For years, we have entrusted our hard-earned money to an Asset (Investment) manager to help our investments grow over time. The traditional asset manager is a person or company who manages your assets on your behalf. But is this still the case? Crowdfunding and Peer to Peer lending are making it easier and cheaper for people to invest their money. Crowdfunding is a way for people to pool their monies to diversify their investment assets.
Have you ever looked at the fees that your investment manager charges? Maybe you should! There is an annual management charge (AMC), Ongoing Charge figures (OCF), broker fees which could all exceed 2%, excluding trading fees, commissions, stamp duty reserve tax and performance fees. This might not sound like a lot but why pay fees and commissions when you don’t have to? Crowdfunding is relatively new investment vehicle but has already become a billion-pound industry, helping people invest directly into projects while cutting out the middle man. The earliest example of crowdfunding was in 1884 when a local newspaper asked Americans for donations to build the Statue of Liberty’s pedestal. Times have changed but the principles haven’t. Recent changes in government regulation have enabled people to invest through crowdfunding companies as an alternative to banks and other asset management firms.
Crowdfunding companies are different in how they structure their fees, commissions and profits but their fees are tangibly cheaper and offer greater flexibility than those of Asset Management firms. We put the investor in control of their investment, offering higher returns without the additional fees and commissions that are associated with investing. There are several crowdfunding companies offering great opportunities to investors. Prior to investing, make sure the crowdfunding company you choose is right for you as there are a variety of investment types.