For a long time I believed I was the ideal person to manage my own pension. I spend my working life around pensions and investments. I have access to the research, with more market commentary flowing into my inbox than is reasonable. If anyone could manage their own investments sensibly, surely it was me.
It took a few years, and a few decisions I’d rather forget, to accept I was wrong.
What actually happened
Knowing a lot about investing turned out to be a different skill from doing it well.
I’d sit down to review my own portfolio, weigh up the options, and close the laptop having decided nothing. A strategy of sorts, I suppose. Not one I’d recommend to clients.
When I did act, I wasn’t always right, and if I was, I would often be too late.
The odd thing was that I’d have spotted every one of those mistakes in a client’s portfolio straight away. In my own, I either couldn’t see them or saw them and talked myself around them anyway.
I was a bit like the builder who’ll happily fix a relative’s leaking roof on a Saturday, while there’s been a bucket under his own for three winters.
Handing it over
A few years ago I gave up, or, to put it more kindly, I delegated.
I moved all of my pension into the same investment solution we use as the core of our client proposition, overseen by Morningstar Investment Management Europe. Money goes in every month, and I don’t have to decide where it goes – they manage it and rebalance it.
Very rarely do I think about it, which is a strange admission from someone who you might assume thinks about markets daily for a living.
I’ve been far happier with how it’s gone over the last three or four years than I ever was when I was running it myself.
The bit nobody practises
Most of the people I work with are very capable. Many are lawyers or senior bankers, used to being the expert in the room. It’s natural to assume that managing your own investments is just another thing you can learn to do well.
What’s harder is acting on what you know when markets are falling, and every headline suggests things are about to get worse.
Take timing. Selling when you expect a fall can feel like the sensible, even astute thing to do, and sometimes you’ll even be right.
The question that catches people out comes afterwards: when do you get back in?
In my experience, markets often recover before the news does, and investors who wait for things to feel safe again can miss the part of the recovery that matters most.
I’ve watched clients do this. I’ve even done it myself. Over the long term, being out of the market at the wrong moment is one of the bigger risks an investor takes.
What advice actually costs
A prospective client asked me recently whether advice was really worth paying for, when he thought was perfectly capable of managing his own investments and had the time and inclination to do so. It’s the objection I hear most. Fees are charged every year, and over time that adds up. Fees matter. They drag on returns and should be kept firmly under control.
What I told him, as gently as I could, was that advice would cost him something, but probably less than his own behaviour might. Staying invested when it’s uncomfortable, and not panicking when markets drop, tend to make a bigger difference to the outcome than the fee does.
There’s also some research behind this. Morningstar’s 2025 study of US funds found that over the ten years to the end of 2024, the average dollar invested returned 7% a year, while the funds themselves returned 8.2%. The difference comes down to when investors bought and sold. Ready-made multi-asset funds, where investors have fewer decisions to make, had one of the smallest gaps.
Some researchers think that figure overstates how much is down to poor timing, and it’s American data. Even so, it matches what I see.
I’m aware how this sounds coming from an adviser. Some people are very good at managing their own investments, calmly, for decades. If you’re weighing it up, though, it’s worth looking back at what you actually did the last time markets fell sharply.
I still read the market commentary, out of habit in part, and also because I need to be on top of this stuff. I’m aware of what’s happening in the markets and wider economy, but I’m also aware that it doesn’t really matter! I just don’t act on it with my own money anymore.
The fee I pay is there on a statement every year, easy to see. The decisions I no longer make don’t show up anywhere, so I can only guess what they would have cost me. More than I’d like to admit, I suspect.
If you’ve been weighing something similar, I’m always happy to talk it through.
📩 Email us anytime: info@charltonhousewm.co.uk
📞 UK: +44 (0) 208 0044900
📞 Hong Kong: +852 3903 9004
Production