Regulator warns against peer-to-peer investment ISAs

P2P industry not happy about FCA comments, see here

Think of the number of complaints that have been made to the financial ombudsman about p2p investments, just from members of this forum. While some complaints have clear merit, what the regulator sees most clearly is "these investments aren't for all investors" and communicate accordingly.

Yes but p2p lenders have not yet gone through a recession. We dont yet know what effect a bad economy will have on p2p lending. And right now we have far too many p2p lenders most of these will not survive a prolonged recession.

Investors being steered away from P2P makes it tougher for platforms to fill loans and make money.

That in turn increases the risks of platforms folding which won't do investors any favours as anyone with money tied up in Collateral will tell you.

I've just had a repayment in full from a completed FS development project (yes it does happen) but rather than getting ready to plough funds into a new ISA the money has been used to part repay my mortgage.

I still have platforms that I like and self-select loans that I'm pleased to hold - but in these uncertain times I'm taking things more cautiously.

I also wasn't too keen on being told that I might be sued personally for £14 million because I lent someone a pound. While that case might be exceptional and it seems the platform concerned has thrown their best lawyers onto the case and closed the door on such a fanciful claim it's all extra worry that I don't need.

Whether the regulator issuing warnings is good or bad for investors overall it's hard to say - but they've already too late to wake up to this corner of the financial services and I've already submitted my claim for eventual compensation as a result of their incompetence in stating on their official Register that Collateral were authorised when they weren't.