Understanding investment approaches: DIY, DIWM, and DIFM explained



In today’s digital age, investment platforms have become a cornerstone of the financial landscape, offering investors a convenient and efficient way to manage their portfolios. With the rise of these platforms, investors are presented with a spectrum of approaches, each catering to different levels of involvement in the investment process. In this comprehensive guide, we’ll delve into the differences between three common investment approaches: Do It Yourself (DIY), Do It With Me (DIWM), and Do It For Me (DIFM).

Demystifying the investment platform

Before delving into the nuances of these investment approaches, let’s revisit the concept of an investment platform. An investment platform serves as a digital gateway, allowing investors to research, purchase, and manage a wide range of financial products such as stocks, bonds, funds, and ETFs. These platforms offer tools and resources that empower investors to make informed decisions, while also providing portfolio management services for those seeking expert guidance.

Exploring investment approaches

Do It Yourself (DIY)

The DIY approach is characterised by investors taking full control of their investment decisions and actively managing their portfolios. This hands-on approach involves conducting thorough research, selecting investments, and monitoring portfolio performance. DIY investors typically have a deep understanding of financial markets and are comfortable making independent investment choices. They relish the autonomy to build and adjust their portfolios based on their individual strategies and risk preferences.

Examples of DIY platforms include Hargreaves Lansdown, interactive investor, Fidelity and AJ Bell . To find out more, explore here or start comparing them here.

Do It With Me (DIWM)

DIWM represents a collaborative investment approach where investors work alongside a financial adviser. In this hybrid model, investors receive recommendations and guidance from an expert, while retaining the final decision-making authority. DIWM investors benefit from professional insights and personalised advice without completely relinquishing control over their investment decisions. This approach strikes a balance between independence and expert support, making it suitable for investors who desire guidance while maintaining a degree of decision-making power.

Do It For Me (DIFM)

DIFM is a fully managed investment approach in which investors delegate the responsibility of making investment decisions to a professional. Investors who opt for this approach entrust their portfolios to an investment manager, often paying a fee for their expertise. This hands-off approach is ideal for investors who lack the time, expertise or interest in active portfolio management.

DIFM investors benefit from the experience of skilled professionals who craft and oversee portfolios aligned with their financial goals and risk tolerance. This type of service can be expensive and the  minimum investment is high. Fully automated algorithm-based investment platforms, known as robo-advisers or digital investing platforms, also fall under the DIFM category, providing automated portfolio management based on pre-set criteria.

Examples of digital investment apps include Nutmeg, Moneyfarm and Wealthify.

Conclusion: Tailoring your investment approach

As you embark on your investment journey, it’s essential to align your approach with your financial goals, knowledge, and comfort level. Whether you choose the hands-on DIY approach, the collaborative DIWM route, or the fully managed DIFM path, investment platforms offer a versatile and accessible means to execute your chosen strategy. By understanding these investment approaches and evaluating your preferences, you can navigate the complex world of investing with confidence and purpose.

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