Hello, my last post was pulled pretty quickly! I'm brand new to this site and didn't realise I was overstepping the mark so apologies for that.
I am an IFA and most of the ideas on here are along the right lines.
Unfortunately if you are only investing small amounts of money it's true- the chances are the amount you pay for advice will be out of proportion from the benefit you're likely to get from it. It's a big frustration to most advisers but the FCA make us jump through so many hoops to give official advice, and we are taking on an endless potential liability, that unless (in our case) somebody has about £100,000 to invest we find it is not viable to go through a 'full advice' procedure.
The good news is that it has never been easier, or cheaper, to do it yourself. There is plenty of info online, and it is also quick, easy and cheap to set up S&S ISAs on an 'execution only' basis (i.e. no advice).
The problem with setting up a S&S ISA yourself is that you're faced with a bewildering choice of thousands of investment funds clamoring for your business, each with a sales pitch.
UK Index Tracker funds are a reasonable first port of call- they are cheap (you'll pay about 0.2% to 0.6%pa in management charges for one, depending where you buy it vs about 1.5%, or more, for an actively managed fund) which the argument runs will lead to out-performance over the long run. I used to be a big believer in them, and still am for certain clients in certain circumstances, but am less so now. These are cheap, but make no mistake- they are still extremely profitable for the people who run them- all they do is collect your money, replicate the market with a computer and keep the rest of the charge.
The problem with putting all your investment money here is that it's not brilliantly diversified. I'll grant that the FTSE 100 is actually quite global in its outlook (these massive companies derive much of their income from overseas and so are less sensitive than you may think to domestic ups and downs) but it's still only one 'asset class'- i.e. shares in big companies listed in the UK. Shares tend to be the riskiest things to invest in, and so having all your investment portfolio in just shares would be seen by the FCA to be actually quite high risk.
A good managed fund would also invest in bonds (loans to global government and businesses) as these can do well when shares do badly and so balance your returns (they did extremely well after the credit crunch), and maybe into commercial property and certainly shares in other markets around the world, and in smaller UK companies.
You can also get different 'flavours' of managed fund- i.e. cautious managed, balanced managed, adventurous, which might suit you.
My advice would be to invest in a few different funds on an execution only basis to start with, and get a feel for how it goes. It's normally free to switch funds further down the line if you change your mind, and it's not a problem to hold as many funds as you like.
While SIPPs (Self Invested Personal Pensions) can be a good idea in certain circumstances you should almost certainly get advice before setting one up- once the money is in there you can't get it back until at least age 55, and at that point you can only get a quarter of it straight back as cash, the rest as a restricted income.
Good luck with it!
Mark