400m ‘mass affluent’ investors need better access to alternative investments
Hundreds of millions of investors would benefit from better access to alternative investments such as peer-to-peer property platforms, according to Jatin Ondhia (pictured), chief executive and founder of Shojin Property Partners.
Speaking at the P2P Investing Summit, a virtual event hosted by Peer2Peer Finance News and AngelNews, Ondhia pointed out that there are 400m investors worldwide who could be described as ‘mass affluent’. These are people who can afford to invest, yet typically do not hold alternative investments due to misconceptions about risk.
“A lot of the one per cent make their money through alternative investments – real estate being the biggest one of those,” said Ondhia.
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“A lot of the mass affluent lack access to those investments. They don’t have the skills and experience to invest in alternative investments.”
He pointed out that alternative investments can be defined as being non-mainstream, not listed on exchanges, and with limited liquidity. However, he urged investors to choose regulated companies, and to do their due diligence on the management team to ensure that they have a strong financial background.
“Working with respected teams is crucial,” he said.
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“But the most important thing it to diversify your investments. People shouldn’t feel under pressure to only invest in one project.”
Ondhia said that a lot of wealth managers put their client money only in mainstream products, ignoring the alternative market.
“I think they’re doing a disservice to their clients,” he added. “Because their clients need to know about what opportunities are out there and they need to have the option of allocating a certain amount of capital into the higher risk categories.
“There will be higher risk but the returns will be disproportionately higher.”
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