Today we offer tidings of a new launch, very much a product of its time – offering what are very much the products of our times.
Ikigai, a new fintech offering wealth management and e-money accounts, has launched in the UK.
The company, which previously raised £2 million in a pre-seed round, has partnerships with Railsbank and Wealth Kernel rather than building its own tech stack with the former providing its account services and the latter its investment functionality.
It does not offer certain financial protections, such as the FSCS deposit guarantee but its investments products are eligible for compensation for up to £85,000 by the FSCS.
It will offer a paid-for subscription service, charging £10 per month after an initial free month.
Founded by two ex-McKinsey consultants, Maurizio Kaiser and Edgar de Picciotto, Ikigai offers personal financial management tools, e-money accounts as well as wealth management features
These include portfolios of exchange-traded funds, built and managed using asset allocation guidance from BlackRock as well as each new client being set up with a relationship manager.
Money can be added to an account through a bank transfer from another bank, or their savings pot. This is a separate account with its own account number, International IBAN and BIC codes.
Latest Loan Offer
The latest loan offer on site has an A-rating and an annual rate of interest of 7 per cent. The term of the loan is 12 months. The offer, just launched, is now 36 per cent filled.
Historical Performance And IFISA Process Guide
That figure is the result of over £20 million of loans facilitated on the site, as we bring individuals looking for a good return on capital together with carefully vetted small companies seeking funds for growth. Bear in mind that lenders’ capital is at risk. Read warnings on site before committing capital.
All loans on site are eligible to be held in a Money&Co. Innovative Finance Individual Savings Account (IFISA), up to the annual ISA limit of £20,000. Such loans offer lenders tax-free income. Our offering is an Innovative Finance ISA (IFISA) that can hold the peer-to-peer (P2P) business loans that Money&Co. facilitates. For the purposes of this article, the terms ISA and IFISA are interchangeable.
So here’s our guide to the process:
The ISA allowance for 2020/21 is unchanged from last tax year at £20,000, allowing a married couple to put £40,000 into a tax-free environment. Over three years, an investment of this scale in two Money&Co. Innovative Finance ISAs would generate £8,400 of income completely free of tax. We’re assuming a 7 per cent return, net of charges and free of tax here.
Once you have made your initial commitment, you might then consider diversifying – buying a spread of loans. To do this, you can go into the “loans for sale” market. All loans bought in this market also qualify for IFISA tax benefits.
Risk: Security, Access, Yield
Do consider not just the return, but the security and the ease of access to your investment. We write regularly about these three key factors. Here’s one of several earlier articles on security, access and yield.