intelligence. You need quite a lot of money to use big firms in the city. These firms will provide you with a lot of financial advice.

These days many people are using online brokerages. These usually allow investors to trade at a lower cost. However, they are likely to offer you much less personalized financial advice. A full-service investment broker will offer you many options. Their advice will be tailored to your unique situation and attitudes.

Pros And Cons of Using An Investment Broker

A big advantage of using an investment broker is that it will save you a ton of time. They will already be familiar with a wide range of products and services that you can invest in. They will also be familiar with all the tools and platforms needed. This could take you a long time to get your head around.

An investment broker will have good access to financial products that you may not be able to invest in as a DIY investor. They might also be able to help you to negotiate or completely circumnavigate fees with certain investments.

A major con could be that if a broker is working on a commission basis, they may not actually try to find the best deals for you. They have an active interest in securing multiple deals rather than a few really great deals.

An investment broker may not guarantee what their fee will be before they undertake work for you. You may just not want to pay any agency fees at all. The fees may seem small, but they are still eating profits out of your pocket.

How To Choose An Investment Broker

When choosing an investment broker, you should know your investing style and your investment goals. Are you risk-averse or willing to take risks? Are you saving toward retirement or looking for short-term gains?

Make sure they are fully licensed and legal and check their reputation. Make sure you have a clear understanding of how much they are likely to charge.


If you want complete control over your money and have a lot of time to invest, you can consider becoming a DIY investor. If you are willing to pay some fees and give up some of the responsibility for your portfolio, then hiring an investment broker could be the best option for you.


SPONSORED CONTENT: Ellie Lott is a content writer passionate about millennial financial
planning and uses her website to help educate her generation on making
smart decisions with their money.

Photo by Jack Moreh from Freerange Stock.


Leave a Reply