OCTOPUS Choice has announced the launch of its Innovative Finance ISA (IFISA).
The peer-to-peer lender, which was spun out of Octopus Investments in April 2016, said that the tax-free wrapper around P2P investments would target returns of four per cent per year.
Octopus Choice offers property-backed loans to investors, which are underwritten another lender under the Octopus umbrella, Octopus Property.
Loans are secured on the property but to provide investors with additional protection, Octopus also invests five per cent of its own money into every loan at first loss, meaning investors can get their initial investment back first, as well as receive any interest due to them before Octopus receives any.
Unlike the majority of the P2P lending market, which has so far failed to woo financial advisers, Octopus Choice was launched in consultation with advisers and can benefit from its sizable network.
“Over the last year, financial advisers and their clients have shown tremendous appetite for this type of solution,” said Sam Handfield-Jones, head of Octopus Choice.
“At a time of low interest rates, rising inflation and ever-present stock market volatility, providing clients with an alternative option for their investments may have never been more important or valuable.
“We are thrilled that we can now help advisers include Octopus Choice within their clients’ ISA planning and we expect today’s launch to bolster the impressive demand we have already witnessed for this product.”
Mike Searle, director of Nouveau Wealth Management, added: “From a client perspective, the concept behind Octopus Choice is very easy to understand: a client’s investment is secured against property so they have a safety net, while Octopus stands the first five per cent of any loss in the event that anything goes wrong.
“I genuinely believe P2P lending will become more mainstream in the years ahead. If advisers simply pass it by without a thought, I believe they are doing their clients an injustice.”
Read more: Octopus Choice to launch IFA portal