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Post by bernythedolt on Oct 4, 2019 20:50:08 GMT
Regarding this month's significant scheme change (introduction of Access, Plus & Max), Ratesetter states, “The improvements will increase the consistency of performance, increase the liquidity of your investments and make managing your money even easier.”
Taken in turn,
1. Consistency of performance. I’m struggling with this one. The previous performance was exactly as expected and seemed perfectly consistent to me, so I consign this to the “marketing spiel” dustbin.
2. Increased liquidity. This must surely be taken with a pinch of salt. RS talk of a “deeper pool” from which cash-ins can now be taken. Even if this “deeper pool” has now doubled in size (let’s say), then the number of defaults within it, and the number of cash-in requests, can both reasonably be assumed to double in size too. In any case, nobody has ever suffered any significant liquidity shortfall. The net effect on any particular lender surely remains neutral, and no better than it was before.
3. Money management becomes easier. Really? What this translates to is, “leave your money invested with us permanently (or face a withdrawal fee in our two new queues), and sit back because we’ve removed any choice over contract length, as well as the potential to snipe a good interest rate by active management”. In addition, “you can no longer elect to have repayments directed to your holding account in any reasonable manner”. In summary, this amounts to sit back and leave it all to us, in exchange for a slightly lower overall rate of return.
These new “benefits” to lenders seem to me tenuous at best.
There is also a distinct lack of transparency now about exactly how RS allocates loan requests to the three separate lender queues (Access, Plus and Max).
This all implies there’s more to gain for RS in this new scheme than they’re admitting to. They would obviously try to dress it up as a benefit to lenders, but I’m afraid they’ve so far failed to convince me personally.
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reinvestor
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Post by reinvestor on Oct 4, 2019 21:34:03 GMT
I lost my trust in RS some time ago. For me they were the best player in the p2p market and my only foray into this form of investment.
After the whole VC, VS AP debacle I decided to delve a bit deeper and I looked st their backers and the backers of their backers and then Woodford cropped up and he is the kiss of death in the current market. That was the icing on the cake for me.
Where is the provision fund invested??? How liquid is it? Ask Neil?
Regarding the VC,VS situation, a companies house search for previous directors is very interesting and I’m still not convinced RS have allowed anything like the true bad debt figure on their books for the losses that these companies have accrued that they should have.
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johni
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Post by johni on Oct 5, 2019 11:00:28 GMT
Absolutely being hoodwinked the only winners are Ratesetter with a bigger profit. Same amount of available funds to withdraw as yesterday. Same size protection fund. Only difference is Ratesetter now give a lot lower rate for an increased risk. I think in 6 weeks time there will be another change same as the last bungled changes. When withdrawals start to come through and lenders dry up. I think ratesetter have forgotten it is the lenders that make them money not the borrowers. Without us the whole business folds.
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Stonk
Stonking
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Post by Stonk on Oct 5, 2019 11:34:41 GMT
Ahh, but the question is: will lenders withdraw their funds?
I'm sure we savvy lot on here are minded to do so, but we are a puddle in the ocean.
Despite RS's best efforts at trying to stifle the relationship between supply and demand -- in particular the change to a Market Rate calculated over such a lengthy time period that it hardly ever changed, and now the semi-fixed Going Rate -- ultimately supply vs demand will prevail.
I suspect that for a long time now there has been enough lender money to justify lower rates, and that actually the 30-day Market Rate calculation had been keeping rates artificially high, particularly on the 5 Year market. Time will tell. If Max continues to match at 5% and just below without significantly breaking through, then that says there are enough people happy to lend at 5% to meet the borrower demand.
A different question entirely is whether those who are lending at 5% are sufficiently aware that they could potentially get higher rates: something that RS recently has been intent on hiding from them. I would say that RS has sought to reduce rates by reducing lender informedness, rather than by fiddling with the products (which alone would fail). I suspect most lenders who were previously investing at 5.5% (just because it was the MR) will now invest at 5.0% (just because it is the GR), without even thinking about it. Not us, of course!
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trium
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Post by trium on Oct 5, 2019 15:16:17 GMT
From "Introducing our new investment products" email:
As with Zopa some time ago, RS want to grow their business by competing in the lucrative (for them) prime market lending to top-rated borrowers at rates which lenders are not typically prepared to offer. P2P investors are by nature risk-takers in that they will pursue the highest rates rather than the safest borrowers. So long as lenders are allowed to cherry-pick markets or set their own rates loans to those prime borrowers will not be funded. The interests of the platform are not aligned with those of investors, so the platform has to take more control.
Sign of the times, I'm afraid. Rates have been falling for years. Platforms are having to pressure/persuade/hoodwink their lenders into providing more money at lower rates to drive their business ambitions.
