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Post by bikeman on Sept 9, 2017 21:43:42 GMT
I am somewhat peeved that my investment in one of the black box account (GEIA) resulted in it being 'diversified' across only 3 loans. One of which almost immediately had trading suspended and has remained so now for several months.
I invested in the GEIA believing that as I had no say in which loans I was invested in AC would diversity my money somewhat more than 30%. I also thought the provision fund would provide some sort of redress - probably naive of me.
- Please can someone point me to where on the website AC explain their diversification rate.
- How long have you had funds tied up in suspended loans?
- Has AC ever paid out to you from their provision fund?
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ashtondav
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Post by ashtondav on Sept 10, 2017 8:02:05 GMT
The AC PF is virtually useless. you should invest on the basis of there not being a PF. The problem being that you cannot diversify adequately.
It should be very simple and run on the lines of Ratesetter's PF, where the lender never has visibility of a bad debt because the PF steps in pays capital and interest on the loan.
The black box accounts on AC are deeply flawed.
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agent69
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Post by agent69 on Sept 10, 2017 8:42:59 GMT
I am somewhat peeved that my investment in one of the black box account (GEIA) resulted in it being 'diversified' across only 3 loans. One of which almost immediately had trading suspended and has remained so now for several months. I invested in the GEIA believing that as I had no say in which loans I was invested in AC would diversity my money somewhat more than 30%. I also thought the provision fund would provide some sort of redress - probably naive of me. - Please can someone point me to where on the website AC explain their diversification rate. - How long have you had funds tied up in suspended loans? - Has AC ever paid out to you from their provision fund? - The problem with the green energy account is that there is a severe shortage of qualifying loans, so getting invested (and diversified) is a struggle. I assume that when more qualifying loans appear your diversification will improve towards the 20% target. I have 60 loans in my GBBA account but 40% of my money is tied up in just 2 of them Loans can stay suspended for years while the legal process of recovery takes place (look at Ippy and Eppy as examples) The ratesetter provision fund pays out when loans default. I believe that the AC provision fund pays out after final recovery of the loan has taken place. I don't have a lot of failed loans on AC, but am not aware of the PF having been used yet.
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skippyonspeed
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Post by skippyonspeed on Sept 10, 2017 8:57:42 GMT
.......... The AC PF is virtually useless. you should invest on the basis of there not being a PF. The problem being that you cannot diversify adequately. It should be very simple and run on the lines of Ratesetter's PF, where the lender never has visibility of a bad debt because the PF steps in pays capital and interest on the loan. The black box accounts on AC are deeply flawed. Nice to see somene has woken up smelling the coffee  .....the only thing I would add is the most important word that everyone seems to ignore..... Discretionary .....so please use DPF and not PF.
The fact that I would have no control with these types of account are one of the reasons why I wouldn't touch them with your barge pole let alone mine.
Vive La MLIA!
Edit......How many loans in the 'black hole box' accounts are in, or approaching, default?
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ashtondav
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Post by ashtondav on Sept 10, 2017 10:24:38 GMT
If you are going to have a VERY discretionary useless PF YOU DO NOT PROVIDE diversification at the 30% level.
A PF that doesn't pay out for years is not worth having. Provide the protection by diversification instead.
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Post by stuartassetzcapital on Sept 10, 2017 13:16:40 GMT
The provision fund has to be discretionary for legal reason - having said that it is fully funded for all known and forecast losses - the defaults and losses web page explains this in detail including that it provides cover in more extreme economic conditions than today.
Nonetheless we take the point that our secured loan recoveries take a while and we will review the payout speed shortly as I suspect we could do better.
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Post by oldnick on Sept 10, 2017 14:00:02 GMT
... Nonetheless we take the point that our secured loan recoveries take a while and we will review the payout speed shortly as I suspect we could do better. Mod hat off With all due respect Stuart, please strike out 'could' and replace with 'must'. It is, after all discretionary, so choose to pay out sooner. Any windfall gains after the payout event will presumably be returned to the DPF.
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savernake
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Post by savernake on Sept 10, 2017 14:32:26 GMT
The provision fund has to be discretionary for legal reason - having said that it is fully funded for all known and forecast losses - the defaults and losses web page explains this in detail including that it provides cover in more extreme economic conditions than today. Nonetheless we take the point that our secured loan recoveries take a while and we will review the payout speed shortly as I suspect we could do better. I don't understand why 'legal reasons' are preventing AC being able to state the precise circumstances when their PF will payout. Other platforms eg. RS, GS, LW, and Z(Safeguard) have all been able to state on their websites precisely when their PF will pay out. This inspires trust and confidence in the platform.
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ashtondav
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Post by ashtondav on Sept 10, 2017 14:47:09 GMT
Exactly.
"At the directors' discretion the PF will pay interest and capital payments after six months of missed payments."
Very simple. Legality is a red herring, see Ratesetter as a good example of a discretionary PF with payment rules.
