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Peer2Peer Finance News | September 20, 2017

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Investors value projected returns over track record

Investors value projected returns over track record
Suzie Neuwirth

INVESTORS rank the expected rate of return as the most important factor when choosing an investment provider, research shows.

Analysis by bond provider Minerva Lending, based on a poll of 1,000 adults with more than £50,000 to invest, found 61 per cent consider the rate of return as the most important factor when choosing who to trust their money with.

The research, released on Friday, does not refer to peer-to-peer lending but investors appear to be looking for many factors that P2P firms offer.

49 per cent of respondents said past performance was an important factor for them, while 41 per cent of investors said they would like the ability to monitor performance and returns online.

Investors also valued being able to access their money, with 37 per cent wanting to know how long their funds would be locked up for as the biggest deciding factor.

A quarter also valued customer service levels as most important.

Read more: Even a millionaire couldn’t live off savings interest, RateSetter

“Anticipated headline returns clearly carry a lot of weight for investors when searching for investment providers,” Ross Andrews, director of Minerva Lending, said.

“Perhaps more surprising is that only half of the investors we polled considered past performance to be an important factor when choosing a provider.

“While some see track record as a fair gauge of future performance, for others the past is clearly in the past and has little bearing whatsoever on likely returns.

“What this research also reveals is that investment providers should not compromise on their reporting, but enable people to effortlessly monitor their investments. In the digital age, that’s key.”

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