INNOVATIVE Finance ISA (IFISA) provider Cogress has said the mini-bond ban will impact its product but is preparing to make the necessary changes.
The Financial Conduct Authority (FCA) announced this week that mini-bond providers will only be able to sell their products to sophisticated and high-net-worth clients.
Some IFISA providers have structured their products as unlisted mini-bonds, including property investment platform Cogress.
For a minimum investment of £1,000, Cogress offers three IFISA products offering 6.5 per cent for three years, 7.5 per cent for five years and five per cent in a 90-day access account.
“It will impact some of our investment products but will bring marketing restrictions, amongst others, in line with our non-mainstream pooled investments,” a spokesperson for Cogress said.
“We have the arrangements we will need come January already in place.
“Obviously, the FCA’s objective is to provide more protection for retail investors, which we fully support.”
Meanwhile, alternative property lender Wellesley, which had already moved away from mini-bonds to focus on listed bonds, has highlighted that there are some products that have performed well.
“Mini-bonds have been a good investment in many cases and one only has to look at the likes of John Lewis, Hotel Chocolat as examples,” a spokesperson said.
“Likewise Wellesley’s mini bonds have always paid interest in full and on time and paid back in full.
“We took decision some time ago to move away from mini bonds and P2P and to focus purely on listed bonds.
“Wellesley is today purely focused on listed bonds which are listed and regulated on Irish Stock Exchange.”
Read more: P2PFN’s special report on property