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Post by chris on Sept 10, 2017 15:14:19 GMT
What other platforms do or do not do has no bearing on the legal position or our interpretation of the regulations. There have been many instances already of platforms interpreting things one way and then being forced to make fundamental changes. Lendy's INPL being a great example of something we always said was non-compliant despite lenders calling for us to copy. Other platforms may find their interpretation of regulations governing provision funds similarly fall foul necessitating fundamental change or worse.
Our implementation is one we believe to be compliant and compatible with the permissions we have. We offer investment accounts focused on liquidity, balanced between automation and return (with acknowledged need for improvements to the diversification algorithm which will come in the next couple of months), or fully manual loan selection with no fees. We're the largest p2p platform in the UK still offering that manual selection of loans. Lenders have a choice, it's up to you which strategies you wish to employ.
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j
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Post by j on Sept 10, 2017 15:33:48 GMT
mod hat off/
Whilst the legal PF discretion issue raised is being skewed away from with still no real or clear explanation, also, no explanation has been offered as to the diversification, or lack thereof, point mentioned in the OP! That's why I don't invest in any of the automatic funds as you don't seem to get, in my eyes at least, what you think you're getting with amounts being supposedly invested in a much smaller number of loans than anticipated, hence a much lower security via diversification. Put the PF fund issues on top & then...
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Post by chris on Sept 10, 2017 16:34:23 GMT
mod hat off/ Whilst the legal PF discretion issue raised is being skewed away from with still no real or clear explanation, also, no explanation has been offered as to the diversification, or lack thereof, point mentioned in the OP! That's why I don't invest in any of the automatic funds as you don't seem to get, in my eyes at least, what you think you're getting with amounts being supposedly invested in a much smaller number of loans than anticipated, hence a much lower security via diversification. Put the PF fund issues on top & then... The Access accounts all have near perfect diversification across the loans held, so you invest today and you are diversified across all loans held with broadly the same diversification as every other lender. Currently the other automated accounts do not co-operate in that way as they predate that model and thus diversification with limited supply of loans is not as good. We're actively working on a solution to bring them into line with the diversification of the access accounts for existing lenders as well as new but the solution is technologically complex (although requiring no input from lenders) and will take some time to develop, test, and deploy.
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Post by df on Sept 11, 2017 1:42:02 GMT
mod hat off/ Whilst the legal PF discretion issue raised is being skewed away from with still no real or clear explanation, also, no explanation has been offered as to the diversification, or lack thereof, point mentioned in the OP! That's why I don't invest in any of the automatic funds as you don't seem to get, in my eyes at least, what you think you're getting with amounts being supposedly invested in a much smaller number of loans than anticipated, hence a much lower security via diversification. Put the PF fund issues on top & then... The Access accounts all have near perfect diversification across the loans held, so you invest today and you are diversified across all loans held with broadly the same diversification as every other lender. Currently the other automated accounts do not co-operate in that way as they predate that model and thus diversification with limited supply of loans is not as good. We're actively working on a solution to bring them into line with the diversification of the access accounts for existing lenders as well as new but the solution is technologically complex (although requiring no input from lenders) and will take some time to develop, test, and deploy. I deed, QAA and 30-day are well diversified. I think GBBA and GEIA are struggling because they are out of date. There aren't many new loans that can feed into them. Are we likely to see the rates for these two dropping closer to PSIA in near future?
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Post by oldnick on Sept 11, 2017 6:19:36 GMT
The Access accounts all have near perfect diversification across the loans held, so you invest today and you are diversified across all loans held with broadly the same diversification as every other lender. Currently the other automated accounts do not co-operate in that way as they predate that model and thus diversification with limited supply of loans is not as good. We're actively working on a solution to bring them into line with the diversification of the access accounts for existing lenders as well as new but the solution is technologically complex (although requiring no input from lenders) and will take some time to develop, test, and deploy. I deed, QAA and 30-day are well diversified. I think GBBA and GEIA are struggling because they are out of date. There aren't many new loans that can feed into them. Are we likely to see the rates for these two dropping closer to PSIA in near future? Yes - p2pindependentforum.com/post/213615/thread
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Post by davee39 on Sept 11, 2017 9:56:48 GMT
A big difference between the Assetz provision fund, and other lenders, is that some loan holders will be covered by the fund, whereas others will not. GBBA holders might take a different view on the best way to proceed with a delinquent loan, particularly if proposals vary with regard to timescales and potential losses.
My only MLIA loss, relating to the optician, drags on with a comment 12 months after bankruptcy that chasing for assets continues and there will be an update in six months. This seems to continue indefinitely. There must be a point where a loan can be declared irrecoverable both for (discretionary) provision fund & tax purposes even if there is a remote chance of further tiny recoveries.
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.....the only thing I would add is the most important word that everyone seems to ignore..... Discretionary .....so please use DPF and not PF.
