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Post by Yorkie on Mar 11, 2014 10:53:13 GMT
With respect to the experiences shared by Yorkie, please accept our apologies if a member of our team sounded dismissive, I can assure you that we only hire the most charming of people and as such it must have been an off-day for her. Apologies accepted. We all have off-days from time to time.
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Post by Yorkie on Mar 11, 2014 11:22:07 GMT
I can totally understand why it is unsettling to see funds sitting there un-lent however please rest assured that we want more funds and these short periods where we carry excess cash really are symptomatic of out business model. We monitor the cost of paying interest on un-lent funds very closely and assure you that if we were concerned about the viability or short term cash flows we would not continue to market ourselves on google, moneysupermarket.com and other such places. ..... Therefore, we decided to add one extra feature to the algorithm which is that during the same weekly process, we will also re-match existing customers. This will work by un-matching every customer from every loan and then re-matching them back to the new, larger loan book. We believe that this not only gives our lenders the best diversification, it also gives them improved diversification as our loanbook grows. As we have taken the opportunity to mention this early, i would be grateful for any comments or questions. Thank you for your quick and comprehensive reply, which does address my concerns to a large degree. Obviously it is very important for Wellesley as well as its investors that the company is viable. Personally, I would accept a slightly lower interest rate if that means the business model is more sustainable, rather than a higher rate but the company going bust! The fact that you have felt it necessary to lower the one month rate quite dramatically shows that you are prepared to take action where required to ensure the business is viable. That is good to see. I have a question regarding the extra feature to the algorithm which re-matches existing investors (un-matching every investor from every loan and then re-matching them back to the new, larger loan book). Will this occur every week? Keeping track of all the fund movements over months or years would create an administrative headache (for Wellesley, not for me) even worse than Zopa's. I guess I am different to most in that I prefer to spread my funds over fewer, larger investments rather than lots of small ones. The rationale being that the chance of any one of these few, high-value investments going wrong is smaller than the chance of any one of many, low-value investments going wrong. The amount of time and effort required to chase after an investment gone wrong is the same regardless of whether it is small or large, so I prefer few, large investments rather than many, small investments. Since the investment is secured against property, I should get the funds back anyway, so I rather have few, large investments running a smaller chance of something going wrong (unless the whole company folds, hence the reason for starting this thread). If you are going to introduce maximum diversification through this re-matching algorithm, I will probably not be investing more and may pull out of Wellesley altogether; the model operated by LendInvest better suits my approach to risk. Can an investor opt out of this re-matching algorithm?
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shimself
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Post by shimself on Mar 11, 2014 12:09:26 GMT
I had some email correspondence with Wellesley earlier, my concern being that I had no record of which borrowers owed me what (somewhat the antithesis of p2p), when they previewed this weekly resorting to me. Which would be an improvement over the status quo where my (couple of K) are spread over just a couple of borrowers, so somewhat vulnerable to default (or recourse to the guarantee fund, which is in turn vulnerable to wellesley's profitability). So yes I like being spread over lots of borrowers. I gather the weekly resorting is to do with their having lots of bridging loans business, which are of course for just a few months, so your money would have to be reloaned out quite frequently anyway. I think there's still a prize waiting for someone to think of a better way.
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shimself
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Post by shimself on Mar 11, 2014 12:13:09 GMT
It has also been seen on this thread that some people have been matched quickly and others have had money sitting un-lent for perhaps a month and i feel that it is important to explain how our software works at present. When we assign our P2P lender funds against loans it is a semi-manual process whereby we spread the funds across as many loans as we have available on the given day. However as this is a manual process we do not have an order priority process which explains why one investor can have funds still un-lent and a more recent investor will see all funds fully matched. Can I suggest that you should sort this manual process in the interim, so as to make sure that every lenders funds are allocated within a few days?
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markr
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Post by markr on Mar 11, 2014 12:39:24 GMT
Can I suggest that you should sort this manual process in the interim, so as to make sure that every lenders funds are allocated within a few days? Agreed. I'd assumed as my funds weren't being lent, no one's were. Had I known I was just "unlucky" to have been skipped over a few times in the matching process, I'd have been less concerned I think.
