MONEY&CO, the peer-to-peer lending platform founded by veteran fund manager Nicola Horlick, is planning to launch an insurance product that investors can buy alongside the Innovative Finance ISA (IFISA).
Horlick told Peer-to-Peer Finance News that she is still thrashing out the details, but expects it to be done through an investment-linked life policy.
“We’re looking at doing a policy that will protect investors against a 25 per cent loss on their portfolio,” she said.
“It’s very unlikely they will lose more than 25 per cent – if you look at the bad debt history of the oldest platforms, most of them are between 1.5 and two per cent.
“We’d rather do that than have an insurance-type fund like Zopa. I have issues with that, as if you take two per cent of the return and stick it into a pool and the losses are actually less than two per cent, over time a large amount of money is left sitting in that pool.
“The question is who owns that reserve? It’s a bit like an orphaned asset.”
The Mayfair-based firm, like most of the major platforms, is still waiting for Financial Conduct Authority authorisation to offer the tax-free ISA wrapper around P2P investments, but Horlick is hoping to have permission by early next year.
She is also considering a property-focused IFISA to sit alongside the general lending IFISA.
Money&Co, which lends to small businesses, is expanding its remit to property development loans and leasing for business-critical assets in the near future.