FCA Warns Retail Investors About P2P Lending in Annual Report

The Financial Conduct Authority (FCA) has released their annual Sector Views report; it warned of high-risk retail investments, calling out the peer to peer lending sector; the FCA noted that the wind-down of failing platforms can cause losses which has resulted in the FCA beginning enforcement actions; the report states, “If P2P firms cannot achieve an effective run-off or transfer of business, consumers could suffer significant harm. This is particularly the case if they have invested in more speculative or illiquid asset classes such as funding property development…In a worst-case scenario, consumers who have lent to P2P firms may have to seek repayment directly from the end borrowers themselves.”; Peer2Peer Finance News pulls out other interesting takes from the report including that low interest rates have driven investors to take on more risk in the desire for higher yields. P2P Finance News