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46 INDUSTRY ROUNDTABLE INSIGHTS FROM PROVIDERS MODERATOR: LISA BEST INTELLIGENT PARTNERSHIP HOW HAVE THE LAST 12 MONTHS BEEN FOR YOUR BUSINESS AND HAVE YOU NOTICED ANY CHANGES FROM PREVIOUS YEARS? 2016 was a year of significant growth for us, with loan volumes up 30% on 2015. Much of the increase in investor demand came from clients seeking better returns for cash in SIPPs. We added 4 additional staff to our investment team, to help us stay ahead of the demand. The last 12 months for our business has been very exciting because half of our business focuses on Innovative Finance ISA administration and we do consider ourselves to be the experts when it comes to the IFISAs. We’ve done a lot of lobbying of HMT and HMRC on this. When debt based securities were given ISA capability in October, it was a game changer for us and meant that our bonds, which we see as a way to provide an aggregated solution for investing in online lending opportunities, were made much more attractive to eligible investors. The tax wrapper is the big change because, with any new product that is non- mainstream, when focusing on the intermediary channel, the way of getting it into a meaningful investment conversation is to have the opportunity of holding it within a tax wrapper. SIPP providers have been pulling back because of capital adequacy requirements on these non-standard, illiquid assets and so if it wasn’t for the ISA, this would be a challenging environment to work in. This is notwithstanding the fact that the standalone investment economics make it quite attractive compared to other alternatives. I agree with Jake that the IFISA is exciting and think the last 12 months has been sort of a game of two halves. The first half was getting ready for the launch of IFISA, so we saw strong consumer demand for our products in the run up to summer and then we deliberately slowed down our pipeline for the launch of our bonds, being IFISA eligible in November, on November 1st. In the run-up to the November period, which actually was our year-end, we did about £8 million of investments. And then in the six weeks following the launch of IFISA, we did £17 million. So, we saw a big step-up in terms of demand. Now, partly that was driven by us delaying a series of projects for the November 1st date, so we had a backlog of demand and a backlog of supply. The second half of the year has essentially been a test of whether IFISA will increase demand. And the answer is an emphatic “yes” and it increased it in two ways. Firstly, 50% of our IFISA customers are new customers to Abundance, who were attracted by the offer of the IFISA in general. As a result, we now have 800 new customers. And they invest, on average, 30% more than previously; our average investment prior to November was £7,000 per customer and that’s now gone up to £10,000 and counting because that’s just what they’ve invested in the last few weeks, and we would expect that to grow in the first two to three years of their relationship with us. What we expect is that people build up a portfolio in their first year and then they continue to grow it as more projects come online. And on average, they invest in five projects a year. So, we’re expecting those £10,000 investors to become much larger investors over time. We’ve also seen quite large amounts of ISA transfers from both cash and stocks and shares ISAs; we’ve done £6.5 million of ISA investments, of which a third has been funded by ISA transfers. And to put that into context, the average stocks and shares ISA transfer has been around £30,000 and the average cash ISA transfer, around £5,000. We’ve also had, and we still have at the moment, an offer for people who want to reserve their allowance, but don’t necessarily want to invest immediately, so they earn 2% on their cash balance, in the first instance until May 31st. We also did that last summer and we do it when we have a gap in our projects, and now so people can reserve their IFISA allowance, which is important because you can only do one per year IFISA per year; you can have a cash and a stocks and shares ISA as well but ATTENDEES JULIA GROVES DOWNING LISA BEST INTELLIGENT PARTNERSHIP (MODERATOR) BRUCE DAVIS ABUNDANCE JAKE WOMBWELL-POVEY GOJI ROHIN MODASIA PROPERTY CROWD MATT TAYLOR ROCKPOOL JAMES CRANMER TRIPLE POINT