Looking across the exhibition area from the ESF Capital stall at the AltFi conference, I was minded of seminal punk poet John Cooper Clarke’s book Ten Years in an Open Necked Shirt.
Being ‘alternative’, the (still mainly) men of the decade-old sector forswear the buttoned-up look of their brethren in traditional finance. And, indeed, among the thronging AltFi crowd there was barely a tie to be seen. This was a gathering where altfi spake unto fintech, and vice versa. ‘Tradfi’ is certainly aware of us, but not to the degree that they feel compelled to batter down the doors to our events.
But, given the advent of the Innovative Finance Isa, how long will this remain the case? Even the most conservative estimates of the impact that this will make on the sector predict prodigious growth. For those already investing in P2P loans, the Isa wrapper will act as a prompt to take a larger slice of their wallet, given its greater tax efficiency. And it will substantially raise the profile of the asset class for the millions of other investors who, year by year, plough their savings into what now tops 13m accounts holding about £80bn in the past tax year. In total, there are £500bn of assets, spread across cash and stocks and shares Isas in the UK’s savings pot.
Opening up the field to P2P would have a substantial impact on it under any market conditions. Doing so in a period where conventional assets are low-yielding and volatile plays even better to our strengths.
We are on the cusp of a major shift in the industry’s size and profile. Speaking as someone whose background is, in part, in traditional asset management, I think it highly likely that asset managers, wealth managers and the like are about to start taking a much closer interest in alternative finance and its inner workings.
Next year’s AltFi conference may well see a lot more ties in the audience and on the platform.