It’s Time for Advisers to Embrace P2P Lending
In a recent FTAdviser ‘Opinion’ feature (April 20), author Kevin Caley addressed the issue of continuing adviser caution making peer to peer investment recommendations.
With more and more platforms like Proplend fully authorised by the Financial Conduct Authority (FCA) and the UK P2P market maturing nicely; “… fixed rates of interest, with returns not susceptible to market turbulence” are increasingly hard to ignore.
Client interest in peer to peer lending has reached an all-time high one year on from the introduction of IFISA (Innovative Finance ISA) and many UK investors will be asking their advisers for P2P product and provider recommendations.
With fresh £20,000 (2017-18) ISA subscription allowances available to invest, advisers may be forced a little out of their traditional asset class ‘comfort zone’ – their clients demanding higher returns on investment and tax free fixed income. Whether advisers initiate the P2P discussions themselves, the benefits of loan (debt) investments are clear and the reservations surely dissipating.
Initially justified concerns about regulation and capital protection in an industry in its infancy have been appeased with time and platform approval by the FCA. Alternative steps platforms have taken to minimise lender risk in the absence of Financial Services Compensation Scheme protection, must also be assuring to Advisers and clients alike.
Advisers with any lingering concerns about the sector will need to decide if they want to maintain client confidence by being proactive with their peer to peer investment recommendations. Or whether they are happy to merely react to their increasing number of clients who are ‘shopping around’ and conducting their own interest rate research.
Proplend connects investors directly to creditworthy borrowers secured by income producing commercial property – enabling investors to earn attractive rates of risk adjusted returns and borrowers to gain access to funding which is not otherwise available.
All Proplend loan investments benefit from first legal charge security over an income producing UK commercial property (maximum 75% LTV) and a six-month interest reserve. Following the award of ISA Manager status by HMRC last month, Proplend’s IFISA is due to launch in the next few weeks.
Register as a Proplend Lender (no obligation to invest)
Proplend Wealth is our online portal for advisers and wealth managers, enabling them to register, monitor and provide advice to their clients on the specific loan investments on the platform – both for their Proplend account and their IFISA account.