A recent career change has seen me join a PR agency which brings its own challenges and excitements as with any new job, but it does not mean I will be taking any less interest in the financial markets and investing. Having started out in a West End based hedge fund before becoming a dealer at a retail derivatives provider, moving into sales and then market analysis / PR & comms, I've seen a fair amount of change in the financial services industry over the years. During that time the investment environment has changed beyond recognition from the way people manage their own or have their investments managed, to the way the industry is regulated. Despite the best efforts of regulators to improve client protection there have still been the odd mishaps where firms have caused losses for investors and depositors alike, which continues to give a bad name to the specific sector within the industry that the provider belongs and unfortunately such occurrences are unlikely to be totally eradicated as regardless of what regulations are in place, people who want to get round the rules will usually find a way.
However, in the past decade and a half financial services have become more advanced, more diverse and there are now many more choices available for investors to put their money to work. From using an app to invest directly in a brand that you've just consumed by buying one of their products online or in a pub, to taking a share in a new start up, I would argue investors have never been as empowered as they are today. Certainly the days of picking up a telephone to be given a two-way price and having a few seconds to act on the quote are long gone (although there is still a requirement for the less tech savvy investors - even I cannot totally part with the past by writing the odd cheque now and then).
From crowdfunding to online margin trading, peer to peer lending to physical commodity ownership, the choices are many and diverse, each carrying their own degree of risk of course. Take crowdfunding as an example, which is now booming and a way to get exposure to non-listed, exciting new start-ups or firms seeking fresh funding to develop and expand, but is probably for the more experienced and risk loving investor. For those that are more risk averse, peer to peer (P2) lending is another avenue that's rapidly growing in popularity. The best thing about P2P lending is how it can benefit both lenders (the investor) and borrowers, providing both with a better rate of interest than they'd get from a bank. As announced by the Chancellor from next April P2P can be put in an ISA, so not only will investors potentially get a better rate of return for lending (investing) their cash, the interest earned will be tax free.
For the more active investor there have been considerable advancements in online trading platforms varying from the simple to very sophisticated. For example, it is much easier to build automated strategies, whilst manual trading is not only quicker due to technological improvements, but cheaper as the cost of trading has been driven down. Mobile apps are now so rich in functionality that they are almost starting to make online platforms redundant.
It is of course down to the individual investor to decide which avenue they take in respect to investing and saving their money, but with so much choice now, it is worth considering a broad and diverse exposure across all these different mediums. That is if you don't want someone else to manage your money for you, another area that has evolved in recent years with disruptors shaking things up, but that's a blog for another time.
Disclaimer
This article does not contain and should not be construed as containing, investment advice or an investment recommendation or an offer of or solicitation for any transactions in financial instruments. Any opinions made may be personal to the author and may not reflect the opinions of my employer.