We love hearing more about our lenders, their stories and what attracted them to invest in peer to peer lending. In this Q&A session we caught up with Steve, a former UK Sales & Marketing Director for a global FMCG manufacturer, who now runs and owns an investment and consulting business. Married with teenage children, we asked Steve more about his experiences with peer to peer lending and how important investments are to him.
What first attracted you to invest in peer-to-peer lending?
The opportunity to generate yields that are significantly greater than those available through FSCS-protected deposit accounts, whilst managing the risk through diversification and choice of asset security.
How long have you been investing in peer-to-peer?
For around 18 months.
How important are investments to you in the current stage of your life?
Very important. Our investment portfolio needs to support us in my dotage!
What financial goals are you looking to achieve from your investment?
I have a widely diversified portfolio of stocks and managed funds (held in ISA / SIPP tax wrappers) and a portfolio of peer to peer loans across several lending platforms. Overall I’m looking to maximise total return over a 10+ year horizon whilst managing and mitigating risk of capital loss in the meantime.
How do you find peer-to-peer investing versus more traditional savings?
Unlike deposit accounts, peer to peer lending via most platforms (especially those at the upper end of the risk / return curve) requires active monitoring and management in order to take advantage of new loan opportunities and diversify / exit existing holdings as required. Landbay is an exception in this regard and I pretty much treat Landbay as I would treat a bank deposit account.
When choosing a peer-to-peer platform to lend on, what are the important things that you look for?
A good balance between risk and return, solid asset-backed security, good secondary market liquidity (so that I can reduce or exit my loans when I want to) and reliable, robust administration and communication.
Why did you choose to invest with Landbay?
Landbay is, by some distance, the lowest risk of my P2P investments and I’m happy to accept a lower rate of return as a result. The 3.5% BBR tracker rate compares very favourably with the 30 day lending products offered by Ratesetter and Wellesley, requiring little or no ongoing management on my part and I’ve always found Landbay very simple to deal with. The fact that I can be confident of accessing my funds within 2 to 3 days if needed, without penalty, is a big part of the equation.