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Post by badger on Feb 24, 2014 10:04:06 GMT
Disappointed that I didn't get a reply to my question about who controls the provision fund. In the absence of a reply, I assume the directors of the PF are the same as the directors of Wellesley, who have "skin in the game". If that is the case, I think there would be a conflict of interests in the event of a serious downturn in the market.
Won't the FCA be looking at questions like this?
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bugs4me
Member of DD Central
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Post by bugs4me on Feb 24, 2014 11:35:08 GMT
Disappointed that I didn't get a reply to my question about who controls the provision fund. In the absence of a reply, I assume the directors of the PF are the same as the directors of Wellesley, who have "skin in the game". If that is the case, I think there would be a conflict of interests in the event of a serious downturn in the market.
Won't the FCA be looking at questions like this? Have you dropped them an e-mail direct? - that normally works in one way or another.
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Post by batchoy on Feb 24, 2014 12:09:50 GMT
From the lender agreement:
A little bit of DD then shows that Provision Fund Ltd has directors in common with Wellesley & Co Ltd.
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Post by wellesleyco on Feb 24, 2014 13:30:32 GMT
badger, we are really sorry for not responding sooner, we missed this comment.
I can confirm that Provision Funding Limited shares common directors with Wellesley & Co, and also Wellesley Group. The reason we chose to set up our provision fund in this way is a) by appointing an independent director it would incur cost which would inevitably impact our ability to offer high rates, b) we were concerned that it would create operational issues and impact our ability to pay out to customers quickly and c) this is somewhat of an industry standard set up with most (but not all) of the P2Ps using this structure. Having said this, we are not tied to the way it was set up and if our customers felt strongly about having an independent director run the fund I believe we would consider changing it accordingly. Please note however that the underlying issue with every provision fund is that they are all discretionary and as such cannot issue a guarantee to you. We view our provision fund as a nice addition to the Wellesley proposition however we view the security we hold over a property to be much more compelling, we only focus on making loans that are backed by a very liquid property and our average LTV is around 65%, therefore we feel that in the case of a default, we would be able to recoup our client money (and our own money) very quickly and successfully.
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