Source: Wikimedia Commons
One of the recurring themes of crowdfunding is calls for regulation. Another Crowd believes that overall, the Financial Conduct Authority (FCA) is doing a good job, and the pragmatism, sensitivity and focus of our regulation has a lot to do with why the UK now leads the world in the adoption of crowdfunding and alternative finance.
We were pleased when the FCA resisted calls from an MP to offer stronger investor protections, because it was more important (in our view and the FCA's) to focus investors' minds on the risks they were taking.
Today, we see a call for regulation from inside the industry, from someone we know and trust. Luke Davis is CEO of IW Capital and a co-founder of Money&Co. FT Adviser quotes him extensively, and Money&Co. takes up his call in an article of their own.
We don't intend to disagree. Crowdfunding does need regulation, and investor education too. But it already has regulation, and we think the UK regulator is doing a good job. But that message isn't getting across yo people who would benefit from hearing it - investors, and independent financial advisors (IFAs).
Only 7% of the advisers surveyed realised that the many different moving parts of the alternative finance industry are now regulated.
Research published a month ago highlighted an 'awareness deficit' between peer-to-peer platforms and yje IFA community. Industry professionals whose job it is to give advice to retail investors are so poorly briefed that fewer than one in twelve is even aware that peer-to-peer products are already regulated. Ryan Weeks, in Alt-Fi news, called this an 'endemic lack of awareness'.
We invite you to look at the comments underneath Luke Davis' interview in FTAdviser. Not one shows any awareness of the regulatory framework that has been in place since April 2014. This makes us sad, but also angry.
We'd like to propose a protocol for people in our industry that would raise the level of debate, and the level of education of people who read our articles. By all means take sides. But if you want more regulation, or less, or any kind of change, please pat your readers the courtesy of examplining the current situation, what the problem is, and how the change you are proposing would improve matters - and for who, of course.
We are working in a new industry, that is eveolving rapidly, and the more we can do to combat general ifnorance, the better it will be for everyone.