Hargreaves Lansdown has dropped its plans to set up a peer-to-peer lending platform.
The company, which was expected to launch both a P2P lending platform and a cash management service to clients this year, has now decided it will solely focus on the cash management service.
Hargreaves Lansdown chief executive Chris Hill tells Fund Strategy‘s sister title Money Marketing that despite P2P being “interesting”, the firm would rather focus on the new savings proposition because it is “a much bigger market”.
It is estimated the savings market is worth £700bn, significantly more than the current loans in the P2P market, which stand at around £3.5bn. More than 45 per cent of Hargreaves clients currently hold more than £75,000 in cash savings.
Hargreaves rival St James’s Place has recently teamed up with Metro Bank to offer clients savings accounts and cash Isas.
Hill says: “Our focus has been on savings and this has meant that peer-to-peer has pretty much been on the back burner for some time now, to the extent that I now no longer see this as being part of our wider offering.
“Peer-to-peer is an interesting market and we can see the attraction to selected investors, however it is no longer part of our plans.”
Hill says the the savings proposition Hargreaves is preparing is “unique”, but that the work needed to implement it is taking “considerable time and resources”.
Despite receiving regulatory permission in December, Hargreaves’ savings offering has not yet launched yet and is to do so before October.
Hargreaves has been mulling the idea of a P2P service since early 2015, initially saying it would launch in the second half of 2016 and then delaying plans until this year.
Investment Quorum chief executive Lee Robertson says: “Hargreaves knows what it is doing and the clients they attract so they know their cash offering is a catching pool.
“P2P is still such a fluid market with people coming and going. Hargreaves tends not to launch before a product is ready and think about a launch before they spend resources on it.”