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Expert reveals one mistake every investor makes: "It can erode your portfolio"

ended 14. October 2025

A FINANCIAL expert has revealed the one mistake every investor makes that can “erode your portfolio”.

Investors relying on the big high street banks for wealth management may be paying significantly more than they need to and not necessarily getting the performance to justify it, financial experts say.

Financial advisers report that they have recently reviewed a number of client portfolios, ranging from £500,000 to several million pounds, all managed under the big banks’ own investment arms or through joint venture partnerships. 

They claim that in almost every case, the charges were up to 1% a year higher than comparable independent or DIY solutions.

Dr Ramin Nakisa, Managing Director at PensionCraft Ltd, said that paying high bank fees is the one mistake every investor makes.

He added: "Books are great but ‘doing’ is better – you learn more making mistakes. Start with small amounts until confident, and never take more risk than you need. Keep it simple - a handful of funds are enough to get a diversified portfolio. 

"Check fees and how much you have invested in each asset type. This helps control risk. Ask someone you trust to look at your portfolio occasionally or join an active investment community like PensionCraft that help with these goals.

"A useful tool is our ‘GULP’ calculator that shows how fees of 1 or 2% can erode your portfolio. A confident investor managing their own funds via a passive tracker with fees typically 0.15%, could literally end up with hundreds of thousands more over time."

Antonia Medlicott, Founder & MD at Stonehouse-based Investing Insiders, gave more advice on DIY investing.

She continued: "The number of DIY investment accounts in the UK has more than doubled since the start of 2020 to 12 million. The key thing we urge people to understand is that investing is about thinking long-term. 

"Seeking quick wins on short-term market fluctuations is trading, and that's a risky business that even professionals only get right around half the time. Whereas, investing focuses on giving your money years to benefit from compounding returns and market recoveries. 

“The best news about DIY investing is you don't need thousands in the bank to open an account. Many DIY platforms allow you to start with just £1. And the growth that's possible on even small deposits really shocks people. Just £50 a month with annual 7% returns produces £16,083 over 15 years. £7,033 of that is interest. Those kinds of returns should be open to more people - DIY investing allows that.”

Philly Ponniah, Chartered Wealth Manager and Financial Coach at Philly Financial, warned against taking “tips” from unqualified people.

She added: "Before diving into DIY investing, get clear on what really matters to you - your goals, values, and time horizon. That clarity helps you stay focused on long-term growth rather than chasing quick wins. Day trading is a very different game from building a steady, diversified portfolio for the future. 

"I talk about investing online because I want to help close the gender investing gap and this starts with education. However, I’m always careful not to give advice, because what’s right for one person could be wrong for another. 

“Be cautious of stock ‘tips’ from unqualified voices as they often fail to address individual circumstances and promote individual holdings as opposed to diversified portfolios. DIY investing can work if you stay diversified and calm through the wobbles, but if that feels daunting, a professional or model portfolio can offer structure and peace of mind.”

Rob Mansfield, Independent Financial Advisor at Tonbridge-based Rootes Wealth Management, said DIY investing isn't for all.

He continued: "It can work for some but it's not for everyone. It largely comes down to two things. How much time you are willing to spend on it and your temperament. Time is important because to have an edge, at the very least you need knowledge and to think things through, which takes time. Temperament because what happens when the market takes a dive, how are you going to react? If you're not comfortable with that responsibility, then investing via professionals might be a better fit for you."

 

7 responses from the Newspage community

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Dr Ramin Nakisa
Managing Director at PensionCraft Ltd
Books are great but ‘doing’ is better – you learn more making mistakes. Start with small amounts until confident, and never take more risk than you need. Keep it simple - a handful of funds are enough to get a diversified portfolio.

Check fees and how much you have invest in each asset type. This helps control risk. Ask someone you trust to look at your portfolio occasionally or join an active investment community like PensionCraft that help with these goals.

A useful tool is our ‘GULP’ calculator that shows how fees of 1 or 2% can erode your portfolio. A confident investor managing their own funds via a passive tracker with fees typically 0.15%, could literally end up with hundreds of thousands more over time.
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Editor
Samuel Mather-Holgate
Managing Director & IFA at Mather and Murray Financial
DIY investing is better than no investing at all, provided you do the research and gain an inderstanding of how investments work. However, there have been much analysis done on client with financial advisers verus those without, and the consensus is that those who take advice from a professional will end up wealthier than those who don't.
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Editor
Scott Gallacher
Director at Rowley Turton
I’ve certainly come across many DIY investors who do a perfectly good job. However, I’ve seen far more with unnecessarily expensive portfolios, ones much riskier than the investor realises, or those that simply buy last year’s winner and inevitably catch next year’s losers. For those with the time, interest, and expertise, it can be enjoyable and profitable. But for most people, handing it over to an independent expert is far easier and often better — with the added benefit of consumer protection should things go wrong.
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Editor
Philly Ponniah
Chartered Wealth Manager and Financial Coach at Philly Financial
Before diving into DIY investing, get clear on what really matters to you - your goals, values, and time horizon. That clarity helps you stay focused on long-term growth rather than chasing quick wins. Day trading is a very different game from building a steady, diversified portfolio for the future. I talk about investing online because I want to help close the gender investing gap and this starts with education. However, I’m always careful not to give advice, because what’s right for one person could be wrong for another. Be cautious of stock “tips” from unqualified voices as they often fail to address individual circumstances and promote individual holdings as opposed to diversified portfolios. DIY investing can work if you stay diversified and calm through the wobbles, but if that feels daunting, a professional or model portfolio can offer structure and peace of mind.
Copy

Editor
Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
It can work for some but it's not for everyone. It largely comes down to two things. How much time you are willing to spend on it and your temperament. Time is important because to have an edge, at the very least you need knowledge and to think things through, which takes time. Temperament because what happens when the market takes a dive, how are you going to react? If you're not comfortable with that responsibility then investing via professional might be a better fit for you.
Copy

Editor
Antonia Medlicott
Founder & MD at Investing Insiders
The number of DIY investment accounts in the UK has more than doubled since the start of 2020 to 12m. We created Investing Insiders to meet that rise in demand and help people understand all the risks and benefits of DIY investing.

The key thing we urge people to understand is that investing is about thinking long-term. Seeking quick wins on short-term market fluctuations is trading, and that's a risky business that even professionals only get right around half the time.

Whereas, investing focuses on giving your money years to benefit from compounding returns and market recoveries.

The best news about DIY investing is you don't need thousands in the bank to open an account. Many DIY platforms allow you to start with just £1. And the growth that's possible on even small deposits really shocks people. Just £50 a month with annual 7% returns produces £16,083 over 15 years. £7,033 of that is interest.

Those kinds of returns should be open to more people - DIY investing allows that.
Copy

Editor
Pete Mugleston
Mortgage Advisor & Managing Director at onlinemortgageadvisor.co.uk
Studies show nearly half of UK investors are now under 30, driven by social media and easy-access investing apps. Stock market investing carries some risk compared to savings accounts, but it’s far less volatile than crypto.

If more young people focused on low-cost global ETFs instead of speculative tokens, we’d see far greater financial stability and long-term wealth building across this generation.