When Lendy collapsed last month, it was fully authorised by the FCA. So should this mean better news for the property platform's investors?"I think there is scope for investors to be reassured by FCA authorisation as there are black and white rules that Lendy had to follow," Frank Wessely, partner at Quantuma, told Peer2Peer Finance News."It appears that Collateral was to a large degree 'smoke and mirrors' – whether that was intentional remains to be seen."However, Wessely noted that investors might have unrealistic expectations of the protection that FCA approval provides."I expect that investors are looking for reassurance and leadership from the FCA in the area of regulation, after the collapse of [mini-bond provider] London Capital & Finance, Collateral and Lendy," he said."However, what investors expect and want and what the FCA can provide might be two different things."I think non-sophisticated investors place too high a regard on FCA authorisation, expecting benefits and a level of protection that just aren't there."We need clear messages on what FCA authorisation actually covers and what it means for investors, so that there is a greater appreciation of associated risks.
Loans - Latest NewsThe latest loan from property-backed Seascape is now available. This A-rated tranche yields 8 per cent gross and has a five-year duration.
A Process Guide To Innovative Finance ISA InvestmentMoney&Co. lenders have achieved an average return of more than 8 per cent gross (before we deduct our one per cent fee). That figure is the result of £17 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders' capital is at risk. Read warnings on site before committing capital. The annualised bad rate on Money&Co. loans in five years of trading is under 0.04 per cent.All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.So here's our guide to the process:
Risk: Security, Access, YieldDo consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here's one of several earlier articles on security, access and yield.