Is it wise for investors to sidestep the banks?

Cutting out the banks and lending your money to borrowers directly can earn your cash high rates of return. But how risky is it? Tim Bennett explains.

Fancy getting an inflation-beating return, while robbing the banks of your business in the process? Peer-to-peer (P2P) lenders promise to cut out the middlemen the banks by matching willing borrowers to potential lenders directly. Sounds good, but what are the risks, and is it right for you?

The new kid on the block

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Tim graduated with a history degree from Cambridge University in 1989 and, after a year of travelling, joined the financial services firm Ernst and Young in 1990, qualifying as a chartered accountant in 1994.

He then moved into financial markets training, designing and running a variety of courses at graduate level and beyond for a range of organisations including the Securities and Investment Institute and UBS. He joined MoneyWeek in 2007.