Alternative finance: how safe is your money?

Sam Hodges compares the protection available to investors from P2P investment platforms' contingency funds with that provided by the Financial Services Compensation Scheme (FSCS) for more conventional investments.

As somebody who is investing their money into another person or another person's business it is no surprise that you will want some assurances when it comes to protecting your money. This is something the platforms know is important and is why many have provision/protection/reserve funds set up.

A provision fund is a pool of money that is kept aside in case of a borrower default. If a default occurs, the pool of money may help pay back money that has been lost.

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Sam Hodges writes for AltFi.com