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Will wealth management and the alternative finance industry start to meet in the middle?

The independent financial advisor (IFA) may not be fully acquainted with alternative financing online, but P2P lending is growing. Last year in the UK, online alternative financing swelled to £3.2bn, growing 84 per cent from the year before. Additionally, alternative finance lending comprised about 14 per cent of new lending to small businesses.

Will wealth management and the alternative finance industry start to meet in the middle

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Peer-to-peer lending, which is sometimes shortened to P2P lending, comprises lending money to businesses or individuals online via services that directly match borrower and lenders.

Getting more IFAs onboard

Money from institutions has supported the P2P movement, but financial advisors have shown some reluctance. It appears that they may need more practical guidance from key industry players.

Of course, software for IFAs will play a vital role in helping them to enable clients to consider P2P lending. As interest rates continue to be depressed, P2P could become more attractive. The BBC reported that P2P could happen within an ISA-type tax shelter, giving savers an opportunity to get greater returns.

Keeping up with new trends

It makes sense for IFAs to be fully aware of what P2P entails. The UK manages some $1.6 trillion in financial assets and is thought to be the second-biggest operator in the world for managing wealth. IFAs need to be seen as offering a full range of wealth management services to their clients.

Offering the best tools

If IFAs became more enthusiastic about P2P and engaged more client funds, it would give them a huge boost. In any case, P2P doesn’t look like it is going away, and informed clients will at least expect to have the P2P conversation.

In the future, enabling P2P lending could become a natural part of wealth management. This could mean they need to turn to a company such as https://www.intelliflo.com/client-management to get the most efficient and professional software tools.

The world of lending is changing. In the US, P2P has become big business – so big that it is no longer known as “marketplace” lending. Some industry analysts think this could happen in the UK, as diversification into “funds” of this type can benefit clients. The industry is still looking for reliable tools to analyse lending platforms, and more development in this area will aid growth.

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