One in four investors (25 per cent) plan on using an alternative finance product, including peer-to-peer loans and bridging finance, in 2021, research has found.
In a survey of 975 UK investors who have investment portfolios valued at £10,000 and above, bridging lender Market Financial Solutions (MFS) found that a third have engaged with an alternative finance provider in the past 12 months.
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However, a significant majority (61 per cent) of investors said that they lack sufficient knowledge of alternative finance products to consider using them.
MFS’ research also revealed that 25 per cent of investors rely on brokers when sourcing the right financial products and this rises to 43 per cent for those aged between 18 and 35.
“Demand for alternative finance seems to be rising as a consequence of the pandemic,” said Paresh Raja, chief executive of MFS.
“With mainstream providers limiting their products and services to reduce their risk exposure, investors are being encouraged to consider alternative options.
“However, there still exists a significant knowledge gap when it comes to the general awareness of alternative finance products and how they can be used as part of a broader financial strategy.
“To address this knowledge gap, investors need to do their research and also engage with brokers who have a comprehensive understanding of the mainstream and alternative finance markets.”