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Room 101: what would these wealth managers banish?

Solomon Nevins, investment manager, Architas, London

Investment

My investment choice is peer-to-peer lending, online platforms where borrowers and lenders are matched with the promise that both the borrower and the lender get better rates than through the conventional banking system. Platforms claim that because they don’t have the expensive overheads of traditional banks, such as branches, they are able to offer better terms. However, unlike a bank, they don’t take any exposure to the loans and simply make money though arrangement fees. Platforms’ revenue is driven by loan volumes so they have an incentive to downplay the risk. This lack of alignment with borrowers is a problem. They argue weak lending standards will come through in poor performance and damage reputation. But I’m yet to be convinced. There is merit in this cost effective model, but we need more alignment of interest between platform and lender – they need to share the financial pain.

Personal

On the personal side, I choose nursery fees. As a new dad this is a direct issue for me! But more importantly it makes it very difficult for women to return to work, which has a negative impact on the UK economy. There must be a better, more cost effective solution.

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Solomon Nevins, investment manager, Architas, London

Investment

My investment choice is peer-to-peer lending, online platforms where borrowers and lenders are matched with the promise that both the borrower and the lender get better rates than through the conventional banking system. Platforms claim that because they don’t have the expensive overheads of traditional banks, such as branches, they are able to offer better terms. However, unlike a bank, they don’t take any exposure to the loans and simply make money though arrangement fees. Platforms’ revenue is driven by loan volumes so they have an incentive to downplay the risk. This lack of alignment with borrowers is a problem. They argue weak lending standards will come through in poor performance and damage reputation. But I’m yet to be convinced. There is merit in this cost effective model, but we need more alignment of interest between platform and lender – they need to share the financial pain.

Personal

On the personal side, I choose nursery fees. As a new dad this is a direct issue for me! But more importantly it makes it very difficult for women to return to work, which has a negative impact on the UK economy. There must be a better, more cost effective solution.

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Daniel Adams, senior investment analyst, Psigma Investment Management, London

Investment

The biggest gripe I have with our industry is short-termism. I fully appreciate that this is somewhat of a consensual gripe, but I do strongly feel that it undermines the fabric of our industry.

Increased short-termism leads to investment firms and consequently fund managers to be more aware of their respective benchmark performance, which in turn leads to low active share. The result is that all too frequently performance is relatively ‘similar’ to the benchmark and thus (justifiably) questions then surface about fees.

This becomes a self-enforcing trend, which is difficult to break. I believe we are all guilty of this to some degree, and it is one of the natural curses of this incredible access we now have to information flow and data in the new digital age.

Personal

Healthy food masquerading as the less healthy substitute. Don’t get me wrong, I am all for healthy eating, but I do take issue with it pretending to be something it is not – ‘naked burrito’ (it is just the contents of a burrito, in the same way a ‘naked beans on toast’ is a just a tin of beans), ‘super-foods’, ‘nice cream’, ‘courgetti’ (is not a replacement for pasta), ‘chocolate avocado mousse’(tastes nothing like chocolate mousse) and ‘tahini fudge’ (it is not fudge, it is just frozen fruit). A lot of it is very nice/edible, but quite frankly it is false advertising. If the industry was regulated by the FCA, I am sure there would be fines galore.

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