DBS

68 O T SECTOR SWOT STRENGTHS, WEAKNESSES, OPPORTUNITIES AND THREATS Higher yield than similar assets and mainstream equity Investors can control what their funds are invested into Broad range of terms from very short to very long – suits various objectives Diversification away from mainstream markets Relatively low levels of volatility Range of risk levels including low risk asset backed, well established companies Scrutinised by authorised trading platforms Low minimum investment Direct investment – no chain of intermediaries to pay for SIPP-able Secured DBS paying high yield can be great value for limited level of risk Increasing comfort levels of UK consumers with online finance transactions Potential for increasing withdrawal of banks from SME lending Continuing availability of renewables and socially responsible offers to fulfil investor engagement requirements Fixed terms and coupons help with financial planning exercises Variable returns options are available IFISA tax free wrapper for up to £20,000 bond/ debenture/loan note investments from April 2017 Other ratings agencies could become involved, following Moody’s lead Lack of benchmark for performance of unlisted bonds/ debentures/loan notes Limited analyst coverage – difficult to value/price No automatic FSCS deposit protection for funds invested Can be illiquid Can be unsecured, and relatively high risk Due diligence can be time consuming Inflation and interest rate rises pose risks (as with all fixed income investment) Can be hard to make meaningful comparisons between DBS Online fraud undermining the security of internet-based DBS transactions Potential for deteriorating economic conditions leading to increased defaults from crowdfunded bond, loan note and debenture issuers Investor covenants may be weaker than for conventional instruments Potential for platform collapse dealing reputational blows to entire DBS sector Difficulty of price comparisons High risk of default S W STRENGTHS OPPORTUNITIES WEAKNESSES THREATS