The Retail Distribution Review, which came into force on 31 December 2012, has forced advisers to charge an upfront fee for their services rather than relying on commission from funds. This has led to many advisers refusing to serve those with smaller pots of savings, but Cox says that investors should not be daunted by handling their own money.
"As with most things, if you haven’t done something before it might be difficult, so the thing to do is to start doing something: take action."
"Start small and work your way up. The first thing is to make sure your finances are in place: make sure you have a cash reserve built up, and then the next steps are pretty simple."
"Most people do not have very complicated circumstances. They should be getting their debts down, keeping cash on hand for a rainy day, investing in longer-term stocks and shares ISAs and paying into a pension. It’s quite difficult to go wrong."
"I think the problem is that most IFAs will probably charge £1,000 to £1,500 to give you advice. So if you are only investing a few thousand, the fees are completely disproportionate to the amount you are trying to save."
"I would say that you need to have a pot of £50,000 to £100,000 before it becomes appropriate to seek advice."
Juliet Schooling-Latter, head of research at Chelsea Financial Services, says that this is a challenge for some people who are not used to managing their own money.
"I don’t think it’s ideal, because I think there are some people who require more help with their investments than others. I think there are going to be a lot of people priced out of the market."
"Some advisers require an even bigger sum of money [than £50,000] as well."
She agrees with Cox that an ISA should be the first port of call, although she says the amount of choice out there is difficult for investors to manage.
"If you have a small amount of cash, the place to start is with an ISA, and there’s a lot of research out there for free. So I think it’s possible with a little bit of time and effort to find a good service."
"You can get lost in the information, though. I think you want to look for somebody who will help you to narrow down the wide range of funds because there are thousands to choose from."
"You can also get model portfolios for those people who do not want to make the selection themselves."
The key question for self-advised investors to answer, Schooling-Latter says, is how much stomach they have for risk.
"If you’re really not comfortable with any risk at all, investing might not be for you anyway," she said.
"You also need to think about how long you are happy to have your money tied up for. If you are not happy to have it tied up for long, again, investing might not be for you."
Cox says that when it comes to selecting funds, investors are in a strong position these days.
"Ten to 15 years ago, far fewer people did DIY investing and you probably had to go through an adviser for most information."
"Nowadays there are so many direct services that all the information the adviser has, you have too."
"I think the short answer is you should only take advice if you really need it, if your situation is complicated. With all the information that’s available now on the web for free you can get portfolio tools and information about funds for free."
"If you are only investing a modest amount of money you can get that kind of assistance, which means you do not need to take advice."
However, Schooling-Latter (pictured) says there is a danger that unadvised investors will end up picking the most famous funds and overlook some better performers that get less attention, thanks to less marketing or being smaller in size.
"A lot of people end up in the biggest names but there are some great smaller funds and some great boutiques.""However, obviously if you are an investor you are likely to see the advertisements from the bigger houses and bigger funds and people post-financial crisis tend to prefer the names they know."
Schooling-Latter mentions FE Alpha Manager Neil Woodford’s Invesco Perpetual Income and Invesco Perpetual High Income funds as likely to attract many new investors.
She rates Woodford highly, but points out that there are very good funds such as Evenlode Income that do not get the same attention.
The five crown-rated, £19.3m Evenlode Income fund is run by Hugh Yarrow, who used to work for Rathbones.
The fund is top quartile over one and three years, having made 46.32 per cent over the longer period. The average fund in the sector is up 30.1 per cent over the same time.
Performance of fund vs sector over 3yrs
Source: FE Analytics
Data from FE Analytics shows the fund is currently yielding 3.41 per cent.
Schooling-Latter says that using the research made available for free on the internet is how to discover such lesser-known funds.
Cox says, however, that this kind of research is not for everyone, and sometimes isn't necessary.
"It depends on whether you enjoy it or you have the time to spare," he said. "Finding the first couple of well-established funds to put in your portfolio is fairly simple."