Is it riskier to buy shares of stock instead of investing in funds?
No. Today you can easily and cheaply create a stable and risk-diversified portfolio. The reason behind this is that when you own just 10 different stocks that are spread across most industries, you already will have a good risk spread. Owning more stocks does not provide much more in terms of reduced risk.
To be clear, we are not saying that if you randomly choose stocks to buy it will be better than the banks' managers. We mean that historically fund managers have not been even close to bringing more value through their options in comparison to what they remove in terms of fees. In the long run, funds fees can be seen as a much greater risk than company-specific extreme events.