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Investor Update
Keith Allan • Mar 19, 2020
Here we will bring you updates on specific providers and products.You can search this blog for any specific provider that is relevant to your plan (noting that not every provider will be covered).
Octopus update 1st April 2020
On March 18, due to the large volume of withdrawals being requested from Choice, Octopus took the decision to suspend trading. That meant that until further notice Octopus stopped accepting new investments and also ceased processing withdrawals.
Octopus took this decision to pause trading because of concerns about liquidity and it has no bearing on the performance of the loan book.
Your received Interest
Investors will still receive interest subject to borrowers making their loan repayments each month however because Octopus are no longer charging borrowers a platform fee you will see your target interest rate increase from around 4% to around 5.5%, reflecting that waived fee. Monthly interest received by investors will depend on individual loan portfolios and the performance on loans within them.
Interest will continue to be credited to your accounts, where it will remain as cash until withdrawn, or automatically paid out to your nominated bank account. You can make a request to withdraw as usual, via your online account or by speaking to your financial adviser.
Octopus will continue to honour the requests of individual investors to either take or re-invest interest. If an investor has elected interest to be taken as monthly income, this will remain the case. If set to reinvest, interest will remain in their account as cash and be available to withdraw.
You can switch between these two options by logging into your account or you can email or call Jamie (jamie@jwafp.com) or Rhys (rhys@jwafinance.com) and they will happily do this for you.
Our recommendation
We have in our previous update recommended that the interest payments are to be paid out to yourselves rather than be reinvested during this uncertain time. If you do want to take Jamie’s advice, then please send us a copy of an up to date bank statement either via WhatsApp to Jamie or through the client portal.
For further information about Octopus choice you can login to your Octopus Choice account or visit the Octopus website at
Octopus update 19th March 2020
At 15:13 today, Octopus announced that they are stopping transactions on the Octopus Choice platform. This means that for the time being, our clients will not be able to invest new money or withdraw existing money from the product. They say they have taken this decision in order to protect the best interests of all clients.
Octopus also announced that with immediate effect they will no longer be applying a servicing fee to client investments.
Why is Octopus stopping transactions in Octopus Choice?
The unprecedented volatility in financial markets over the last two weeks is causing a large number of investors to try to sell down or liquidate their investments, leading to a liquidity issue. So to protect the best interests of all investors Octopus decided to cease all transactions.
What does this mean for your investment?
Octopus recognises that many investors will already be suffering losses in their other investments caused by sharp market falls in most asset classes.
These sharp falls do not apply to Octopus Choice Investments but Octopus does recognise that the inability to withdraw funds may cause problems for investors.
For this reason they have decided to cease applying servicing fees but will instead use these sums to increase returns to all investors. They will also redirect to investors the fees charged on loans. Together these will raise the target return across the portfolio from the current 4% to approximately 5.5%
When will you be able to withdraw your capital?
Octopus say as soon as practically possible.
The loan portfolio will continue to be monitored and serviced as normal. Interest will continue to be paid and credited to your account. (To your bank or re-applied to your fund – see below recommendation).
Similarly, as individual loans mature, the proceeds will be returned to you as cash.
Money invested into the Choice IFISA will be kept within the ISA wrapper and Octopus will work with investors and advisers to complete ISA transfers as needed.
Octopus say that when more normal market conditions return they will do everything possible to return the product to the level of liquidity expected of this product..
What can you do right now?
Clearly you are not able to make withdrawals but you could elect to pay the interest to your bank account rather than re-invest in the product.
Our Recommendation
We recommend that you change to having interest paid out to your nominated bank account and not re-applied to the fund.
If you wish to proceed with this change please email us at enquiries@jwafinance.com to confirm and we will amend your profile for you.
Further Reading
Here is the information about Octopus Choice that you would have received at the time of your original investment and you may wish to refresh your memory of how it works together with the answers to FAQs.
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