Peer to peer lending platform Octopus Choice has become the first adviser-focused P2P platform to be granted full authorisation by the Financial Conduct Authority (FCA).
Octopus Choice was launched in April 2016, to coincide with the FCA’s decision to broaden the scope of advisers’ permissions to include P2P lending. Following its launch, the product has facilitated nearly £45m of borrowing across more than 75 deals.
Every loan is secured against residential property at average loan-to-values of 60% and is underwritten by Octopus Property. Since its launch in 2009, Octopus Property has lent over £2.2bn with a default rate of less than 0.1%.
To provide investors with additional protection, Octopus also invests 5% in each and every loan at first loss, meaning it would always lose its own money first in the event that anything went wrong.
The FCA authorisation now opens the door for an ISA version of Octopus Choice, following the launch of the Innovative Finance ISA by the Government last year; only firms that have received full FCA authorisation are eligible to offer an IFISA. The Octopus Choice team is currently developing the ISA product with a view to introducing it later in the year.
Richard Wazacz, head of Octopus Choice, said: “We’re delighted that the FCA has decided to grant Octopus Choice full authorisation. It’s the culmination of some really positive dialogue with them over the past few months, and a hugely important milestone that will give renewed confidence to our fast-growing base of advisers and investors.
“The incredible demand we’ve witnessed in the nine months since launch underlines the level of interest that financial advisers and their clients have shown for this type of solution, especially at a time of low interest rates and rising inflation. The authorisation from the regulator and prospect of an Octopus Choice ISA will only help bolster that demand.
“While we’re currently working on an ISA version of the product that will be made available later this year, our primary focus is on giving the best possible service to the thousands of financial advisers and investors we’ve already attracted. We’ve achieved a huge amount in a very short time, but there’s still plenty we’d like to do to ensure Octopus Choice remains the simplest, safest and most transparent P2P product in the market.”