The alternative finance industry needs to do much more to reach out to advisers, according to research conducted by Intelligent Partnership (IP).
Although 73% of the alternative finance providers IP surveyed stated that they were either already marketing to financial advisers, or planned to do so in the future, the vast majority of advisers were still unaware of key industry developments. Only 7% of advisers surveyed realised that alternative finance is now regulated by the FCA, and only 13% were aware that some platforms used contingency funds to protect investors from losses.
Guy Tolhurst, managing director of Intelligent Partnership, said: “When we asked platforms what they thought the biggest barriers that prevent advisers from investing in the sector were, the vast majority said that it was a lack of education and awareness – so the alternative finance industry knows that they have to do much more to successfully reach out to the adviser community.”
According to the Future Trends in UK Banking, a report commissioned by Fiserv and compiled by the Centre for Economics and Business Research (Cebr), alternative finance could be worth £12.3 billion a year by 2020.
John Goodall of peer to peer lender Landbay added: “Peer-to-peer lending has become an innovative and accepted alternative to traditional savings and investment products. Very soon it will cease to be viewed as alternative finance, but instead viewed as mainstream.”