LendingClub Increases Retail Investor Minimums
LendingClub (NYSE:LC) has upped its minimum deposit to a minimum initial amount of $1,000 for all new retail investors making their first investment through Lending Club. LendingClub said this part of the process of improving the investor experience. While still a small amount, increasing the minimum should help avoid accounts with highly concentrated holdings and thus increased risk. LendingClub advocates holding a highly diversified portfolio to mitigate intrinsic risk.
“Our main goal is to deliver a better investing experience. Data shows that Lending Club investors who are able to diversify their accounts have generally experienced less volatility than investors with more concentrated holdings. This is in part because investors are able to purchase multiple Notes, reducing their exposure to any single Note.”
LendingClub states that 98% of accounts with over 100 Notes of similar size have seen positive returns.
While the majority of capital invested in the LendingClub platform is institutional money, retail investors are still viewed as a vital customer of the platform. Unlike most other US based online lenders, LendingClub accepts both accredited and non-accredited investors – depending on the state of residence.