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Post by wellesleyco on Mar 11, 2014 12:51:45 GMT
Thank you to everyone who has responded. Here are some answers to the latest questions: westcountryfunder, yes the new re-matching tool will include all historic and future loans. It is also our intention to absorb the cost of the debit card processing fee as I recognise that adding a charge makes the use of the function prohibitive. We have spoken to three providers of debit card processing and the first two wanted to charge unbelievable amounts of money whereas the provider we are speaking to now is much more reasonable because they are the ultimate clearer as opposed to being an agent. oldgrumpy, thank you for your positive comments and ongoing interest in our business. markr, that makes sense and if you ever wish to discuss this with us we would be more than happy to help. Yorkie, thank you so much and we appreciate you having created this post in the first place, we value these types of positive discussions on forums immensely. With respect to your point about rates, I believe we are paying slightly more than we need to however we are a new player and need to demonstrate value. That being said, we watch our business projections like a hawk and we are confident that our business model is not only viable, it will be very successful. To touch upon your questions relating to the new algorithm, yes I can confirm that this will happen once per week (the day of the week is still to be decided however I think that Sunday is a natural day to choose). To explain how we will keep on top of all of the changes in assignment, this is actually exceptionally easy. We have a very large server (and back-up server) that stores all historic data and also the current assignment information. The flow of money is easy because it can be done at an aggregate level. The point you make about preferring to be exposed to one single loan, I actually agree with and it is the reason why we did not come up with this type of diversification functionality in the first place, that being said, there is a huge customer demand for this to the extent that it is the most commonly asked customer question at Wellesley & Co and as such we are responding to customer demand. Yes, you can ask us to opt you out of the auto-matching process and we would happily match you against one loan, and all of our loans are what I would describe as high quality (65% LTV, easily sold, first charge, residential, non-owner occupied). MONEY, thank you for your positivity, I am confident in our systems. We have outsourced all of our platform technology to a well-established, English company that I have a lot of faith in. Needless to say, a lot of testing happens before we make changes like this. shimself, thank you for your comments and for investing through our platform. The change that we have planned will show you the loan number, amount of the loan you are matched to, and similarly you will also see your historic assignments in the history section. To run this process manually we take an enormous amount of time to do and our time would be better spent testing the new system to ensure that it works correctly. Please note however that it is a major priority for us. Kind regards Wellesley & Co
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Post by Yorkie on Mar 11, 2014 14:25:35 GMT
Thank you to everyone who has responded. Here are some answers to the latest questions: ..... The point you make about preferring to be exposed to one single loan, I actually agree with and it is the reason why we did not come up with this type of diversification functionality in the first place, that being said, there is a huge customer demand for this to the extent that it is the most commonly asked customer question at Wellesley & Co and as such we are responding to customer demand. Yes, you can ask us to opt you out of the auto-matching process and we would happily match you against one loan, and all of our loans are what I would describe as high quality (65% LTV, easily sold, first charge, residential, non-owner occupied). Thank you. It appears that we are a small minority preferring a low number of high value investments. I appreciate that Wellesley have to listen to the majority who prefer many low-value investments because they perceive the risk to be lower (in fact, the risk is exactly the same, but the chance of any one investment going wrong is bigger the more pots you are invested in). Considering what you have said, I will leave my current investment and might add more, but first I need to see my current funds allocated to a loan. I may well be in touch to opt out of the auto-matching process if I invest more.
