New rules for financial advisers meant to end commission bias mean that a charge or fee will have to be agreed upfront from next January.
But more than half of all consumers say they would refuse advice if asked to pay a fee, according to research by advisers, Deloitte.
In similar research by rival Ernst & Young, 10% of investors said they believed their adviser worked "for free" while 21% did not know how they were paid.
When researching a new product, 59% say they would use an online comparison website while only 36% would seek out a financial adviser.
Research from Legal & General Investments shows 95% of independent financial advisers believe their clients are already increasingly trying their hand at DIY investing.
The rewards ought to outweigh the risk. Long-term savers who have shunned the stock market over the last 10 years have missed out on doubling their money, according to research published this week by online investing community, The Motley Fool.
The UK market, as measured by the FTSE 100, has delivered a total return of more than 100% over the last 10 years compared to a return of around 12% saved in a typical deposit account, it said.
That means each £1000 put into the market would, in theory, be worth £2023 today against £1127 for keeping it in cash.
David Kuo, director at The Motley Fool, says: " Many Britons are unsure, unwilling and unprepared to invest in shares. As a result they are missing out on one of the simplest and best inflation-beating investments available."
It is easy enough to open an account with an online broker or an investment platform such as Hargreaves Lansdown, TD Direct or Alliance Trust. But in a sea of confusing choices, how do you pick the right investment, and would fees for advice be worth it?
Sales of auto-managed tracker funds, rising and falling with a market index, were higher than sales of actively managed funds in the first half of this year, as investors "rejected paying hefty annual management fees for poor performance", says the Investment Management Association.
Over £1 billion was pulled out of active funds, while £272 million was ploughed into tracker funds. The total annual cost of an actively managed fund averages 1.5%, compared with 0.7% for a FTSE tracker fund.
According to independent financial research company Defaqto, "passive investing" is gaining acceptance among independent advisers who are "frustrated over the performance and the cost of many active funds".
But why not use a financial adviser to find the best funds run by star managers, which promise to outperform the market? One answer is that 60% of actively-managed funds in the UK All Companies sector have failed to beat the benchmark FTSE all-share index in the past 10 years, despite charging much higher fees, according FE Analytics data.
If you or your adviser managed to pick out one of the top 10 best-performing funds, you would have made an average 164%, but Alan Dick at 42 Wealth Management in Glasgow says passive investing is increasingly being used by financial planners.
"Research shows investors consistently fail to capture the returns of the market. Don't try to beat the market, but cut the costs by as much as you can and you will beat 90% of people."
Until recently the choice for passive investors was largely limited to tracking the FTSE 100 or FTSE All Share. But according to Investment Management Association (IMA) research, the proportion of investments put into non-UK equity trackers increased from 19% to 30% between 2005 and 2010, while 51% of the 81 tracker funds that the IMA monitors are invested in a spread of indices.
It says buying such funds can these days be done in various ways, such as on an investment platform or through an Isa. Advisers who specialise in this area can access ultra low-cost trackers linked to different sectors of the market.
There are also plenty of less conventional but attractive-sounding investments out there on the internet, promising to make those sorts of returns, that could trap unwary DIY investors.
Alasdair Sampson, an Ayrshire-based specialist adviser, warns: "The majority of the public will not be prepared to pay fees for financial advice. They will do it themselves online. Personally, I see this as inviting even more scams and rip-offs but the investor is going to find it very hard to get compensation where an investment, in which they should not have invested, fails."
He adds: "Investors need to be aware of the risks that this type of investment arrangement means for them and that some simple precautions may help to avoid – simply printing or retaining PDF copies of the providers' online screens and documents. From experience most people do not do that."
ALLAN Annat, a veterinary surgeon from Stonehaven in Aberdeenshire, first took the plunge into DIY investing in the days of personal equity plans (PEPs), and decided to test shares against cash.
"I put £100 a month into Glaxo shares for five years and concurrently £150 into a cash account with a bank. At the end of five years I had more money in my Glaxo PEP than in the bank and I thought maybe the future was to dabble in the stock market."
Annat reads widely about shares and now has a self-select Isa and a share account with The Share Centre.
He says: "It's also a bit of fun. Sometimes it's a white-knuckle ride, other times you think this has been a good day, which helps when you come in at night after calving a cow."
He adds: "I do have pension schemes but to be honest if I had my time over I am not sure I would have followed the pension route."
Income Funds 26%
Asia Pacific 18%
UK All Companies 15%
UK Growth 12%
Aberdeen Emerging Markets
Newton Global Higher Income
Newton Asian Income
Source: Barclays Stockbrokers, August 2012
Contextual targeting label: