BONDMASON has become the first peer-to-peer service provider to launch a self-invested personal pension (SIPP), leading what it sees as a growing shift within the industry towards pension-grade investment vehicles.
The P2P investor, which selects loans across P2P lending platforms, will grant UK savers exposure to higher-return assets than traditional pension savings products, starting from a minimum investment of £5,000.
The new retirement product, which will allow investors to exit typically within 48 hours, will be offered through a number of SIPP administrators who are looking to diversify pension investments for their clients, without charging additional fees, BondMason said on Tuesday.
The move comes after the firm told Peer-to-Peer Finance News it was eyeing the personal pension market as a bigger area for its growth than Innovative Finance ISAs (IFISA), for which it is also in talks with regulators.
Other P2P platforms are developing their own SIPP offerings, as mainstream SIPP providers tend to eschew the sector due to a regulatory requirement that makes it more complicated to invest in P2P.
“P2P lending is an increasingly attractive asset-class,” said the firm’s chief executive Stephen Findlay (pictured). “However, SIPP administrators are rightly concerned with the practical difficulties of monitoring the activities of clients looking to invest in this sector, as well as potentially needing to set aside additional regulatory capital.
“We’ve launched this SIPP product because we recognise the need to make P2P lending as straight forward as possible, and because it fits with what our clients want and what SIPP administrators need.
“There are no additional fees for the BondMason SIPP service, and we are the only P2P operator to provide a personalised dashboard for SIPP administrators – free of charge – so they can monitor their clients’ activities to ensure full compliance.”
BondMason has so far offered returns of about eight per cent per year, in contrast with the lower-yielding stocks and bonds traditionally associated with SIPP investments.
“For this SIPP offering, we’ve worked with pension administrators to create a product which benefits from our due diligence process and the selection of only the best loans from the best P2P platforms. We are meeting a demand in the marketplace which we expect to see grow and develop more over the coming months and years,” said Findlay.