By John Reynolds on Wednesday 4 December 2019
The two firms launched the tie-up in 2017 but the new rules have complicated the benefits, according to Plum’s CEO Victor Trokoudes.
Plum, the AI-powered savings app, has ended its partnership with peer-to-peer lending platform Ratesetter ahead of new rules which are aimed at better protecting investors using peer-to-peer platforms.
The regulator, the Financial Conduct Authority (FCA), is introduding a raft of new rules including measures which mean P2P lenders will have to introduce appropriateness tests and can only market their products to sophisticated, high-net-worth individuals or those who commit only to investing a maximum of 10 percent of their assets.
The new rules are being introduced following the high-profile failure of Lendy, the peer-to-peer network which collapsed with £165m in outstanding loans, earlier this year.
The regulator has been criticised in some quarters for its crackdown on P2P lending which come into force on the 9th of December.
Trokoudes said: "We have informed our users that we have rolled off the partnership with Ratesetter a few weeks ago, because there were changes in how we had to give access to people to Ratesetter that didn't make it a very attractive proposition to our user base."
"The FCA has come in and said if you are investing in peer-to-peer you have to be a sophisticated investor. And you should put only ten percent of your money in it [at a maximum]. Basically at this point, it makes more sense to focus on our investment proposition that is more accessible to everyone versus peer-to-peer lending."
"We have decided not to continue and focus on our investment product."
A spokesman for RateSetter declined to comment.