kevinkelly
Member of DD Central
Posts: 96 
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Post by kevinkelly on Dec 23, 2014 18:45:24 GMT
Not quite so welcome as the cake, was the line "we will need to introduce some lender fees" towards the bottom of today's letter. Obviously we will need to look carefully at how (expensive?) this works out and the effect it has on our investments, but I just wanted to say that this is not welcome news here and may well lead to at least some of my investment(s) being taken elsewhere. For me one of the attractions of this platform has been the lack of cake slicing so I may well need to look elsewhere for my cake next year. Just sayin'....  |
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johnfleet
Member of DD Central
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Post by johnfleet on Dec 23, 2014 20:03:51 GMT
My thoughts exactly and rather an underhand way in which to proclaim this intention I thought. My money will be going elsewhere I suspect if/when they do introduce such fees...
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Post by rugbylad on Jan 2, 2015 14:17:58 GMT
Interesting point of view, not sure how it can be considered underhand as notice has been given in the correspondance.
As an investor across several platforms (as well as being a Commercial Loan Broker) I pay fees as a lender, and still get a decent return, ReBS providing quite a good return.
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Post by 4thway on Jan 2, 2015 19:00:56 GMT
My current view is that it doesn't make sense to focus on lending fees any more than it does for an investment fund investor to focus solely on annual management charges. If your money is being invested/lent and a return is being made off that money, all the return is yours, minus all the costs and expenses in getting that return. I'll make that a bit more clear with an example. Consider three P2P lending companies with identical propositions except how they charge. Borrowers at all three pay, on average 10% APR. (Since it is "APR" it includes both the interest and all fees paid by the borrower.) The three companies' charges are as follows: Company A charges borrowers only. It charges two percentage points on average. Company B charges lenders only. It, too, charges two percentage points on average. Company C charges borrowers and lenders. It charges an average one percentage point to each. In all three cases, we lenders will receive 8%. But do you really think that company A is cheaper for lenders than B or C? I think the borrowers borrow from us individual lenders, so they owe us everything. We lenders effectively outsource most operations of our little lending businesses to the P2P lending companies, so we owe them. Personally I think that's the only rational way to view things and it's comparable to what investors in investment funds think. I expanded on this theme myself in one of our articles: www.4thway.co.uk/candid-opinion/theres-no-such-thing-as-no-lender-fee/Neil |
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Post by GSV3MIaC on Jan 3, 2015 9:02:07 GMT
I agree too, only the (net) return really matters. I can live with lender fees, just don't make me pay them out of taxed income!
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kevinkelly
Member of DD Central
Posts: 96
Likes: 37
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Post by kevinkelly on Jan 4, 2015 11:30:49 GMT
The issue to me is really quite straightforward.
2014 - no lender fees.
2015 - lender fees introduced
That's a fundamental change to the status quo that may or may not affect my willingness to lend on this platform since it may or may not negatively impact on my investment return.
I'm quite deliberately not commenting on the rights or wrongs of lender fees, as that is not a debate I wish to open or participate in at this point in time. I am simply highlighting the change in policy.
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