Sadly though, the Financial Conduct Authority’s initial proposals out today have taken a one size fits all approach to regulation of a sector which is made up of a range of very different models, each with different risks attached based on the underlying assets on offer, each requiring different regulatory approaches.
By creating a distinction between just two categories of crowdfunding – loan and investment – the FCA risks oversimplifying matters badly, with some models allowed lighter regulation when the underlying asset makes them riskier, and limiting the access of investors to other models where the risks inherent in the underlying assets are actually less.
We will be working hard in our response to the consultation and our ongoing discussions with the regulator to help bring about a more proportionate regime that will provide the right level of consumer protection given the real risks involved in each of the various models there are in reality.
FCA & Equity Release
What Is Equity Release?
Equity release is the use of financial arrangements that provide the owner of a house, or other property, with funds derived from the value of the property while enabling them to continue using it.
How Does Equity Release Work?
Equity release is aimed at homeowners aged 55 and over. It allows you to take some of the value of your home as cash.
Equity Release can create wealth out of Crowdfunding
Investment crowdfunding offers opportunities to grow your wealth in unconventional ways. Before you move forward, though, it’s up to you to consider your situation and to decide whether or not you have the risk tolerance for it. The Balance does not provide tax, investment, or financial services or advice.