Portfolio split

I also recall the article, at the time the 5% struck me a being very low, but the the memory serves the 'Expert' was some what anti Crowdfunding due to the current lack of regulation and to my reading an apparent lack of understanding of the types of Crowdfunding in general and the different models of P2P/P2B lending in particular.

To a great degree it is down to your personal views on risk and return and it is an ongoing debate between myself and a colleague. He won't invest in P2P/P2B lending due to the lack of regulation and his perceived risk but he is prepared to invest in equities in emerging markets because that's where pundits say you should be putting your money to get the best return, whilst I wouldn't want to invest in emerging markets having had first hand experience of the way some of the countries operate, and am far more comfortable investing in P2P/P2B.   

Personally I have about 12% in P2P/P2B and am looking to increase it to 25%-30%. However those funds are spread across several platforms, within the platforms across a multitude of loans thus spreading my risks and investments in loans can range from 2 to 4 figure sums depending on the levels of security available against the loan and my view of the risks.

One key thing that I would recommend is toe dipping, i.e. deposit a small some in a platform, invest it and get an understanding of the platform and the way it operates. From there you can settle on the platforms you like and suit your risk profile and start making larger investments. 

You've received some sound advice from forum members. I may stick my tiny toe into a newer P2P/P2B but come April then FCA will IMO be a 'shake up' time for the industry. Whilst lenders/investors funds will not be covered by the FSCS the member companies of the FCA will be required to adhere to set standards. This requirement may be easier said than done as the one big hurdle member companies will need is PI insurance and that is not an insignificant cost. By way of example, many smaller solicitor firms have been required to close or at least merge as they  simply could not afford the premiums for this year.

So whilst having PI insurance may not be the be all and end all it certainly will be a determining factor in deciding the commitment of several P2P/P2B companies currently out there. Before making any decisions I'd invest plenty of time in reading round the forum of numerous poster experiences as these are folks that are actively lending/investing.

Do not ignore Zopa, despite their lower rates and lively comments on the Forum they offer a sound platform to provide a savings spread.

My view of the current controversies aired on the forum is that having been the first UK P2P they are having to change the way the business works both to meet regulatory requirements, but also to provide a springboard for growth. Despite the rapid growth over the last few years the major businesses must be looking to grow several times over to start to offer a real alternative to the Banks (and to make decent profit). Zopa also has a fairly priced facility to cash in your savings, although costs may increase if rates rise.

As to the future of interest rates - there has been some tightening of the rates offered for fixed rate mortgages so 5 yr savings may have hit rock bottom, this makes RS  Monthly access, and Wellesley Monthly and 6 monthly offerings look attractive as 'wait and see' options.

Interesting discussion.

I have about 75% in equities (mainly index trackers), 20% in bonds, NS&I Certs and cash and about 5% in P2P.

Looking to decrease exposure to equities over the next 12 months and increase P2P to about 10-15%.

True, but you'll also get years (like the last one) when the index will go up by 30-40% in a single year.

However it's the long term I'm interested in and I'm as confident as I can be that equities will on average give a real return of 3-4% a year. For the rationale behind that I'd suggest reading Smarter Investing by Tim Hale.

Will P2P give a similar return over the long term? Possibly, but it's certainly not proven.

I hold several equity income Investment Trust shares which I mainly bought 20 years ago.   Their internal rate of return is just over 10% per annum.   I doubt this will be repeated over the next 20 years though.   I also hold shares in one FT100 company with an IRR of just under 15%, not very sensible I know, but I am reluctant to sell and trigger a large CGT liability and I do have confidence in the direction in which the company is going.