LFP111 – The Role and Purpose of P2P Aggregators with Iain Niblock CEO Orca

Using “P2P loosely there are over fifty to invest in, all with different standards and approaches. It’s a “fragmented and complex” market. Professionals do much due diligence before investing. How is an individual investor to cope? One strong contender for The Answer is “Aggregators” who do the due diligence, sign you up with said platforms and offer model portfolios

Iain Niblock co-founder and CEO joins us today to lay out the problems and challenges of investing in “P2P” which in practice covers many approaches in a diverse landscape.

Orca are also a rare example of a well-regional Fintech being based in Northern Ireland with an office in Edinburgh.

Topics discussed on the show include: 

  • FS marketing and Scottish accents – The myth of the ‘trustworthy’ Scottish accent
  • Scottish referendum and Brexit referendum compared in terms of how well done and impact; social divisiveness of contentious referenda; referendum fatigue
  • Iain’s career journey overseas Holland through cycling from Columbia to Canada – “Mexico is is actually really big”
  • How Orca ended up being based in Belfast and then later with an office in Edinburgh
  • an analysis of the pros and cons of being a regional Fintech
  • Belfast has even been classified as “semi-offshore” re development; the use of Belfast by the Big 4
  • the problem that Orca solve is that for many retail investors there are just too many options, too much complexity in P2P for them to know where to start re building a proper portfolio (as opposed to putting a toe in the water with one of the largest platforms)
  • Over 50 P2Ps in the UK (from 150 four years ago)
  • the various evolved structures that are not strictly P2P but nevertheless conduit “P2P-type” loan risk to individuals
  • simple rules of thumb on how to invest in P2P become less useful as the market gets more efficiently priced
  • the challenge of doing proper due diligence; Orca’s years long experience with these challenges
  • £8 pay per click from Google on search word “P2P”
  • Funding Circle’s approach to being Number One from the early days
  • regulation re FCA consultation paper – especially marketing restrictions to “take the P out of P2P” :-O
  • over-regulation of P2P is driving platforms to different business models which are less regulated
  • best models of Aggregator – in the US NSR Invest ($250m) and in Latvia Mintos (>$1bn)
  • in UK various approaches eg funds, bonds
  • platforms being slow providing API access to Aggregators which is holding the market back (how rapidly new innovators become sleepy incumbents eh?)
  • investment trusts eg P2PGI – but the problem there of discounts to NAV (as well as layers of fees)
  • “off market” versus “on market” criteria for solving the access challenge
  • Orca integrate with five platforms at present – consumer, business, property loans
  • funds are directly in the clients name invested in the P2P platforms – Orca is an administrator not a holder of the funds – the deliberate choice not to be an intermediator
  • Orca are looking at adding another eleven platforms and another ten on the radar horizon
  • hundreds of potential loan providers but the aim is to choose good quality platforms
  • the problem with investing in the big platforms
  • the importance of a comparison with “good value” in buying wine and investing in P2P
  • Orca’s fees are 0.65% p.a. they aim to reduce this over time
  • how Fintech has moved on since the days of “price for free” and keep raising funds to pay for this to a more stable approach
  • Orca’s growth plans; currently raising funds via Seedrs – you can invest from as little as £10
  • Orca has just come out of the FCA’s innovation sandbox but actually don’t require FCA regulation as their partners who handle funds are all regulated

And much much more 🙂

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