前金融服务管理局主席Lord Adair Tuner最近加入了关于众筹行业未来前景的辩论，并解释了为什么“老一套”应该远离这个部门。
Crowdfunding and peer-to-peer are slowly becoming part of everyday personal finance parlance.
Small businesses and individuals are flocking to the crowd to get projects or enterprises funded.
But now big banks, investment funds and pension companies are trying to get involved in what is being called the 'institutionalisation' of the sector, so it all about to get too corporate?
The UK online alternative finance sector grew by 84 per cent in 2015, facilitating ￡3.2 billion in investments, loans and donations, according to a report from the the Cambridge Centre for Alternative Finance at the University of Cambridge and innovation charity Nesta.
However, this is actually a slower growth rate than in 2014, when lending grew by 161 per cent.
As crowdfunding and peer-to-peer become more established, it is likely to attract attention from mainstream financial providers.
The Cambridge report identifies the ‘institutionalisation’ of the sector.
There are now peer-to-peer investment trusts, as well as banks and pension funds with money invested in the platforms. And the recent Finovate conference in London consisted mainly of 'alt fi' companies pitching their services at banks rather than consumers.
But the risk is that as the sector becomes more mainstream, it may also become less attractive.
It’s like when your parents joined Facebook. The social media platform suddenly became less cool when your mum started liking your posts and sharing your baby pictures.
Facebook has seen a drop off in users in the 16 to 24 age group and has previously warned in a recent annual report that a lack of appeal to the younger generation was a key risk.
The same seems to be happening in crowdfunding and peer-to-peer.
But this isn’t an argument that old people will spoil the broth. Crowdfunding is for all ages and all types of people, that’s the beauty of it.
But with institutions getting involved it no longer has that jazzy alternative tag which in the long run could hit its popularity.
Financial technology conferences used to be full of computer nerds pushing their apps or groundbreaking software to consumers. Now they are pushing it straight to the banks.
The sector has already been placed under stricter regulation for borrowers and investors, which is a good thing, but now we are seeing more premium types of private-equity style crowdfunding aimed at higher net worth individuals with high minimum investments, essentially shutting out the little guy who wants to invest. That all sounds a bit familiar doesn’t it?
If the industry was more weighted towards private equity, would we have seen such successful campaigns for easyProperty, JustPark or BrewDog, all of which value being able to let smaller investors get involved?
Wasn’t that the whole reason crowdfunding emerged, because banks where shutting out the smaller businesses and those with less to invest? But now some of the crowdfunding platforms are effectively shutting out the crowd.
Former Financial Services Authority chairman Lord Adair Turner recently joined the debate about the future of the sector and explained why the ‘old school’ should be staying away.
Speaking to the BBC, he said: ‘The losses which will emerge from peer-to-peer lending over the next five to 10 years will make the bankers look like lending geniuses.’
To be fair to him, there have been a number of peer-to-peer and crowdfunding failures recently. Claims management company Rebus, which raised ￡816,000 on Crowdcube last year, collapsed earlier this month. But the amounts pale into insignificance against bank bailouts.
The Peer2Peer Finance Association says his views fly in the face of evidence and overlook regulation of the sector and the due diligence done on firms.
There are of course extra risks in this sector due to a lack of Financial Services Compensation Scheme protection, but default rates tend to be low and you get better rates for taking more risk.
While the big boys from the banking world may be coming in and pushing up the cost of equity-based crowdfunding, reward and donation-based schemes are actually thriving on their own.
Donation-based crowdfunding – where no return is expected – grew the fastest among all alternative finance models in 2015, with a 507 per cent year-on-year growth rate, albeit with just ￡12 million distributed.
Reward-based crowdfunding – where returns don’t have to be financial – increased 62 per cent year-on-year to ￡42million.
This type of platform is becoming this popular, for example, there is one launching in April called Gifted Deposit where would-be first-time buyers can pitch for help to fund a mortgage deposit, without expecting anything financial in return.
One platform, Crowdfunder, has seen an increase in reward and donation-based projects.
Around 20 per cent of its projects have a social enterprise slant and there is no financial reward. It has raised almost ￡1million for social enterprises across the UK.
I have recently joined in and launched my own social enterprise reward-based crowdfunding campaign on Crowdfunder to fund speech therapy lessons for my dad that are no longer available on the NHS.
He suffers from Parkinson’s and we want to make an awareness-raising documentary charting his progress in the hope that he can overcome a speech impediment to speak at our sister’s wedding in August.
I have been relying on the support of friends and family and social media, and so far we are halfway towards our target.
I haven’t needed any big banks, fund managers, or men in suits. No-one wants a financial return. They just want to help.
That is why I think we should be wary of the big institutions coming in and trying to monetise something that is essentially meant to be about people, not profits.