The online investment landscape
Gone are the days where investors have to call up their stockbroker and place an order on the telephone, with the pin striped “Wall Street” environment now a thing of the past. Nowadays the process of investing has altered dramatically, with the introduction of Fintech (financial technology) reimagining this whole sector.
Where many are still under the impression that UK finance is at a point of no return the truth is somewhat different, with the technology age navigating us back to a healthy relationship with money.
According to the ACCA (the Association of Chartered Certified Accountants) the UK is close to the centre of the financial world.
‘Despite the severe impact of the global financial crisis, financial services, and asset management in particular, remain key pillars of the UK economy. In terms of assets under management, the UK is the second largest market in the world after the US’ (Brand, 2013¹).
With much of the nation now incredibly disheartened by the banks, modern alternatives are now looking more attractive than ever.
Fintech is reshaping the finance sector
According to many sources, there have been just a few breakthroughs in banking – the ATM, online banking and now Fintech. Fintech refers to a company that uses superior technology to bring newer and better financial products to consumers, an alternative platform that has of late reigned supreme.
Here are a number of examples that are reshaping the investment world and flying the Fintech flag for new age investment practices in the UK:
Permitting people to invest in start-up companies, Funding Circle has raised £1,174,618,720 in investment to-date, a company at the forefront of the Fintech movement. According to the Financial Times:
‘The UK’s alternative finance industry has taken another step along the road to mainstream acceptance with the promise of a £40m investment from the British government. Funding Circle, one of the UK’s largest peer-to-peer platforms, will use the money to provide more loans to small and medium-sized businesses over the next year’ (Moore, 2014²).
With a website slogan that reads ‘Equity crowdfunding done properly’ Seedrs aims to offer a no-fuss approach for investors to back businesses they believe in, helping start-ups gain quick funding through their online portal.
As another property investment channel, LendInvest has raised £559,594,522 through their site (according to website copy on LendInvest.co.uk), permitting users to invest as little as £100 in a property deal. Focused primarily on London, LendInvest aims to invest money into the city through alternative means, a business that has gained an incredible amount of press coverage, with the Financial Times Journalist, Moore, commenting:
‘LendInvest marks a dramatic shift in the sorts of funding through peer-to-peer websites’ (Moore, 2014)³
Aiming to enable anyone to invest in start-up, early stage and growth businesses ‘through equity, debt and investment fund options’, CrowdCube is another example of a shift in the way people invest and raise funds, seeing the risk of such investments shared across a crowd of funders. Boasting 265,502 active users CrowdCube is certainly worth a look into.
Property Partner is leading the way in real estate equity crowdfunding, having recently raised £12.9m in a funding round led by Octopus Ventures. This takes the total amount invested in the company to over £15m (propertypartner.co) 4
This is confirmed by the Business Insider:
‘Property Partner, a crowdfunding platform that lets people buy a small slice of a rental property for as little as £50 ($70.76 ), has raised £15.9 million ($22.5 million) in equity and debt to fuel growth and launch new products.’ (Williams-Grut, 20165).
The company now have the money and the manpower to make history in this field, especially with regards to London property investment.
TransferWise is a UK-based peer-to-per money transfer service launched in January 2011; another company that is proving the traditional banking system to be pretty dated. Moving over £500 million every month globally and saving people £22m in hidden charges, TransferWise is continuing to expand; aiming to be the first port of call when looking to make transactions (Transferwise.com)6
Nutmeg is a company that builds and manages intelligent portfolios, ISAs and Pensions, helping investors make well-informed financial decisions. Only charging a single management fee, Nutmeg offers its customers the chance to make money devoid of the banks’ input.
eToro is a social trading and multi asset brokerage with registered offices in Cyprus, Israel and the United Kingdom. Permitting users to trade and invest Stocks, ETFs, Currencies, Indices and Commodities (CFDs) the company claims that ‘Investing in the world’s most popular markets has never been easier.’
Where ShareProperty fits in
With the aim of providing investors with easy and affordable access to a managed portfolio of property deals, ShareProperty offers a unique service. Led by an inspirational management team, we aim to create a UK property investment hub, offering everything from market analysis, investment offerings and interactive discussion forums.
Sign up today and be the first to receive updates, industry news and access to the latest investment opportunities.
**Please note that investing in early stage businesses involves risks, including loss of capital, illiquidity (the inability to sell assets quickly or without substantial loss in value) and lack of dividends and should only be done as part of a diversified portfolio. Your capital is at risk if you invest.
- Brand, H. (2013) ‘Understanding investors: The changing landscape’ – http://www.accaglobal.com/content/dam/acca/global/PDF-technical/financial-reporting/pol-afb-ui01.pdf.
- Moore, E. (2014) ‘Funding Circle gets £40m from UK government’ – (http://www.ft.com/cms/s/0/75225934-9a29-11e3-a407-00144feab7de.html#axzz44qhOec9W)
- Moore, E. (2014) ‘London developer takes on largest P2P loan’. Available at: http://www.ft.com/cms/s/0/0c8587a8-835d-11e3-aa65-00144feab7de.html#axzz46vLzXOH3Propertypartnetr.co (2016) Available at: https://resources.propertypartner.co/thanks-to-you-weve-secured-a-15-9m-funding-round-to-grow-property-partner/
- Williams-Grut, O. (2016) ‘House crowdfunding platform Property Partner just raised £16 million’ (http://uk.businessinsider.com/property-partner-16-million-series-b-proptech-2016-3).
- Transferwise.com (2016) Available at: (https://transferwise.com/)