mary
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Post by mary on Sept 3, 2019 13:04:03 GMT
So, in the future, you have 3% with no fees, or 4 or 5% locked away forever until you wish to pay RS to access your money!
No thanks, I’ll be withdrawing as my existing investments mature (I’m assuming that I can do this without having to cash out prior to the change).
PS. I’ve seen plenty of marketing BS, but this is virtually chuck out everything you know about RS and start again.
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Post by Deleted on Sept 3, 2019 13:14:35 GMT
In all three markets, I wonder whether you will be able to set the reinvestment rate high so that it doesn't get lent and you can then withdraw those repayments (fee free as they're not invested). That looks like it may be possible as you can still set your own rates. It would be similar to how you can currently manage Rolling repayments.
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ashtondav
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Post by ashtondav on Sept 3, 2019 13:15:01 GMT
So if I have to sell to get funds out of the five year market will the selling costs remain the same? edit; just seen it’s 90 days interest at going rate so 5%/365*90, for example? So about 1.3% at 5% MR and about 1.5% at 6% going rate? So at 6% I can’t get above 4.5%, so would I not go for access at 4% - or even set a 4.5% rate in access?
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Post by Deleted on Sept 3, 2019 13:16:17 GMT
So if I have to sell to get funds out of the five year market will the selling costs remain the same? 1 and 5 year markets are staying the same so I take that to mean repayments coming in as now and 0.3% and 1.5% early access fees.
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Greenwood2
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Post by Greenwood2 on Sept 3, 2019 13:30:28 GMT
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for your investments in those products" and then that FAQ bit buried away elsewhere: "The 1 and 5 Year markets will be withdrawn for new investors and existing investors that don’t use them" So that's no change, except we're getting rid of them entirely?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? I expect in a few months time RS will say everyone loves the new products so much that all repayments from the old products will be diverted into your pick of the new products. There is obviously no future for the old products if new lenders can't use them. And when did RS Lenders become Investors? Isn't that misleading? Or are we no longer lenders with borrowers now being a 'single deep pool'?
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mark123
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Post by mark123 on Sept 3, 2019 13:32:42 GMT
I've not understood the bit about liquidity: "all investments in the new products will draw from a single, deep pool which increases liquidity."
My choice to invest in RS has always been a balance between the additional interest and the risk of a haircut or of platform failure.
I don't worry about a haircut. For me the certainty of a few percent more interest outweighs the chance of a few percent haircut.
I do worry about platform failure.
The old system AIUI is that bad loans leading to loss of investor confidence would result in reduction in the provision fund to 100% followed by an interest haircut followed by a capital haircut. This would hopefully be followed by rebuilding investor confidence and business as usual.
Under this old scenario, investors cannot sell out until investors return - we have to wait for the loans to be repaid.
How does this work when liquidity draws from "a single, deep pool"?
Does it mean that, if recession looms and haircut looks likely, twitchy investors can withdraw their investment funded by the provision fund?
If so, would that leave an empty provision fund for less-twitchy investors - meaning that self preservation is best served by cashing out on the first sign of trouble and that platform failure would inevitably follow?
Changes over the last few years seem to me to have made platform failure less likely, so I guess that RS have thought this through and I have misunderstood. I would be grateful for comments from anybody who has understood better than me.
Thanks, Mark
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ashtondav
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Post by ashtondav on Sept 3, 2019 13:37:35 GMT
New t&c say clearly that for all products you can turn off reinvestment and redirect to holding account.
That makes sense, so there is no need to sell to release funds.
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69m
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Post by 69m on Sept 3, 2019 13:46:30 GMT
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? Indeed, for how long?
Regarding 1 Year and 5 Year, the FAQs state: "There is no change to these markets so rates will continue to respond to changes in supply and demand as now."
However, I suspect that RS is going to carefully manage supply and demand so that the legacy products get very little (if any) new business. After all, why would RS want to keep running two systems in parallel?
Instead of saying "There is no change to the existing 1 Year and 5 Year products", perhaps "There is no change to the existing 1 Year and 5 Year contracts" would have been more accurate.
