The Advisor’s First Steps to Getting Started with Peer to Peer Investing

Peer to peer lending offers advisors a number of benefits in building portfolios and meeting client needs. Chief among them are the attractive yields and low correlation they provide to enhance portfolios, particularly in times of dramatic swings that often characterize the broader markets.

Additionally, due to the social good that arises from helping consumers access responsible, affordable credit, p2p investments fall into the growing category of impact investing that is becoming popular with investors.
Managed accounts are established by a sub-advisor, such as NSR Invest, in your client’s name. These can be taxable or qualified accounts. These managed accounts are easy to set up and require a low minimum initial investment ($10,000) to achieve the recommended diversification of at least 400 notes per portfolio. For financial advisors, the suggested way to access p2p investments is either through a managed account or a pooled fund.

Below, we’ve outlined the key differences between Managed Accounts and Private Funds.

Managed Accounts versus Private Funds Comparison

 


Financial advisors and investors can confidently add p2p lending to their clients’ investment portfolios by capitalizing on established p2p investment tools. By engaging with a subadvisor like NSR Invest, financial advisors can satisfy their fiduciary responsibility to make prudent credit investment decisions as they add p2p lending to client portfolios.

This content first appeared as part of our white paper, “The Rise of Marketplace Lending: Finding Yield in New Places.” Click here to download the full white paper.

Zach Richheimer
Zach is responsible for product management at NSR Invest and has been investing in peer-to-peer loans since early 2009. He is an entrepreneur with several startups under his belt, and extensive experience with equities and marketplace lending. Through his experience, he brings unique, data-driven insight to our clients to help them better understand how their p2p investments fit into their broader portfolio.