PEER-TO-PEER investor BondMason has unveiled changes to its minimum investment and charges after its previous format was “proving uneconomic”.
BondMason, which targets an eight per cent gross return for investors by placing funds across various P2P platforms on their behalf, has raised the minimum investment from £1,000 to £5,000 for new investors, while the change will be effective for existing clients from 31 July.
A new tiered fee structure will be introduced from 31 May for new and existing investors.
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Investors previously paid annual fees of one per cent regardless of the amount invested, but from 31 May they will pay 1.5 per cent on amounts up to £25,000 then 1.25 per cent on any amount between £25,001 and £100,000. There is then a one per cent charge for everything over £100,000.
For example, someone investing £100,000 would be charged 1.5 per cent on the first £25,000 and then 1.25 per cent on the next £75,000.
The move has upset some investors but Stephen Findlay, chief executive of BondMason, told Peer-to-Peer Finance News that it made the offering better for those with smaller investments.
“This structure puts us in line with other investment services and is to reflect our commitment to client services, which was sadly proving uneconomic for clients with smaller balances,” Findlay said.
“We are also sourcing an increased amount of investing from outside P2P lending, and this requires further investment to identify and put in place appropriate legal and operating frameworks with each loan provider.
“The revised account sizes and fee structures ensure we can sustainably provide access to attractive returns over the long term.”
Those with investments of under £5,000 will have the option to either top up their account by 31 July, run it down until the underlying loans are paid off or to just sell their holdings.
Findlay highlights that the average client account balance is around £20,000.
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