INNOVATIVE Finance ISA (IFISA) providers have been urged to work on their messaging and marketing techniques in order to improve mainstream awareness of the tax wrapper.
Neil Edwards, chief executive and founder of The Marketing Eye, an alternative finance and fintech-focused marketing agency, has called for peer-to-peer lenders to focus on more than just yield.
“Investors are looking for the optimal combination of three main factors: yield; security and liquidity,” he told Peer2Peer Finance News.
“Having an ISA is often seen by platforms as a reason in itself for investors to join, whereas it is only a small part of the equation for most investors.
“The IFISA makes yield more attractive, but platforms need to also play up the messaging on security, risk of loss and liquidity, particularly in an uncertain economic climate.”
Edwards added that a good underwriting record, security and a degree of liquidity would also provide reassurance to investors.
In the lead-up to the end of the tax year, there tends to be a spike in search traffic for ISA investments that P2P lenders should capitalise on, Edwards explained.
The Marketing Eye’s research has found that the IFISA is the least-searched-for ISA product on Google’s search engine, with Help-to-Buy and cash ISAs most popular.
“Advertising to attract [ISA search traffic] will be expensive, but it is difficult to think of a more targeted and cost-effective way of reaching an audience that is actively looking for a home for this year’s allowance,” said Edwards.
Read more: P2P lenders bullish about 2019 IFISA boost
“Lower-cost display advertising and retargeting on both the internet and the major social media platforms will also help.”
Advertising aside, platforms should also use referral incentives to leverage the loyalty of their existing investors, he added.
The IFISA attracted £290m in subscriptions in the 2017/2018 tax year across 31,000 accounts – a mammoth increase on £36m of subscriptions across 5,000 accounts in the previous tax year.
However, this is still a relatively diminutive piece of the ISA pie, compared to the £39.5bn that was sheltered in cash ISAs and £28.7bn which was invested in stocks and shares ISAs in the last tax year.
This article featured in the March edition of Peer2Peer Finance News, now available to read online.