Clients often ask about what they should be doing with the cash they have in bank and building society accounts.
Peer-to-peer or direct lending seems to have become a popular consideration for some of those investors. Due diligence is therefore a must and this might be a real challenge for investors lending their money directly to borrowers. A collective approach might add a degree of risk spreading, hence the popularity of some of the available platforms.
Goji Financial Services has a product that might be worth looking at. It has in a very short time frame acquired more than £80m of investor assets onto its platform – this money, belonging to over 5,000 account holders.
Essentially it offers two products: a diversified lending product and a renewables lending product, both of which are available to Isa and shortly to Sipp investors. These are, as you might imagine short-term products, with the diversified lending offer being a one-year product and the renewables lending offer either a three or five-year product. With investment as low as £1,000 (£5,000 for advised clients) this might appeal to a broad range of investors. The diversified lending product is targeting a 5 per cent net of all charges return over 1 year.
The renewables lending offers a three or five-year term, targeting returns of 19.5 per cent and 41.5 per cent respectively. The Goji products are not without risk, but may well be suitable for clients looking for further diversification away from cash and bonds in their portfolio.
Nick Bamford is a chartered financial planner at Informed Choice