Tag: investment

ArchOver launches Investment Plan

Author
Angus Dent
Date

ArchOver launches Investment Plan

Automated spread investment will help both private and professionals make the most of P2P loans

London, UK – 08 October 2018 – ArchOver, the peer-to-peer (P2P) business lending platform, is expanding its offering with the launch of an automated portfolio investment option on loans for SMEs.

The ArchOver Investment Plan has an annual target rate of up to 6.4%. It will accept pledges from £250, improving accessibility for retail investors.

“Peer-to-peer was established to democratise finance”, commented Angus Dent, CEO. “We knew there was demand from potential investors who could benefit from our model, but didn’t necessarily want to lend borrower-project-by-borrower-project, including investment houses that require a more diversified portfolio with cross-sector exposure. Institutions using the service will now be able to let ArchOver administer their portfolio for the first time.”

“We also wanted to provide a portfolio lending strategy for private investors. With the entry point at £250, our platform will now be accessible to an even wider group of people.”

Each Investment Plan will be spread over a minimum of ten secured investment projects on the platform, with no more than 10% of the portfolio being exposed to any one Borrower. The loans will benefit from ArchOver’s full range of security measures, including controlled accounts, credit insurance (where applicable), dispute resolution and an all-assets charge with Companies House.

As a result of the spread investment, investors’ exposure to risk is low, but they still benefit from ArchOver’s high rate of return and top-quality Borrowers, making the service a strong choice for individuals and institutions alike.

The new service comes amid a period of sustained growth for ArchOver, which recently launched its IFISA and achieved over £80 million in total funding facilitated, as well as expanding its leadership team to support further business growth.

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Seven in 10 savers want strong ROI but majority fooled by low-return ‘safe’ options  

Author
Angus Dent
Date

Majority of UK savers risk losing money in real terms, warns ArchOver.

According to a study by peer-to-peer (P2P) business lending platform ArchOver, UK savers are seeing their hard-earned cash depreciate at the hands of high inflation and low interest, despite 71% claiming that interest and ROI are top-of-mind.

The Next Gen: Investors and Savers report explores consumer attitudes towards risk and investment. The survey of 2,000 UK adults revealed that two thirds (67%) would call themselves ‘savers’ rather than ‘investors’, preferring a cautious approach to money and putting aside £191 a month on average.

Most are saving for a specific reason, like the reassurance of having a ‘rainy day fund’ (66%), financing a new car or a holiday (29%) or paying for retirement (27%). But in a high-inflation, low-interest economy, those goals will stay out of reach if savers leave their cash languishing in savings. They must find other avenues to make their cash work harder at the same time.

“People like to go with the status quo, and they’re attracted by the protection you get with traditional savings accounts,” said Angus Dent, CEO of ArchOver. “However, leaving your money lying around in a savings account for years on end is not going to help people reach their goals in the long-term. In reality, savers need to diversify their portfolios and look for alternative ways of making their money grow that balance security and opportunity.”

More than half (57%) of savers still associate savings with “security” and the majority (83%) are relying on traditional savings accounts to help them build their nest eggs, followed by ISAs (43%) and pension funds (33%). They show a preference for services where there is a level of financial protection, even if it comes with a minimal level of interest. As a result, their return over a period of years could end up being negative in real terms as inflation continues to outstrip interest.

A cautious mindset is also dominating people’s financial decisions. If they inherited a large sum of money, the majority (46%) would deposit it into a savings account and three in 10 (30%) would put it in an ISA. Less than one in 10 (9%) would consider using a large sum of money to invest in stocks and shares. Meanwhile, only 4% are currently using peer-to-peer (P2P) lending or crowdfunding, despite typical annual returns of 7-8%.

“Savers like knowing that the service they are saving into is fully regulated. Many take comfort in knowing their money is protected by official bodies and that they’ll be contacted if there’s a significant risk to their cash,” added Dent. “But that cautiousness is at odds with what savers claim to be thinking about, which is seeing their money grow. If savers are to achieve their goals, there needs to be more education available on the options that could help them achieve higher returns with a relatively low amount of risk. That means helping them better understand how to identify which services are being transparent about potential risk factors, prioritise security and allow savers to control how their money is being used.”

 

 

Fashionable Revolutions

Author
Angus Dent
Date

Revolutions often involve a degree of fashion. One minute they capture the imagination and are all the rage, the next they old-hat and face apathy or even outright derision. It feels a bit like that with the P2P sector which, having been once the darling of the financial market place, is now viewed with grave suspicion – especially by the massed ranks of the media, which helped to put the whole alternative finance movement on a pedestal in the first place. ‘Hero to zero’ is an understatement.

There are other examples, of course, as in the New Towns which came into being after World War Two by way of the New Towns Act 1946. The first wave saw towns like Stevenage, Crawley and Basildon spring up; the second saw Telford, Redditch and Runcorn; and the third, fifty years ago, ushered in Milton Keynes, Peterborough and Northampton.

While it is undeniable that some of these towns have been on the receiving end of a joke or two over the years, few can argue with the fact that, in many respects, they have been a success. They have been so because they filled a gap in the national fabric that existed because of the circumstances of the time; i.e. much of the UK had been flattened and there was a desperate shortage of housing.

And so it has been with P2P. The sector exists because there was a gaping hole in the financial marketplace left by the banks, which were, and still are, abandoning small businesses in order to rebuild their balance sheets. That the process remains ongoing can be seen from the latest round of bank results out this week.

SMEs are turning to P2P in increasing numbers because that is where they are more likely to be treated as customers. And the same can be said for people with money who are considering P2P loans because that is the only way they are going to secure a reasonable return on their cash, albeit with an element of risk.

Fashions come and go and sometimes they even come back into favour. New Towns are currently back on the agenda and for the same reason they were created at the outset – they fulfil the requirement of providing more and better housing for all. Maybe it will be the same for P2P when commentators, politicians and regulators finally accept that this is what the public wants. My only hope is that it won’t take half a century for the hands on the clock to turn full circle.