Firing line 

Technology is changing business models and creating threats

Technology is changing business models and creating threats

Helping advisers access products and services they historically have not found it easy to obtain is the driver behind the creation of Octopus Labs, its director Sam Handfield-Jones has said. 

The Lab is one of six business arms that make up Octopus Group, a company that specialises in tax-efficient investing: venture capital trusts (VCTs), enterprise investment schemes (EIS) and inheritance tax (IHT) products.

The group’s other arms are focused on smaller company financing, renewable energy and healthcare.

About two-and-a-half to three years ago, Octopus set up in-house fintech innovation arm Octopus Labs to use technology to help advisers.

Mr Handfield-Jones said although Octopus has always worked with financial planners, it was not using technology as much as it could to help advisers, so Octopus Labs was set up to build “innovative” financial services products.

“My role in that is looking after the direction of the labs and what areas we want to explore. A lot of what I do is spending time with financial advisers, talking about friction and pain points and trying to come up with solutions,” said Mr Handfield-Jones. 

“At the same time, where products have become successful with advisers, we grow and develop those to make sure we retain a strong customer centricity.”

When the first offering was launched two years ago, it was named Octopus Choice. The move was in response to enquiries from advisers who wanted to find out how the peer-to-peer market (P2P) worked. Octopus Choice uses P2P technology to enable advisers to help their clients provide loans to individuals or companies, which have been secured against residential property.

Mr Handfield-Jones said the majority of P2P platforms were heavily focused on a direct-to-consumer model, with very few having an adviser portal. With Octopus Choice, Mr Handfield-Jones said the platform is designed to make it easier for advisers to pick the best loans for their customer.

He describes it as a discretionary portfolio constructed by Octopus, where all underwriting, checks and due diligence have already been done. The firm claims that Octopus Choice can help investors earn around 4 per cent a year by investing in carefully selected loans backed by bricks and mortar.

Mr Handfield-Jones said: “We looked at the space and decided none of the existing options were designed for financial advisers, so we went out and spent a lot of time with advisers, interviewing, testing ideas and working in partnership with them, to come up with a clear offering that appealed and worked with their needs.

“For us, P2P was a missed opportunity for financial advisers and we wanted to create a product that allowed them to provide advice and recommend these types of products to their customers.