The True Cost of DIY Investment

Managing money takes time, experience and specialist tools. Here are some of the tasks needed to create and monitor a diversified portfolio:
  • Identify the best funds in each sector
  • Build a portfolio with the right risk profile
  • Keep track of changes at the funds
  • Rebalance regularly

If you apply a sensible cost to your time you might find that it would be cheaper to use a professional. Use our widget to see a side by side comparison of selecting and monitoring a portfolio of funds yourself versus letting the EQ professionals do everything for you.

Investment Tips

post
Active or passive funds?
Actively managed funds rely on exploiting inefficiencies in markets. This is harder to achieve in some areas, especially when investing in the largest quoted companies where there is a multitude of high quality research available.....more
post
Market timing is futile
Academic studies have demonstrated that even for professional investors a strategy of trying to second guess market moves is unlikely to be successful.....more

10 Common Errors

Investing successfully is difficult and time consuming. In this guide EQ illustrates some simple errors made my many investors that can have a big impact on returns.

Amongst the issues covered are: behavioural biases arising from the way our brains work, such as being unwilling to accept losses, portfolio management techniques such as diversification and regular rebalancing.

How we invest

The EQ investment process has been designed to reflect the best practices of investment managers around the world.

1. Asset Allocation

This step is based on evaluating which markets offer the best value.....more

2. Fund Selection

We build our portfolios around funds (find out why). Our team use sophisticated techniques to identify the very best managers in each sector.....more

3. Portfolio Construction

Building a portfolio has some similarities to creating a recipe - the ingredients must be good but also combine well together....more

4. Monitoring & Rebalancing

Investment markets are changing constantly. Portfolio managers need to be alert for the need to rebalance to take account of new circumstances and to rebalance following large market movements.....more

£
£
/hour
The minimum wage is currently £6.70/hour, and expected to rise to £9/hour by 2020.
The typical cost of tradesmen is £50-150/hour.

Compare the costs:

DIY Simply EQ Managed
Low Cost Best Ideas
Setup Costs {{xoseq.totals.diy.setup | currency:'£'}} {{xoseq.totals.lc.setup | currency:'£'}} {{xoseq.totals.bi.setup | currency:'£'}}
Ongoing Costs {{xoseq.totals.diy.grandTotal | currency:'£'}} {{xoseq.totals.lc.grandTotal | currency:'£'}} {{xoseq.totals.bi.grandTotal | currency:'£'}}
Year 1 Costs {{xoseq.totals.diy.y1Total | currency:'£'}} {{xoseq.totals.lc.y1Total | currency:'£'}} {{xoseq.totals.bi.y1Total | currency:'£'}}
The year 1 costs of DIY will be {{xoseq.totals.lc.differenceAmount | currency:'£'}} {{xoseq.totals.lc.differenceText}} expensive than letting the EQ professionals manage your money using the Low Cost Portfolio and {{xoseq.totals.bi.differenceAmount | currency:'£'}} {{xoseq.totals.bi.differenceText}} expensive than the Simply EQ Best Ideas Portfolio.

Detailed assumptions

diy   Simply EQ investment service

Portfolio setup time costs

Hours Frequency Cost Hours Frequency Low Cost Best Ideas
{{cost.desc}}{{cost.subDesc}} {{cost.diy.freq}} {{xoseq.getTimeCost(cost.diy) | currency:'£'}}   {{cost.seq.hours}} {{cost.seq.freq}} {{xoseq.getTimeCost(cost.seq)| currency:'£'}} {{xoseq.getTimeCost(cost.seq)| currency:'£'}}
Total set up time cost   {{xoseq.totals.diy.setup | currency:'£'}}     {{xoseq.totals.lc.setup | currency:'£'}} {{xoseq.totals.bi.setup | currency:'£'}}

Ongoing time costs

Hours Frequency Cost Hours Frequency Low Cost Best Ideas
Update personal risk profile {{xoseq.ongoingCosts.risk.freq}} {{xoseq.getTimeCost(xoseq.ongoingCosts.risk) | currency:'£'}} 0.25 Annual {{ 0.25 * xoseq.inputs.personalTimeValue | currency:'£'}} {{ 0.25 * xoseq.inputs.personalTimeValue | currency:'£'}}
Review funds {{xoseq.ongoingCosts.review.freq}} {{xoseq.getTimeCost(xoseq.ongoingCosts.review) | currency:'£'}}  
Rebalance allocations, check risk profile and style bias {{xoseq.ongoingCosts.rebalance.freq}} {{ xoseq.getTimeCost(xoseq.ongoingCosts.rebalance) | currency:'£'}}  
Total ongoing time cost   {{ xoseq.totals.diy.ongoing | currency:'£'}}   {{xoseq.totals.lc.ongoing | currency:'£'}} {{xoseq.totals.bi.ongoing | currency:'£'}}
Investment platform costs % £{{xoseq.inputs.platformCost * xoseq.inputs.portfolioSize * 0.01| number:2 }} EQ management fee {{ xoseq.getAnnualCost("low") | currency:'£'}} {{ xoseq.getAnnualCost("best") | currency:'£'}}
Total annual cost excluding fund charges   {{xoseq.totals.diy.grandTotal | currency:'£'}}   {{xoseq.totals.lc.grandTotal | currency:'£'}} {{xoseq.totals.bi.grandTotal | currency:'£'}}