Those 86 include major P2P firms, Landbay, Funding Circle and Zopa who are all awaiting the final sign-off before being able to roll out their own Innovative Finance Isas, leading to ask whether the launch has come too early for platforms and the FCA?
“While it would have been convenient to launch at the start of April, we fully support the fact that the FCA are being thorough in their approach to authorisation,” Julian Cork, COO of Landbay, stated.
“Luckily for consumers, investments can be put into an Isa at any time throughout the tax year, and we expect a significant amount of transfers in from existing cash Isas as soon as our IFISA is live.”
Meanwhile, Rhydian Lewis, CEO and Co-founder at RateSetter, added: “The marketplace lending industry has been preparing for the Innovative Finance Isa since it was fully confirmed in July 2015 and it is one of a number of measures that make investing through platforms such as RateSetter more tax efficient.”
Crowd2Fund are one firm who have managed to gain FCA authorisation in time to launch its Innovative Finance Isa on 6th April.
However, Chris Hancock, Chief Executive Officer and Founder of Crowd2Fund, questioned whether advisers and brokers were ready to start recommending the Isa.
“We think the awareness of the potential scale of the IFISA within these communities is still quite low and there is a lack of clarity on how it works.”
Julian also felt consumers expected advisers to be up to speed on the Isa.
“While some advisers are aware of the possibilities that P2P and the IFISA provide, others are struggling to get their heads around the changes to an industry which has not seen shakeup for decades.
“With more IFISA products coming online as firms obtain FCA authorisation, it is important that advisers understand the different levels of risk across different platforms and underlying assets and are able to articulate this to their clients.”
Julian also revealed that a report by NESTA and the University of Cambridge predicts 2016 will see a 51.9% growth in P2P lending on secured real estate.
“The tax efficiency of the Isa for consumer returns is clearly the largest driver in these predictions.
“But the fact that any platform offering an Isa must pass through full FCA regulation means that only those who are playing by the rules will be offering the tax-free wrapper, thus enabling consumers to build greater trust in the sector, which in time will build stronger growth.”
Chris concluded: “The IFISA is a phenomenal step for the P2P industry and offers a huge boost to the economy, with potentially £400bn of Isa investment funds being made available for UK SMEs.
“The IFISA also gives the industry a stamp of approval from number 11, which is very important in bringing credibility to the sector.”
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