A new survey has found that the number of people looking after their own investments rather than a professional advisor has shot up 188 per cent from the original forecast before the introduction of the Retail Distribution Review to 23 million.

A new survey has found that the number of people looking after their own investments rather than a professional advisor has shot up 188 per cent from the original forecast before the introduction of the Retail Distribution Review to 23 million.

According to the report by online advisor Wealth Horizon, 11 million people are choosing to manage their investments themselves because financial advice is too expensive, despite one in ten (10 per cent) feeling that their portfolios are performing worse than if they were with an advisor.

Chris Williams, chief executive of Wealth Horizon, said that the advice gap created by the introduction of the RDR had resulted in a situation “now far worse than originally predicted”.

“Price remains a barrier for many people looking for investment advice and, as a result, we are seeing a huge number of investors engaging in the process on their own. These DIY investors are at risk of losing money because they are not experienced enough in managing their portfolios. Essentially, they are negating the saving that they actually make by not using an adviser,” said Williams.

One of the unintended consequences of the RDR has been the advice gap, which has priced consumers out of receiving independent financial advice, creating a problem sometimes described as "orphan" clients.

Since the RDR was introduced last year, a number of banks have pulled out of offering advice, including Santander, Clydesdale, Yorkshire and Co-op, while others, such as HSBC, Lloyds and Barclays, only offer services to high net worth individuals. In addition, a number of financial advisors have increased their hourly fees, which has also exacerbated the problem.

“We are of the belief that the advice gap now only exists because people are unaware of the options available to them. People can now access affordable and regulated advice through our site, meaning that advised investing can now be a central part of a person’s financial planning rather than a pursuit afforded only to the wealthy,” said Williams.

The survey also found that men are less likely to use a professional advisor than women, with 67 per cent of men "DIY investing", compared to 57 per cent of women.

On a regional basis, people in London were most likely to look after their own investments (68 per cent), compared with just 52 per cent of those in East Anglia. Those in Northern Ireland are most likely to feel that financial advisors are too expensive (52 per cent), against just 29 per cent of Londoners.

Aside from the cost, other reasons why investors choose to start DIY investing include not wanting to trust a stranger with their money (20 per cent) and not feeling comfortable with talking to people about their finances (13 per cent).