Advisers given year to opt out of P2P permission

Advisers given year to opt out of P2P permission

Advisers have a year to decide whether they want to opt out of providing advice on peer-to-peer lending agreements, the Financial Conduct Authority has said.

As of last week all financial advisers with permission to advise on investments have also been given permission to advise on P2P agreements.

The regulator has contacted these firms to inform them of the change and to let them know of the deadlines for opting-out of this permission.

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The announcement coincided with the introduction of the Innovative Finance Isa, which allows P2P agreements to be included within an Isa tax wrapper.

A spokesman for the FCA said a simplified way of opting out will be available on the regulator’s website until 6 October, but advisers can opt out until the beginning of the next financial year.

There will be no fee implications for this added permission until the 2017/18 financial year.

“There is no cost if a firm wishes to remove this activity.”

The spokesman added that advisers who are concerned about how the new permissions might impact their PI insurance should speak to their provider.

In February, the FCA said advisers would not be able to charge commission on P2P lending agreements.

Last month, concerns were raised that advisers would be unable to comply with the FCA’s requirements on P2P due diligence. This was because of the difficulty in being able to measure risks associated with P2P agreements.

Adviser view

Jason Witcombe, director of London-based Evolve Financial Planning, said: “We will be treading very carefully with P2P. The more something is marketed as an alternative to deposits, which I think P2P is often marketed as, consumers may well think it is the same thing, which it is not.

“The effect on our PI insurance will have a big role in our decision.”