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Post by valueinvestor123 on Nov 17, 2019 14:41:39 GMT
In the (unlikely) event of Assetz going into administration, how will the investors be treated in all these various accounts?
At the moment, investors in accounts other than MLIA get some protection (from Assetz itself), however should it go into admin, will the same protections be applied? Or will all investors across multiple accounts be treated the same? (For example, will investors in loans in the Quick Access account wait the same amount of time as the investors in the same loans in the MLIA account).
I understand that accessibility is purely dependent on liquidity but in the event of admin, liquidity is not a given.
The complex structure always gave me pause for concern.
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ceejay
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Post by ceejay on Nov 17, 2019 17:07:25 GMT
In the (unlikely) event of Assetz going into administration, how will the investors be treated in all these various accounts? At the moment, investors in accounts other than MLIA get some protection (from Assetz itself), however should it go into admin, will the same protections be applied? Or will all investors across multiple accounts be treated the same? (For example, will investors in loans in the Quick Access account wait the same amount of time as the investors in the same loans in the MLIA account). I understand that accessibility is purely dependent on liquidity but in the event of admin, liquidity is not a given. The complex structure always gave me pause for concern. Tricky question, but I'm not sure it's one worth spending a lot of time on. For starters, why did this hypothetical administration occur? If, for example, it were the result of a lot of loans going bad resulting in a loss of confidence and flight from the platform, then you might well imagine that any PF would have been used up by the time the rockets went up. OTOH, if it were because of seriously failings in the operation of the platform, then you could conceivably find a Collateral-style mess that the administrators take ages just trying to unravel. IMHO the bottom line is that, no matter what plans might supposedly be in place, there is a good chance that in the case of administration then you would have to wait quite a while to get not all of your money back. That is the nature of any investment in almost any (non FSCS) product. So, if you think there is a significant chance of administration then the remedy is simple - withdraw completely, now. (For the record, I don't think this and I'm staying in). However, if you think the chance of administration is merely very small (can't be zero) then the remedy is not to invest more in one platform than you could afford to take a significant hit on. Indeed, given the risk of cross-platform contagion, you probably shouldn't have more in P2P altogether than that. These principles hold for any P2P product, and many others beside.
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Post by valueinvestor123 on Nov 17, 2019 17:12:38 GMT
With a number of P2P sites going bust, I don't think this is a strange question to ponder about but...
My concern is basically underpricing/obscuring risk: the various accounts (and different levels of interest paid in each) would only be applicable, as long as Assetz is operational. In case of a wind down, I assume all investors among all accounts would be consolidated and reclassified as if everyone was invested in the MLIA. Surprised FCA (or whoever) doesn't see a problem with this (eg mis-selling type of thing).
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p2pfan
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Full-Time Investor
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Post by p2pfan on Nov 17, 2019 22:00:24 GMT
With the number of P2P platforms going into administration and the likelihood of there being many more in the coming months, this is a very wise question to ask.
Anybody handing over their hard-earned money to P2P platforms needs to pay the highest focus to what will happen in the case of administration.
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michaelc
Member of DD Central
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Post by michaelc on Nov 17, 2019 22:13:27 GMT
In the (unlikely) event of Assetz going into administration, how will the investors be treated in all these various accounts? At the moment, investors in accounts other than MLIA get some protection (from Assetz itself), however should it go into admin, will the same protections be applied? Or will all investors across multiple accounts be treated the same? (For example, will investors in loans in the Quick Access account wait the same amount of time as the investors in the same loans in the MLIA account). I understand that accessibility is purely dependent on liquidity but in the event of admin, liquidity is not a given. The complex structure always gave me pause for concern. Never say unlikely! I would say anything is possible and given no less than three platforms have collapsed recently in a benign property market what would happen if that changed and prices suddenly plummeted ?
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Post by valueinvestor123 on Nov 18, 2019 0:13:46 GMT
I didn’t want to be accused of perpetuating mass-panic..  |
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Post by jevans4949 on Nov 18, 2019 10:34:28 GMT
Somebody else raised the issue in the case of one of the recently failed companies.
Suggestion was that administrator's primary obligation is to the shareholders of the company, and they have little obligation to the p2p lenders.
Probably the principal hope would be that the administrators would sell the loan book to another P2P company. This would depend on whether there was any value in administering the loan book through the rundown period, and/or the lenders' mailing list - at a time when faith in the p2p concept was failing.
Theoretically, our loans are with the borrowers, so we would have recourse to them, but only the administrators would have a record of who was owed what. It would probabaly not be worth an individual pursuing the matter unless they had a 5-figure sum in one or more of the loans, and could prove it.
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