24 Sept, 2016 - 30 Sept, 2016
What we've been reading this week...
Alternative finance models and the rise of the retail investor
According to World Bank estimates the alternative finance market could grow to $90 bn by 2020. The changing landscape of the financial service industry, a prolonged period of low interest rates, advances in financial technology and an increase in retail investors have culminated in a challenge to traditional business models. In the UK alone, last year saw investments through alternative finance grow by 84% to £3bn.
Institutional investors could help stop overblown crowdfunding valuations
Luke Davis, CEO of IW Capital examines the potential role institutional investors could play in protecting a rapidly expanding crowdfunding sector from inflated valuations. The UK’s alternative finance industry grew by 84% last year, in a Business Zone article, Davis suggests that in addition to crowdfunding platforms ensuring that their due diligence processes are second to none, they could also benefit from looking at the model used by larger scale finance from an institutional source.
10 questions to ask a P2P lender before investing
Every Investor takes a look at the 10 questions investors should ask a potential peer-to-peer lender before parting with any cash. Assessing a lender in terms of risk management, loan security, diversification, capital loss rate, withdrawal processes, borrower assessments, underwriting, loan terms and understanding the trade of between risk and returns is essential before a committing any money to a platform.
Lend Responsibly: Folk2Folk CEO Jane Dumeresque Shares Vision of P2P Lending
CrowdFund Insider interviews secured business lending platform Folk2Folk CEO, Jane Dumeresque about the importance of responsible lending and discusses her vision of the future peer-to-peer lending in light of FCA regulation and Brexit.
Three firms withdraw from P2P authorisation process
According to Bridging and Commercial, who recently submitted a freedom of information request to the FCA, no P2P lenders to date have had their authorisation applications declined. Since March three firms have withdrawn their applications with 85 applications still being processed. Of those 85, 39 are operating under interim permission. According to Jonathon Davidson, director of supervision – retail and authorisations at the FCA, the P2P sector is an important source of innovation but the regulatory authorisation process is complex and therefore it takes a significant amount of time to fully consider an application.
China's largest P2P lender Lufax taps four banks for Hong Kong IPO -sources
According to reports from Reuters China’s biggest peer-to-peer lending platform Lufax, which is currently valued at $18.5 billion, is in talks with four investment banks about taking lead roles in its planned IPO. Although nothing official has been disclosed and the timings and size of the IPO are undetermined, Citigroup, Morgan Stanley, JP Morgan and CITIC Securities have apparently started preparatory work. If it goes ahead Lufax would be the first P2P platform to list in Hong Kong.
Zopa is fuelling growth with riskier loans
Credit ratings agency Fitch released its first ever rating of a batch of securitized loans from P2P consumer lending platform Zopa. According to an article in Business Insider UK, Fitch’s analysis indicated that consumer marketplace lender Zopa is fuelling growth through riskier loans potentially opening itself up to higher default levels. However it is important to point out that Fitch note that Zopa’s lending policies are comparable to other established consumer lenders.
M&S, HSBC and First Direct cutting interest on regular savings accounts to 5%
Moneysavingexpert.com note that following the Bank of England’s cut to the base rate in August HSBC, First Direct and M&S are cutting interest on their regular savings accounts to 5% for new account holders. This equates to approximately £15-£18 less in annual interest to those who pay in the maximum amount each month.
Bribes to quit gold-plated pensions rise by a fifth as desperate firms try to cut the future cost of their schemes
Final salary pensions schemes are lucrative to retirees but increasingly expensive to employers. According to pensions advice firm Old Mutual, new rules that allow people to take their retirement pot as a lump sum has meant in increase in savers cashing in on their final salary pensions. Fuelled by the interest rates fall, firms are tempting staff with cash incentives to leave the schemes. However tempting this is experts warn savers should think hard about whether to leave since final salary schemes pay out more than it is usually possible to earn from investing cash.
50 brilliant tips to save you a fortune
This lighthearted article from thisismoney.com celebrating 50 years of Money Mail offers 50 tips to help save the pennies. From hiring out your driveway to never shopping in a pound shop.
How to retire at 55 – 8 top tips on early retirement
Retiring at 55 is out of reach for most of us but for those who commit to save rather than spend whilst working, it is still possible. In article for Daily Express finance, Danny Cox, chartered financial planner at Hargreaves Lansdown offers 8 tips on early retirement.
*Warning: nothing in this article should be construed as advice. Your capital is at risk