Is crowdfunding the best way to access start-up investments?
With crowdfunding due to come under FCA regulation from next April, should advisers be considering the concept as a way of directly accessing higher risk start-up investments?
The FCA is taking over the regulation of the sector from the Office of Fair Trading and is currently consulting on how crowdfunding should be treated.
Crowdfunding offers a way for people, organisations and businesses (including business start-ups) to try and raise money through online portals to finance or re-finance their activities and enterprises. Chair of the UK Crowdfunding Association Julia Groves estimates the UK crowdfunding market to be around £1bn in size, with an estimated growth of 10-20 per cent month-on-month.
The FCA has already stated that it believes crowdfunding is more suited to sophisticated investors and that retail investors should not invest more than 10 per cent of their portfolio without getting advice.