MEMBERS of the Personal Finance Society (PFS) have been showing an increased interest in peer-to-peer lending, leading the PFS to produce its own ‘good practice’ guide to P2P.
The financial planning trade body has partnered with Octopus Investments to create the guide, which tells advisers that recommending P2P products could help them to increase their own assets under management, adding that “for suitable clients, it could prove a useful vehicle for excess cash holdings which may currently fall outside of the adviser’s view.”
It also lists some ways in which the customers of these advisers may use P2P. These include: clients who are nearing retirement and wish to reduce their exposure to equities; landlords looking for an alternative way to make a yield, or a vehicle they can put money into before making their next real estate investment; companies looking to boost returns on their excess balance sheet capital, to which they don’t require instant access; and self-employed clients with limited companies looking for a way to get excess cash in their business working harder.
Read more: A quick guide to IFISA transfers
“As the P2P market continues to grow, it is vital that advisers and their clients understand these products,” said Keith Richards, chief executive of the PFS.
“We recommend advisers read the PFS’s good practice guide to make sure they understand the different providers and products in this market and how to identify suitable options for their clients.”