A professor who lost money in both the Lendy and London Capital & Finance (LCF) collapses is using her experience to launch a study that will analyse trust in financial services.
Renata Kosova, associate professor of economics at Imperial College’s Business School, is seeking other investors who have lost money as part of a research piece analysing the consequences for the wider economy.
The research focuses on three major failures: LCF, Lendy and the Woodford Equity Income Fund.
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“These cases involved a lot of investors in terms of the numbers and money,” Kosova said.
“Investors were motivated to invest the money to get a return and grow the economy.
“Previous research has focused on trust in banks after the financial crisis but it has never looked at the victims.
“We are focusing on the victims, how it affects investor trust and to what extent is it recoverable as well as whether people would be willing to invest the money again.”
The research will also look at whether people who were not directly impacted by the collapses would invest based on news reports of the events, to contrast direct and indirect experiences.
“It has huge consequences for the economy, as if people lose trust then there is less investment and fewer funding sources for businesses,” she added.
“We as academics have high reach and can share our results with the media and pressure government and policymakers with our findings.”
Kosova has also admitted she would be more wary about where she invests in the future.
“I would now invest only where I specifically know it is directly protected by the Financial Services Compensation Scheme and written clearly on the documents,” she said.
“I have learned a lot of lessons.”
Affected investors or those who would like to respond can complete the Imperial College survey until the end of March.
The survey can be accessed at https://imperial.eu.qualtrics.com/jfe/form/SV_2nMdo59J6OL6mtE.