Jordan Stodart, co-founder of Orca, felt that there was currently little appetite from financial advisers and brokers to use peer-to-peer for their clients’ portfolios, which has resulted in platforms continuing to focus on their self-directed retail audience.
 
“For the retail investor, however, brokerages could prove to be an intermediary that alleviates time and provides real value for money.
 
“We at Orca expect to see more brokers operating in this space as, ultimately, the retail investor is still very much driving this market – over £2bn invested across P2P platforms in the first half 2017.”

Jordan added that there was currently a chicken-and-egg situation.

“Speaking on the investment side, most brokers and IFAs are not interested in P2P as there's a lack of awareness and education around the riskiness of the asset class.
 
“Also, platforms don’t, for the most part, facilitate them.”

Are broker relationships essential for peer-to-peer platforms?

 Broker relationships with peer-to-peer platforms deemed “vital”

Greg Carter, CEO of Growth Street, felt it was vital that platforms built a strong relationship with brokers and has recently launched a dedicated broker team.

Assetz Capital also plans to boost its broker relations as Stuart Law, CEO of the peer-to-peer platform, felt brokers were an integral part of the P2P industry’s success.

“As more brokers learn about the opportunities P2P offers them and their clients, the number of brokers offering P2P as part of their portfolio will increase.”

Paul Marston, managing director of commercial finance at RateSetter, believed many small businesses used brokers as their first point of call.

“…Especially following the banks’ reductions in numbers of business relationship managers.

“Therefore, brokers are uniquely placed to help raise awareness of peer-to-peer finance and encourage greater understanding among business owners of its features.”

How can peer-to-peer platforms appeal to more brokers?

Jordan felt that P2P platforms that were working with support services which were engaging and educational would be the first port of call.

•   P2P platform funds development loan in under three hours
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“Centralised research services that cover the whole P2P market will be key to opening up this asset class to the wider wealth management sphere.”

He also felt that P2P as an industry needed to dispel the many myths that surround the asset class and promote it as the attractive alternative investment that it was.

“Brokers’ ears will prick up when they hear of the merits of P2P, but unless there’s solid research services to back it up and an easy way for them to access the asset class, it won’t be easy to bridge this divide.

“Fundamentally, P2P platforms require both lenders and borrowers.

“They must keep the balance of the marketplace and brokers can help facilitate this.”

Greg felt that platforms could attract brokers by focusing on simplicity and accessibility.

 The peer-to-peer market can offer brokers more choice for their clients

“The P2P industry was born in the wake of the financial crisis to give more choice and access to borrowers.

“With a robust regulatory regime now helping to give the sector more stability, P2P platforms now offer an opportunity for brokers to support their clients in investing for growth."

Paul said RateSetter was always looking to attract new brokers and to raise awareness of its proposition through its regional business relationship managers and at events such as the National Association of Commercial Finance Brokers Commercial Finance Expo.

“It’s crucial that we continue to build our track record of delivery, draw attention to the proof points of our offer and clearly articulate what sets us apart.”

Meanwhile, Stuart claimed Assetz Capital’s strategy was to attract more brokers and as well as the face-to-face meetings, networking and events, it had been providing brokers with case studies to outline the work it had done.

“This has given them the reassurance that their deals will be funded, which is difficult to prove for a new company that can't achieve traction with brokers initially – chicken and egg.  

“We have also utilised our nationwide network of local relationship managers to bring more brokers on board and to demonstrate both the opportunities and benefits P2P presents to them.”