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ceejay
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Post by ceejay on Oct 5, 2019 15:29:09 GMT
From "Introducing our new investment products" email: As with Zopa some time ago, RS want to grow their business by competing in the lucrative (for them) prime market lending to top-rated borrowers at rates which lenders are not typically prepared to offer. P2P investors are by nature risk-takers in that they will pursue the highest rates rather than the safest borrowers. So long as lenders are allowed to cherry-pick markets or set their own rates loans to those prime borrowers will not be funded. The interests of the platform are not aligned with those of investors, so the platform has to take more control. Sign of the times, I'm afraid. Rates have been falling for years. Platforms are having to pressure/persuade/hoodwink their lenders into providing more money at lower rates to drive their business ambitions. Can't argue with your analysis ... but it begs the question as to whether using retail funders (like us, in a P2P model) has any future at all for RS and other likeminded platforms. Should RS not just bite the bullet and admit that they are heading towards simply being a bank, and get their funding either wholesale or, heaven forbid, as FSCS-backed savings?
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Post by bernythedolt on Oct 6, 2019 11:37:26 GMT
Should RS not just bite the bullet and admit that they are heading towards simply being a bank, and get their funding either wholesale or, heaven forbid, as FSCS-backed savings? It is beginning to feel like a bank or building society now, offering a fixed 3% (plus the option of an added bonus and withdrawal penalty if you choose our Plus or Max account)... but a bank absent FSCS. Hence I've been moving the lion's share of my portfolio to safer territory. Almost there now. The rates now achievable in RS, since the change, no longer justify the risk.
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Post by faraday815 on Oct 11, 2019 17:54:07 GMT
Should RS not just bite the bullet and admit that they are heading towards simply being a bank, and get their funding either wholesale or, heaven forbid, as FSCS-backed savings? I've been moving the lion's share of my portfolio to safer territory. Almost there now. Where do you recommend?
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upperdeane
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Post by upperdeane on Oct 11, 2019 20:58:41 GMT
I've been moving the lion's share of my portfolio to safer territory. Almost there now. Where do you recommend? Yes, suggestions please. I'm struggling to find anything decent in terms or return for regular safer types of investment.
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Post by bernythedolt on Oct 12, 2019 8:42:47 GMT
You obviously have to accept that 'safer' equates to a lower rate of return, and the rate/risk level is always a personal choice.
It's very easy to get a perfectly safe, FSCS-backed 1.5% at the moment. For me personally, and set against that, a fixed Access rate of 3% is no longer sufficiently attractive.
I don't think any of us can recommend what others do though - it has to remain a personal choice!
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r00lish67
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Post by r00lish67 on Oct 12, 2019 8:55:19 GMT
You obviously have to accept that 'safer' equates to a lower rate of return, and the rate/risk level is always a personal choice. It's very easy to get a perfectly safe, FSCS-backed 1.5% at the moment. For me personally, and set against that, a fixed Access rate of 3% is no longer sufficiently attractive. I don't think any of us can recommend what others do though - it has to remain a personal choice! upperdeane faraday815 as per my other thread, you could try the FSCS Investec Notice Plus account at 1.8% interest. If you want (higher risk) P2P then you could have a look into Assetz Capital if you are not already with them. Their Quick Access Account offers 4.1% interest, or with 90 days notice 5.75%. Plus a welcome bonus offer ongoing at the moment of £150 for a £5k investment, which can also be combined with being referred by a friend for a further £50 too. DYOR, obvs.
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sussexlender
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Cheat seeking missile
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Post by sussexlender on Oct 12, 2019 14:05:13 GMT
Hargreaves Lansdown have a cash account called Active which has various rates over various terms.
I recently obtained 2.15 % for 6 months with the FSCS guarantee up to the full £85,000.
You need to be an account holder with HL via their standard share account, ISA or SIPP (and SIPP Drawdown).
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travolta
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Post by travolta on Oct 12, 2019 15:57:19 GMT
I have to say that Ablrate has been very good to me.... but the risks are high.
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macq
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Post by macq on Oct 12, 2019 16:16:43 GMT
Hargreaves Lansdown have a cash account called Active which has various rates over various terms. I recently obtained 2.15 % for 6 months with the FSCS guarantee up to the full £85,000. You need to be an account holder with HL via their standard share account, ISA or SIPP (and SIPP Drawdown). people might want to check but at One time you could open Active but without having One of the other accounts
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coogaruk
Hello everyone! Anyone remember me?
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Post by coogaruk on Oct 13, 2019 10:36:10 GMT
Hargreaves Lansdown have a cash account called Active which has various rates over various terms. I recently obtained 2.15 % for 6 months with the FSCS guarantee up to the full £85,000. You need to be an account holder with HL via their standard share account, ISA or SIPP (and SIPP Drawdown). Tempting as I find that option from time to time, I prefer to be a bit more proactive with my cash
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