rscal
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Post by rscal on Sept 3, 2019 12:11:22 GMT
The new products
Investment products are often complex with inconsistent outcomes, which can put people off investing. We believe good products are simple, with a consistent experience. With Access, Plus and Max we are keeping the best features that you are used to, including the ability to set Your Rate, while making the products even more consistent, liquid and easy to use.
Going Rate: The new products will have a market rate which, rather than being based on a trailing average, will be provided by RateSetter. This is for two reasons: firstly, it will mean market rates that are more predictable and secondly because it gives RateSetter the control to ensure the rates do not become uncompetitive for the low risk lending we target. Any change to the Going Rate will be notified in advance in the monthly statement*. There is no change to the ability for investors to set their own rate in order to try to outperform the Going Rate or undercut it to lend quicker. Reinvestment: The new products will automatically reinvest until you want to withdraw. This makes the products simpler and ensures that your investment is always earning, provided it is matched to loan contracts. Importantly, it also provides consistency of liquidity for all investors because access to your money is always provided by the entire portfolio instead of individual loans with different repayment profiles.
*So have that feature switched on assuming RS doesn't do it for you.
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rscal
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Post by rscal on Sept 3, 2019 12:14:20 GMT
I don't understand how this is mean to work (for lenders, that is). With rolling reinvestment won't it require the automatic triggering of a fee to withdraw? Have I got that bit wrong?
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st182
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Post by st182 on Sept 3, 2019 12:17:45 GMT
I've just read this too. Do we think the 1 and 5 year will be next for the high jump? If so, i think, I'm out.
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:19:47 GMT
I don't understand how this is mean to work (for lenders, that is). With rolling reinvestment won't it require the automatic triggering of a fee to withdraw? Have I got that bit wrong? AIUI, your current contracts will be considered as 'access' and, as per your table above, won't attract a fee. These changes look ok to me at first glance. They're not withdrawing the ability to set your own rates, and not getting rid of 1yr/5yr. What this will do is slightly reduce the cliff-edge of liquidity that could occur if, for whatever reason, everyone decides to try and withdraw at once from Rolling. Gotta be a good thing. I see no reason to disbelieve that improving liquidity is the driver here. Esp. relevant in these turbulent times..
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invester
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Post by invester on Sept 3, 2019 12:22:05 GMT
Being quite cynical I think the two systems will run alongside each other for some time, and then the rolling/1/5 year ones will simply be retired.
The stuff about 'consistent' experience is bollox I feel, from a borrower point of view there would be no difference and most investors do not mind how the current market rate works.
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:24:53 GMT
Being quite cynical I think the two systems will run alongside each other for some time, and then the rolling/1/5 year ones will simply be retired. The stuff about 'consistent' experience is bollox I feel, from a borrower point of view there would be no difference and most investors do not mind how the current market rate works. Yeah, but they would mind if a lot of people suddenly wanted to withdraw money at once and weren't able to. Whilst if people are to various extents dis-incentivised from doing so, it will hopefully make a sudden large drop in demand more easy to cope with. Some investors will chafe at paying to exit (have opted for plus/max) and decide to hold on instead. It's kinda similar to Assetz's 30D/90D QAA - except better IMV I think, as you can still ultimately take the hit and withdraw nearly straight away with these products. edit: re: market rate, I think it'll make little difference - in a way this is just reality catching up, it was never working properly as a market rate anyway, this at least makes this transparent.
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tyrex
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Post by tyrex on Sept 3, 2019 12:32:31 GMT
I'm mainly in the 5 year market.
Do I understand correct in that sending repayments to holding account will be removed, thus leaving RYI as the only option for withdrawal and incurring a forced fee as a result? Will I no longer be able to run down my investment gradually fee-free?
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:35:19 GMT
I'm mainly in the 5 year market. Do I understand correct in that sending repayments to holding account will be removed, thus leaving RYI as the only option for withdrawal and incurring a forced fee as a result? Will I no longer be able to run down my investment gradually fee-free? No that's not correct, nothing changes with 5 year. "Our existing products and features There is no change to the existing 1 Year and 5 Year products. They continue as they are and nothing changes for your investments in those products. The Rolling product will be re-named Access, with the only effective change being the move to Going Rate. You will see some updated functions in your online account in line with the new products."
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69m
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Post by 69m on Sept 3, 2019 12:37:46 GMT
Not impressed by this (from the FAQs):
Can I withdraw by taking repayments to my holding account?
The repayments that you receive from borrowers will be automatically reinvested so you will need to release your investment in order to withdraw.
There is no option to take repayments directly to your Holding account. This makes liquidity consistent for all investors.
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tyrex
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Post by tyrex on Sept 3, 2019 12:44:31 GMT
I'm mainly in the 5 year market. Do I understand correct in that sending repayments to holding account will be removed, thus leaving RYI as the only option for withdrawal and incurring a forced fee as a result? Will I no longer be able to run down my investment gradually fee-free? No that's not correct, nothing changes with 5 year. "Our existing products and features There is no change to the existing 1 Year and 5 Year products. They continue as they are and nothing changes for your investments in those products. The Rolling product will be re-named Access, with the only effective change being the move to Going Rate. You will see some updated functions in your online account in line with the new products." Ahh got you, thank you. Should have read more carefully, I thought Access/Plus/Max replaced all three of the existing markets.
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:46:19 GMT
Not impressed by this (from the FAQs):
Can I withdraw by taking repayments to my holding account?
The repayments that you receive from borrowers will be automatically reinvested so you will need to release your investment in order to withdraw.
There is no option to take repayments directly to your Holding account. This makes liquidity consistent for all investors.
That doesn't sound great does it, as it sounds like you're always going to have to pay a fee for the plus/max products as your money will effectively never amortise away. Also from that page: "If you have an active investment or order in any market you will be able to continue investing in that market as normal. The 1 and 5 Year markets will be withdrawn for new investors and existing investors that don’t use them"
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ashtondav
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Post by ashtondav on Sept 3, 2019 12:46:32 GMT
oh hang on “to reinvest in a different product you will first need to release your investment to your holding account”
so you can’t direct repayments on say the 5 year market to your holding account. You have to sell loans to release funds to holding? Correct?
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bigfoot12
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Post by bigfoot12 on Sept 3, 2019 12:49:30 GMT
Being quite cynical I think the two systems will run alongside each other for some time, and then the rolling/1/5 year ones will simply be retired. Yes, from the FAQ:
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:50:36 GMT
Can’t you send repayments to rolling and then withdraw at no Cost? Doesn't look like it: "The repayments that you receive from borrowers will be automatically reinvested so you will need to release your investment in order to withdraw. There is no option to take repayments directly to your Holding account. This makes liquidity consistent for all investors" It would still be free to RYI from Access though, but as I mentioned above it looks like you're always going to pay for Plus/Max by the nature of the product. Bit rubbish, that.
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r00lish67
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Post by r00lish67 on Sept 3, 2019 12:55:06 GMT
Being quite cynical I think the two systems will run alongside each other for some time, and then the rolling/1/5 year ones will simply be retired. Yes, from the FAQ: Seems a bit disingenuous to have just this in the headline document they've linked to: "There is no change to the existing 1 Year and 5 Year products. They continue as they are and nothing changes for your investments in those products" and then that FAQ bit buried away elsewhere: "The 1 and 5 Year markets will be withdrawn for new investors and existing investors that don’t use them" So that's no change, except we're getting rid of them entirely? Isn't that a bit of a change? And as an existing 5 year investor, can I actually buy new 5yr contracts from October? If I can, then for how long?
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