Octopus to Launch IFISA following FCA approval

Having successfully received full authorisation from regulators, Octopus is to go ahead with the launch of its first Innovative Finance ISA on the brand’s peer-to-peer (P2P) platform Octopus Choice. Set to launch over the coming months, the new ISA will be made available for new account openings at first, before being expanded further down the line for ISA transfers.

The news was confirmed by Richard Wazacz, platform head at Octopus.

Over the past few years, the P2P market has experienced meteoric growth though continues to remain a comparatively unexplored opportunity for many lenders and borrowers alike. The government’s new Innovative Finance ISA (IFISA) offers the benefit of tax-free interest, but in order for a company to be able to offer these new ISAs, it is necessary to be granted authorisation by the Financial Conduct Authority (FCA) authorisation.

The FCA also included P2P products in its rules with regard to providing financial advice last year, which means that advisers are liable for any guidance they offer on the subject and related products. Speaking on behalf of Octopus, Wazacz said that the P2P platform had been engineered in direct accordance with the rules and regulations set out by the FCA.

Launched in the middle of last year, Wazacz said that more than 75 borrowing deals had already been reached using the platform, with a total value of around £45 million.

“The incredible demand we’ve witnessed in the nine months since launch underlines the level of interest that financial advisers and their clients have shown for this type of solution, especially at a time of low interest rates and rising inflation,” he said.

“The authorisation from the regulator and prospect of an Octopus Choice ISA will only help to bolster than demand.”

The Appeal of P2P

P2P is gaining acknowledgment as one of the most mutually beneficial of all approaches to obtaining and providing finance for wide-reaching applications. It has the potential to benefit borrowers and lenders alike in ways that go over and above traditional approaches to lending.

On the part of the borrower, P2P brings the advantage of comparatively easy and flexible application processes, along with reasonable rates of interest that are comparable to those of leading banks. In addition, P2P makes it possible to get hold of the required funding in a much shorter space of time, which can be of enormous value in time-critical situations. As the industry progresses, P2P is also enabling borrowers to access increasingly large sums, though the smallest sums are also available with equally attractive terms.

On the lending side of the equation, P2P allows lenders to spread their investment risks as widely as they wish to, with most choosing to invest smaller amounts in multiple ventures. Returns can be nothing short of exceptional, though this of course varies in accordance with the specifics of the investment.

P2P represents an increasingly interesting, accessible and potentially rewarding option for investors and borrowers at all levels. For more information on IFISAs or how P2P could work for you, get in touch with the Haven IFA team today.