New EASY ISA - targets 4.05%
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What do folks think? theguardian.com/money/2018/feb/24/stelios-easy-isa-investment
Is Stelios a genius, or is this a risk too far for many?the new easyMoney account isn’t a cash Isa, nor is it a stocks and shares one. Instead, this is what’s called an “innovative finance” Isa – one of the latest additions to the individual savings account family. The innovative finance Isa contains peer-to-peer (P2P) loans where lenders (the people who will be giving easyMoney their cash) are matched online with borrowers, while cutting out the banks.
EasyMoney says it can offer access to “far higher” returns than cash Isas from high street banks because it gives investors access to loans secured against UK property. It adds that it “diversifies investors into multiple property-backed P2P loans”, all of which are secured by a first legal charge. A spokesman says easyMoney is not piggybacking on an existing peer-to-peer website – it will write its own lending, and there will be no minimum investment.
But take note: that 4.05% is a “target” rate. Returns are not guaranteed and your capital is at risk. Crucially, people’s investments aren’t protected by the Financial Services Compensation Scheme.
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Comments
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While they're no doubt trying to claim some unique angle, this product really needs to be compared against all the other innovative finance ISAs available on the market, rather than cash ISAs, as the risk and reward profile is entirely different.
At face value it doesn't come out very well if the target rates listed at https://innovativefinanceisa.org.uk/isa-providers/ are anything to go by....0 -
I think the 'innovative' ISA should have just been called the P2P ISA.
It stops being innovative when they are mostly the same.0 -
I think the 'innovative' ISA should have just been called the P2P ISA.
It stops being innovative when they are mostly the same.0 -
What do folks think? theguardian.com/money/2018/feb/24/stelios-easy-isa-investment
Is Stelios a genius, or is this a risk too far for many?
How nice of The Guardian to write a puff piece promoting Stelios Haji-Ioannou's latest venture. This is an advert in all but name.0 -
ValiantSon wrote: »How nice of The Guardian to write a puff piece promoting Stelios Haji-Ioannou's latest venture. This is an advert in all but name.
Many new products are newsworthy (sadly), however this latest easyMoney venture seems less newsworthy than most, judging by the reation to it so far.:cool:0 -
Isn't that just jornalism? Amazing how many "adverts" for the Samsung S9 I see all across the TV, press and Internet today.
Many new products are newsworthy (sadly), however this latest easyMoney venture seems less newsworthy than most, judging by the reation to it so far.:cool:
No it isn't journalism. It may be what many lazy and incompetent hacks do, but it is not journalism.0 -
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I think I am going to ignore the "target 4.05%" bit and focus on the "your capital may be at risk" bit and conclude that this is too high of a risk for me, I really prefer my capital to be secure.(Although I could be wrong, I often am.)0
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Is this more secure than Zopa, Ratesetter etc ? l see the p2p is secured on property, Zopa is unsecured0
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richardjmcdougall wrote: »Is this more secure than Zopa, Ratesetter etc ? l see the p2p is secured on property, Zopa is unsecured
Secured loans give some added protection against the second risk. It does little to protect against the first. Especially if the borrower is a property developer who is operating through a Limited company.
Loans secured on property, where the property is turned into a building site, can be among the most risky of propositions. The going rate for such loans is 8-13% depending on other factors.
On the other hand, the BTL investor securing a loan on one of his properties to purchase/refurbish the next could be quite a lot safer - and perhaps safer than the likes of Zopa/RS. But even here, you can pick up such loans for rates of >6.5%.
So I really don't see the attraction of a new platform offering just 4% on loans made to a cross section of the above types of borrower.0
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