Traditional vs Digital Investing

  • Written By: George Haggas
  • Published: Mon, 13 Jul 2020 15:00 GMT

A new generation of investors have been compelled to explore simpler, cheaper and more autonomous investment platforms, which are only too easy to find these days. But do digital platforms really offer the best solution for today’s young investor?

Young Professionals Web Article

In recent months, those who felt confident enough to build and manage their own investment portfolio on a “DIY” platform are likely to have experienced some unsettling moments with the FTSE 100 down as much as 30% from highs in March (Reuters). If you chose to use a Robo-advisor the experience is unlikely to have been any more pleasant.

Bear markets (when stock markets fall in price) test the nerve of all investors, but for novice investors a falling market poses many questions; “should I sell before it falls further?”, “should I add more cash?”, “what is causing this?”, “when will it end?”. This can lead to poor decision-making. Selling out when markets have already tumbled 30% means you may miss the bounce and consolidate losses. This can have a disastrous effect on your long-term wealth.

This is where having a dedicated investment manager can come into its own. Having someone familiar with market volatility, to explain these movements and give clear advice and direction on potential changes to a portfolio, provides you with a level of reassurance not possible from Robo-advisers or DIY platforms.

It is also handy to have someone who is familiar with your individual circumstances and can help you construct a financial plan. For example, they can help you decide whether it is more advantageous to increase mortgage payments or contribute to your ISA/pension. They can help construct an active portfolio that aims to benefit from a fast-changing world rather than one that simply tracks an index.

While Robo-advisers can look optically cheap, wealth managers benefit from ‘institutional’ pricing, which means they buy active investments at more competitive prices. It may end up cheaper than using a platform to build a portfolio of funds.

So, how much value can be applied to appointing a professional to manage your financial affairs?

We believe that the relative value of our Young Professional Investment Service over and above the alternatives is significant. We combine a digital platform where you can view your investments with the benefits of having a human being at the end of the phone.

The last six months has shown that investment markets can be an unsettling place and in such an environment we ask why you wouldn’t want a professional, with all their access to market research and data, to take on that stress on your behalf and safeguard your assets for whatever your long term plans.


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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

Risk warning
Investment does involve risk. The value of investments and the income from them can go down as well as up. The investor may not receive back, in total, the original amount invested. Past performance is not a guide to future performance. Rates of tax are those prevailing at the time and are subject to change without notice. Clients should always seek appropriate advice from their financial adviser before committing funds for investment. When investments are made in overseas securities, movements in exchange rates may have an effect on the value of that investment. The effect may be favourable or unfavourable.

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