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ceejay
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Post by ceejay on Sept 3, 2019 13:51:51 GMT
New t&c say clearly that for all products you can turn off reinvestment and redirect to holding account. That makes sense, so there is no need to sell to release funds. So how does that square with (from the FAQ): "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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liso
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Post by liso on Sept 3, 2019 13:56:49 GMT
New t&c say clearly that for all products you can turn off reinvestment and redirect to holding account. That makes sense, so there is no need to sell to release funds. Can you point me to the clause(s) where it says that please? I've looked and can't see it.
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Stonk
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Post by Stonk on Sept 3, 2019 13:57:51 GMT
There's a lot to take in here, and as usual with RS announcements there are many insufficiently explained details.
However, after a bit of a read-through, I am left with the following concerns.
(1) The issue of whether or not we can continue to use the 1 Year and 5 Year markets is cloudy.
It is stated that existing investors can continue to use them as long as they have an investment or an order. I do not want to irreversibly lose access to those markets in the case of intentionally temporarily or accidentally becoming uninvested (e.g., by an early repayment). If that were to happen, would it be an instant barring? Would I be able to ask RS for my access back? I am tempted to maintain a £10 order at an unrealistically high rate on each market, just to ensure the markets remain active for me.
(2) The Plus and Max appear to have a fee to release, no matter how long you have been investing -- even if it has outlived the life of any of the underlying loans. This is a big change. At present, you've always been able to avoid paying a fee by simply waiting for natural repayments. This will be quite a money-spinner for RS: for example, any money invested in Max is guaranteed to earn RS a fee of 90 days worth of interest at some point in the future. I can see why they would like this idea! They could almost book it as revenue from Day One.
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robski
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Post by robski on Sept 3, 2019 13:59:38 GMT
I never got how RS allocated loans to one of the markets as opposed to the others. So ignoring that
I guess the new queue is going to be sorted by % as now. If (my assumption is they will) they send all funds to the one big pot then they will virtually never (probably) lend to the max for example.
Assuming people dont attempt to dramatically undercut the 3/4/5%. Then you would expect most access to be around 3 to low 3s, only if they got to approaching the 4s would the next "grade" start to be lent, then it would need to approach the 5s to get to the max product.
I have read it all more than once and cannot figure out if 1 and 5 year will be available to invest in or in wind down.
If any competition were ever up for a reward for anti plain english RS would be in with a shout. How they manage consistently to write in English that is so open to interpretation and failure to get across a relatively simple message is beyond me.
If I cant achieve close to 6% without only minor cash drag I am out.
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ashtondav
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Post by ashtondav on Sept 3, 2019 14:21:09 GMT
New t&c say clearly that for all products you can turn off reinvestment and redirect to holding account. That makes sense, so there is no need to sell to release funds. Can you point me to the clause(s) where it says that please? I've looked and can't see it. Page 1 of additional t&c for 1 year and five year market investors. Can’t do the formattin. In the 1 Year and 5 Year markets, capital and interest received can be reinvested either at Market Rate or at a rate you choose. Your reinvestment options for those products are summarised in the table below: Reinvestment Settings Options Initial investment 1 Year Market Reinvestment product options Access Plus Max 1 Year Market 5 Year Market Option to switch off reinvestment and return funds to holding Yes
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hendragon
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Post by hendragon on Sept 3, 2019 14:21:15 GMT
wouldn't it be very cynical to think RS might be vague about the forthcoming changes, leaving them the option to tweak them depending on investor/lender sentiment?
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sydb
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Post by sydb on Sept 3, 2019 14:28:42 GMT
Can you point me to the clause(s) where it says that please? I've looked and can't see it. Page 1 of additional t&c for 1 year and five year market investors. Can’t do the formattin. In the 1 Year and 5 Year markets, capital and interest received can be reinvested either at Market Rate or at a rate you choose. Your reinvestment options for those products are summarised in the table below: Reinvestment Settings Options Initial investment 1 Year Market Reinvestment product options Access Plus Max 1 Year Market 5 Year Market Option to switch off reinvestment and return funds to holding Yes You just wrote it. That applies to 1yr and 5yr investments. Not the new rolling. You can't automatically redirect rolling capital repayments into holding account now and you won't be able to under the new structure.
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