Editor: The new Financial Conduct Authority (FCA) rules for governing the burgeoning peer-to-peer (P2P) lending sector should be welcomed by the industry, especially in the current climate (‘FCA reveals new P2P rules days after Lendy collapses’). However, they are not enough.
The industry needs to work harder to educate consumers about the importance of doing their own due diligence and how to use the information the new rules and guidance will make available.
This will contribute to retail investors making more informed investment decisions that are appropriate for their risk appetite.
Even before the FCA’s announcement, British Pearl had put in place an onboarding process to ensure that our investors clearly understand our product and that the capital they commit is an amount they can afford.
If P2P platforms not only adhere to the new FCA regulations, but go further – working to educate investors and committing to being transparent about product risk – it can only lead to stronger foundations across this new and innovative industry.
Over the longer term, transparency and robust core business models within the P2P sector will drive investor returns and confidence in the sector, helping to bolster and diversify portfolios through market cycles and uncertain times.
James Newbery, investment director, British Pearl
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