Alternative finance: buyers beware

A series of unfortunate developments has reminded investors that investing in P2P lending and crowdfunding is not for the faint hearted, says David C Stevenson.

All good things must come to an end. For the last few years the fast growing world of alternative finance has been enjoying something of a honeymoon, where nothing could go wrong and opportunity was boundless. Unfortunately in the last few weeks a series of unfortunate developments has reminded investors that investing in P2P lending and crowdfunding is not for the faint hearted.

I still think the potential for intelligent investors to make decent returns is very real, but we all need to learn some brutal lessons after a string of unfortunate events featuring green pioneers, inevitable crowdfunding failures and a Nordic p2p lending platform called Trustbuddy.

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
David C. Stevenson
Contributor

David Stevenson has been writing the Financial Times Adventurous Investor column for nearly 15 years and is also a regular columnist for Citywire. He writes his own widely read Adventurous Investor SubStack newsletter at davidstevenson.substack.com

David has also had a successful career as a media entrepreneur setting up the big European fintech news and event outfit www.altfi.com as well as www.etfstream.com in the asset management space. 

Before that, he was a founding partner in the Rocket Science Group, a successful corporate comms business. 

David has also written a number of books on investing, funds, ETFs, and stock picking and is currently a non-executive director on a number of stockmarket-listed funds including Gresham House Energy Storage and the Aurora Investment Trust. 

In what remains of his spare time he is a presiding justice on the Southampton magistrates bench.