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Learn From Northern Provident Investments To Stay Out Of Trouble

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By on 4 October, 2021 | Read more by this author

Northern Provident Investments was a company I'd never even heard of that offered IFISAs. It recently shut down, possibly because it offered mini-bonds, which the FCA recently banned from mass-marketing.

Clearly, it was small. It also seems likely it either didn't offer P2P lending investments or that it was a blend of P2P lending and other types of investments. It therefore might not have fallen under 4thWay's remit of investigation.

But, even if it did, it appears likely that it might not have been one of those that would have wanted to go through our specialist's initial due-diligence process. That is an intensive, almost month-long assessment of its people, processes and data.

The regulator has something to say

There's no sign yet from the outside of any reason for lenders to believe that their underlying investments will suffer as a result of Northern Provident's wind-down. But that's not the point of my article today and it's not something we're going to investigate at 4thWay.

We already regularly tell 4thWay readers that you can't lend in any P2P lending company that don't provide large amounts of information and access, so that you can assess the risks.

But the new learning point that we've not covered before doesn't come from directly what's happened at Northern Provident, but rather from a useful suggestion from the Financial Conduct Authority. It has a sensible piece of advice for investors who lent and invested through Northern Provident.

It could apply when any of your P2P lending providers close down, or indeed your other investment providers. So it's worth taking a second to consider.

Check who's trying to help you

The FCA's recommendation is simply that investors in these cases should be cautious if they are contacted by anyone claiming to be involved in the wind-down or clean-up process.

For example, by someone claiming to represent the officially appointed administrators of a bust investment provider.

Or they might instead pretend to be from the FCA itself. Alternatively, they might be people claiming to be from companies that can help you get your money back. They might even use the names and, apparently, the email addresses of people working legitimately at companies that really are involved.

The bottom line is to be cautious and never to transfer any money to these people. If you are cold-called, simply say you won't accept a cold-call like this and hang up. If you can't remember what to say, simply hang up. Just don't let them put you under pressure.

Remind yourself of the basics to almost completely nullify the worst risks: 4thWay's 10 P2P Investing Principles.

Independent opinion: 4thWay will help you to identify your options and narrow down your choices. We suggest what you could do, but we won't tell you what to do or where to lend; the decision is yours. We are responsible for the accuracy and quality of the information we provide, but not for any decision you make based on it. The material is for general information and education purposes only.

We are not financial advisors, which means that we don't offer advice or recommendations based on your circumstances and goals.

The opinions expressed are those of the author(s) and not held by 4thWay. 4thWay is not regulated by the ESMA or the FCA. All the specialists and researchers who conduct research and write articles for 4thWay are subject to 4thWay's Editorial Code of Practice. For more, please see 4thWay's terms and conditions.

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Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers two “bonds”, one of which is available as an ISA.

Unlike its P2P lending service, neither of these bonds allows you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

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Why are Wellesley’s interest rates different?

Wellesley’s P2P lending rates appear higher on its own website than on 4thWay®.

This is because we calculate Wellesley’s interest rates the same way most other P2P lending websites do. We do this so that you can compare the rates more easily and so that they show a more accurate picture of what you’ll earn.

Important information before you visit Wellesley & Co.

Wellesley & Co. is primarily a P2P lending website.

But, when you visit the Wellesley website, you’ll see that it also offers “bonds”. Unlike its P2P lending service, its bonds don’t allow you to lend directly to 100+ borrowers.

Instead, you lend to Wellesley and it lends to other borrowers.

We have not risk-rated either of those bonds, but we expect that their structure makes them more risky, particularly because you’re lending to just one borrower.

Got it

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