P2PFA looks to woo intermediaries

THE PEER-TO-PEER Finance Association (P2PFA) is looking at ways of boosting distribution for members.

Paul Smee (pictured), chair of the self-regulatory body, said he was keen on getting brokers and financial advisers more interested in the sector.

“Some have seen P2P as a cottage industry in the past,” he told Peer2Peer Finance News. “There is a case for explaining how the sector works and how it is filling an important gap where banks are losing interest.”

Read more: Funding Circle loanbook hits £5bn as P2PFA reveals health of the sector

While many platforms typically use brokers as a route to acquire borrowers, the financial adviser market has been harder to crack, with many advisers still hesitant to recommend P2P to their clients.

Only Octopus Choice has an established network of advisers, while others have more informal relationships.

But Smee predicted the introduction of appropriateness tests from December 2019 could help boost confidence among advisers about the P2P sector.

“The appropriateness tests provide a good opportunity to talk about risks and reward,” he said.

“It should help advisers feel more confident and provide another line of defence for those who may be nervous about recommending P2P.”

Read more: P2PFA members lent out £9.5bn with unexplained absence of MarketInvoice

From 9 December 2019, P2P platforms will need to carry out an appropriateness assessment that considers a client’s knowledge and experience of the sector before the platform can accept the  investment.

Smee said the P2PFA would help members develop their tests but warned against a standardised approach.

“There would be different processes for different firms so many would need something more bespoke,” he said.

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This story first appeared in the print issue of Peer2Peer Finance News, which can be read in full here.