kaya
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Post by kaya on Dec 7, 2017 16:51:20 GMT
At 1% annually of the amount invested, the fees can amount to a significant proportion of your returns. For example there are effectively 20% fees for an investment made at 5%.
This may be hindering investment, and a more balanced and proportionate structure might be, say, a 10% levy on actual returns.
Do the fees bother/hinder/affect your investment decisions?
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mary
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Post by mary on Dec 7, 2017 17:02:05 GMT
At 1% annually of the amount invested, the fees can amount to a significant proportion of your returns. For example there are effectively 20% fees for an investment made at 5%. This may be hindering investment, and a more balanced and proportionate structure might be, say, a 10% levy on actual returns. Do the fees bother/hinder/affect your investment decisions? Yes. Although I am signed up, I have not invested at all. The returns, after fees, are generally too low for the term of the investment for my liking. I am currently preferring RS 1 year at above 5% and ArchOver at 6.5-8% (each are fee free to lenders, which is definitely my preferred model).
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macq
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Post by macq on Dec 7, 2017 17:40:02 GMT
in some ways the fee is high which is why probably the loans with a higher rate seem to go quicker as people still make a good return.WiseAlpha are somewhere between a Bond fund & P2P so unlike other platforms they can't charge the borrower or hide the fee in the rate by holding some back.Unfortunately for them if a bond is only offering 4%-5% how do they make money to run the platform without charging a fee.If you was to buy these bonds from a broker i would guess you would pay a dealing fee up front or a fee to a fund manager(but perhaps with more chance of growth)
It could be a worry as to how they grow the company but guess they will mention there smart invest product is fee free so hopefully they can do something with the manual loan notes
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jaswells
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Post by jaswells on Dec 7, 2017 22:21:55 GMT
If you made a straight comparison between RS (5% to unsecured borrower with unknown history) to WA (4-5% after fees as a secured financial product to profitable asset rich large corporation) its a no brainer that WA is a safer more 'wise' investment. However as a straight bet based on the assumption there is no way you will lose money on both a rational investor may well and indeed do often choose p2p. 12%-13% seems more realistic for p2p but the established companies offering this are now teetering under the weight of defaulting loans (LY,FS)
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beh
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Post by beh on Dec 8, 2017 18:53:16 GMT
I don't think 1% is too bad but, as others have said, it does put me off buying any bonds at <5%.
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mary
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Post by mary on Dec 8, 2017 19:33:12 GMT
If you made a straight comparison between RS (5% to unsecured borrower with unknown history) to WA (4-5% after fees as a secured financial product to profitable asset rich large corporation) its a no brainer that WA is a safer more 'wise' investment. However as a straight bet based on the assumption there is no way you will lose money on both a rational investor may well and indeed do often choose p2p. 12%-13% seems more realistic for p2p but the established companies offering this are now teetering under the weight of defaulting loans (LY,FS) Got 5.8% today on RS, and with a PF, me thinks this is still a better bet. But any black swan event and both will likely be in trouble.
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