Pick and Mix ISAs are coming to Peer-to-Peer

As Another Crowd predicted in February, the FCA has announced that firms holding the appropriate licence will be allowed to offer Innovative Finance ISAs (IFISAs) that contain a portfolio of loans from more than one peer-to-peer lender.

Storm In A Teacup by JBraine

The announcement is being treated in some sections of the press as the government bowing to pressure from industry lobbying.

When we first reported this story, we felt it was a bit of a storm in a teacup, but it had to the potential to spread negative and unsettling messages. At the heart of it was a software house which had responded to the government's consultation on the introduction of the new IFISAs by claiming that the HMRC and the FCA were at loggerheads and HMRC was trying to impose anti-competitive rules that would 'stifle' consumer choice.

We checked the text of the Statutory Instrument (the parliamentary document that amends the relevant law to make the new products legal, and we found the HMRC not guilty of the charges laid against it. The definition of 'account manager' was nice and simple. It was any firm approved by HMRC, unchanged from the 1998 legislation.

So why were Financial Reporter and the FT Adviser claiming on Friday that the government had caved in to industry pressure? We're not sure. But the tiny fragment of our readership who haven't fallen asleep yet might be take note that the rather fiddly paragraph (ib) all about nominees and 51% owned subsidiaries, didn't make it into the legislation that was laid before the House

So any fully authorised firm can launch an IFISA - just as we said in February - and we really hope they do, because there will be a market for them. Everybody likes a tax break, and different kinds of investor will value different designs of account. Let's see some innovation.