Firing line  

‘There is no magic bullet, people will get P2P over time’

Mr Lehrain says: “One of the recommendations is a tick box to confirm you are not investing more than 10 per cent – but it is just a tick box. Anybody could say it, but it does not stop them from being exposed.

“Unless they are providing a full picture of their overall finances, how would [we] know if that is the right number or not?” he questions, highlighting that clients do not need to give P2P lenders a full picture of their transactions, as P2P platforms are not advisers.

When reflecting on his past career and coping with other market downturns, Mr Lehrain concedes he has regrets about the conditions under which he had to sell the tax practice Grimston Scott.

The bulk of Grimston Scott’s business back then came from members of Lloyd’s, so the dramatic downturn in the early 1990s hit the business hard and saw the tax consultancy where Mr Lehrain was managing director disposed of as a fire sale.

He says: “Grimston Scott ran really well for nine years, but in 1992 the Lloyds market collapsed. The primary market for my business just stopped, so I had to sell Grimston Scott in non-ideal circumstances.”

But Mr Lehrain is optimistic of what the future holds for P2P.

He acknowledges there is “a fear and lack of understanding” around the P2P sector, but he does not think investing in a huge education programme for financial advisers to better grasp these types of loans is the solution.  

Instead, he says Relendex is currently is conversation with Adviser Home – a group that helps more than 12,000 IFAs run, develop and market their business – about the future role that IFAs can play in the P2P market.

“Much larger companies can maybe invest in a huge education programme, but then returns may be affected,” he points out.

“The whole point of [P2P] is that it is cutting out the middleman, not putting the cost back in the middle, even if it is a slightly different format,” he says. 

“There is no magic bullet. People will get P2P over time.”

Saloni Sardana is features writer at FTAdviser and Financial Adviser