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Post by wellesleyco on Mar 12, 2014 7:08:51 GMT
Dear Yorkie, we understand that investors have different needs and goals and as such we appreciate your feedback. Delighted that you intend to stick with us however please remember that you can make an Early Access request through our platform which allows you to get your money back. There is no charge for this service however we do reduce your effective interest rate to the rate of interest that you would normally earn on the period that you had money committed running up to the request, other than that we place no restrictions on your cash. If the funds are un-lent then there would be nothing stopping an immediate withdrawal, if the funds are lent out, as normal the withdrawal would be subject to their being liquidity to release you from the loans that you are matched against. This being said, we would use our own capital to replace your funds if for some reason there were no new investors coming through the platform. We appreciate your comments on the risk. You are totally correct that using the portfolio approach the probability of being matched against a loan that subsequently defaults does increase, however it should also be noted that the consequences of one loan defaulting also is less and as such i believe that this is why many of our customers have a natural preference to spreading their money across all loans. As mentioned, we can accommodate either practice. I do however totally understand that your view is that you would rather just chase one defaulting party rather than a number of parties. Please note however that regardless of either methodology, I somewhat see us recovering losses on behalf of our customers as being hopefully the worst case scenario. As mentioned on other areas of this forum, we are the only p2p lender to use its own capital for lending (and we have subordinated our rights to the loan security behind that of our customers' rights in the event of a default). Therefore, if one of our loans defaulted, in practice we would move the loan away from our customers (fully disclosed to the customer) by replacing their funds with our own funds. We would then go through the recovery process with the loan exposure on our own books. It is our honest intention that no customer ever loses a penny through our platform and whilst we are not able nor permitted to issue that as a guarantee, it is the way we intend to manage such a situation. kind regards Wellesley & Co
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shimself
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Post by shimself on Mar 12, 2014 11:11:51 GMT
shimself, thank you for your comments and for investing through our platform. The change that we have planned will show you the loan number, amount of the loan you are matched to, and similarly you will also see your historic assignments in the history section. To run this process manually we take an enormous amount of time to do and our time would be better spent testing the new system to ensure that it works correctly. Please note however that it is a major priority for us. Kind regards Wellesley & Co What I meant to suggest is that when you do your weekly matching you make sure to catch up with the oldest unmatched funds first; it can't be right that some amounts have been unallocated for over a week. If you don't easily know which funds haven't been matched, well you should and it shouldn't be onerous.
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Post by davee39 on Mar 12, 2014 18:27:26 GMT
I am very impressed by the detailed response on this forum. My current investment is tiny because of the diversity risk, knowing that the risk will be shared across the portfolio is encouraging. When I could get 5% from Building Societies I was happy to take it, but at current rates, and still liking to eat at regular intervals, a degree of risk has become inevitable.
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Post by wellesleyco on Mar 13, 2014 8:13:41 GMT
shimself, apologies I misunderstood. That makes sense, thank you.
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Post by chielamangus on Mar 13, 2014 19:17:47 GMT
May I suggest to Wellesley that any communications/announcements it makes to this forum are repeated on an information page/latest news on its own site. While I already knew some of this information (thanks to very helpful replies to my emails), it would be helpful if it were placed altogether on the official site. I missed these interchanges because I usually go direct to the Wellesley site rather than this forum where Wellesley are relegated to the small print at the bottom of the page.
I actually emailed Wellesley today about one point (the size of the loan book) which I now discover had already been covered here a couple of days earlier. It would save all of us time - fewer emails and fewer replies.
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oldgrumpy
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Post by oldgrumpy on Mar 13, 2014 19:25:35 GMT
May I suggest to Wellesley that any communications/announcements it makes to this forum are repeated on an information page/latest news on its own site. While I already knew some of this information (thanks to very helpful replies to my emails), it would be helpful if it were placed altogether on the official site. I missed these interchanges because I go direct to the Wellesley site rather than this forum where Wellesley are relegated to the small print at the bottom of the page. May I suggest to our arch-moderator that Wellesley, as a serious P2B lending platform, which communicates readily on this forum when topics are introduced, be promoted to the main page?
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Post by bracknellboy on Mar 13, 2014 19:52:56 GMT
OG: the board 'structure' was a topic of discussion by the admin a few weeks back. It is kept under review, and it was felt that we were not far of the point where a minor rejig would be in order. And we have rejected an explicit, but very polite, request from one platform to be "promoted".
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Post by Yorkie on Mar 15, 2014 13:41:17 GMT
My second investment has now also been allocated to a loan; about 5 weeks after making the funds available. Glad the funds are now working for Wellesley rather than sitting idle. Not sure yet whether I will add more.
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