Just the Lawsuit ISA

Alexland

Ok now there are ISAs from a company called Just that might deliver a 40% return over 5 years by funding lawsuits. Is it just me or is the quality of the ISA brand (which they did a very good job on launch with prominent CAT standards) being erroded by the day? What a total mess the government is allowing this market to decline into.

https://www.thisismoney.co.uk/money/investing/article-6205017/Just-offers-8-return-invest-lawsuits-Innovative-Finance-Isa.html

Ps if it isn't obvious this is not a recommendation.

Alex

AnotherJoe

A few months back someone was desperately trying to convince people that a company like this (not sure if it was the same one) was a great investment opportunity.


Seems that 8% return is the new black

Alexland

Yes I remember the thread but I couldn't read it to conclusion without throwing myself out the window in frustration. What I didn't realise was this type of thing was again going to be packaged as a dubiously titled ISA bond.

While most of the regulars here are smart enough to avoid - my disappointment is that when some of these mad adventures fail the otherwise successful ISA brand could be permanently damaged as members of the public start suffering big unexpected life changing losses.

I just missed PEPs and TESSAs so my first experience with tax free savings was on launch of the ISA market in 1999 and looking back remember what a good job they did with encouraging quality into the market. Now it seems any old rubbish can become an ISA. Very sad.

Alex

masonic

You could always open a S&S ISA and invest £20k in a single ultra high risk share and lose the lot within days.

What they need to do is prominently differentiate between cash ISAs and other types of ISA where an interest rate is quoted.

Alexland

masonic wrote: »

You could always open a S&S ISA and invest £20k in a single ultra high risk share and lose the lot within days.

Sure but most people know that and as a result many are overly S&S cautious and avoid even sensible investments. What worries me is the new breed of ISA bonds is confusingly reassuring and we have no idea how many thousands of greedy (but otherwise innocent) consumers are getting sucked into things they don't understand on what looks like normal fixed guaranteed returns.

Alex

londoninvestor

Agreed. I think there's a case for saying that the IFISA label should only be allowed for products that diversify loans across many recipients. "Crowdfunded debentures", which is what this "Just" product is in the terminology of the ISA regulations, could be allowed in S&S ISAs like single-name stocks and bonds are.

masonic

londoninvestor wrote: »

Agreed. I think there's a case for saying that the IFISA label should only be allowed for products that diversify loans across many recipients. "Crowdfunded debentures", which is what this "Just" product is in the terminology of the ISA regulations, could be allowed in S&S ISAs like single-name stocks and bonds are.

I have several IF ISAs and use them exclusively for individual self-select P2P loans. It would be very convenient if I could do this within a S&S ISA instead, but I don't think it would be feasible to create the necessary financial instruments to allow that to work in practice.

londoninvestor

masonic wrote: »

I have several IF ISAs and use them exclusively for individual self-select P2P loans. It would be very convenient if I could do this within a S&S ISA instead, but I don't think it would be feasible to create the necessary financial instruments to allow that to work in practice.

Do you mean you use a P2P platform, but within it choose to only lend to a small number of selected borrowers? If so, that seems within the spirit of IFISAs - I should perhaps have said "products that allow you to diversify across many recipients".

masonic

Alexland wrote: »

Sure but most people know that and as a result many are overly S&S cautious and avoid even sensible investments. What worries me is the new breed of ISA bonds is confusingly reassuring and we have no idea how many thousands of greedy (but otherwise innocent) consumers are getting sucked into things they don't understand on what looks like normal fixed guaranteed returns.

The problem is that they quote an interest rate, which confuses consumers into thinking they are offering a savings product and/or that's the rate they will achieve. That's a practice that needs to be banned and replaced with a more appropriate regulated statement about returns, including loss potential.

masonic

londoninvestor wrote: »

Do you mean you use a P2P platform, but within it choose to only lend to a small number of selected borrowers? If so, that seems within the spirit of IFISAs - I should perhaps have said "products that allow you to diversify across many recipients".

Yes, I thought you were suggesting providers should be made to automatically diversify client's money across many recipients, but see now that wasn't what you actually stated.

Wildsound

If I was a ponzi scheme, what would I do?

Introducing: The new 5-year Innovative <insert buzz word> ISA bond - annualised <insert number between 8-100>% return

(all your capital at risk instantly - aimed at professional investors only, but if you've got this far, you must be one of those so we will let you off on our due diligence checks)