Orca Money has launched a ‘first of its kind’ Innovative Finance ISA (IFISA), which allows investors to spread their money across multiple peer-to-peer lenders.
The Orca ISA aims to open up the P2P market to retail investors and solve previous issues with investing across multiple platforms within one tax wrapper.
The P2P investment aggregator has offices in Edinburgh and Belfast. In 2018, Orca launched its investment platform, which enabled investors to diversify funds across multiple P2P providers from a single pre-built portfolio.
Iain Niblock, CEO of Orca Money, said its ISA offering could also enable everyday investors to access the P2P market.
He said: “The Orca ISA is several investments in one tax-free wrapper. We believe it can be the gateway to the P2P market for everyday investors.”
ISA rules only allow investors to subscribe new money into one IFISA per tax year. This means that, previously, to build a diversified P2P investment portfolio in an ISA wrapper, investors had to traverse a complicated process of opening separate accounts every year with different providers.
Rather than taking years, Orca says it can help investors achieve the same level of diversification within the space of a few minutes by giving access to five leading P2P platforms.
The P2P platforms featured in the Orca ISA include Lending Crowd, Landbay, Lending Works, Octopus Choice and Assetz Capital.
Niblock added that P2P investments offer stable, predictable returns that are correlated to the stock market.
Instant-access ISAs paid out an average interest rate of 0.94% in January 2019. With inflation currently standing at 1.8%, the value of cash ISA investments is being gradually eroded. Orca’s offering provides less volatility than a stocks and shares ISA – which also performed poorly in 2018.
Niblock explained: “The Orca ISA is an innovation that can make investing in P2P far more accessible to the wider investing public. It gives them a diversified, highly attractive alternative to Cash and Stocks and Shares ISAs.
“Investor funds are automatically spread across many of the UK’s leading P2P platforms. This reduces exposure to any one platform and distributes investment across a much broader range of asset classes and risks.”