jimc99
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Post by jimc99 on Feb 3, 2017 21:54:47 GMT
I have taken up the offer of RS to sell out my loans without paying the sell out fee. For information of others here is whats happened so far. Will update as things progress.
I have a 5 figure sum in the old 3 year market paying 5.7% with about 14 months to go and a 4 figure sum in the 1 year market paying 4.2%. I thought I would sell out my 3 year loans and keep my 1 year loans.
I phoned RS on the morning of the 2nd Feb and requested the above. They told me if I wanted to sell out I had to sell out all my loans in both markets. The money would be put into my holding account and I had to withdraw it all. My account would then be closed. If I wanted to carry on investing I would have to open a new account.
Seemed to me they were cutting off their nose to spite their face.....
Anyway after 36 hours nothing has happened and my monies are still invested......watch this space!!
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jonah
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Post by jonah on Feb 4, 2017 9:12:38 GMT
Thank you jimc99 you answered 2 out of my current 3 questions (could I select one market and not another, did this close my account). My third was around how true 'no fees' is, i.e. Does that include getting 100% of capital, earned and accrued interest? I would quite like to be out of 5year, but retain, 3 and rolling, so this is now less clear for me.
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Post by stevepn on Feb 4, 2017 10:09:40 GMT
If a lot of people ring up to get all their money back it could be the end of Ratesetter.
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mike
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Post by mike on Feb 4, 2017 10:18:04 GMT
I spoke to RS yesterday and requested the no fee sell-out of my loan book which is all in the 5 year market. They said my account would then be closed. I asked if I could open a new account at a future date and they were non committal on that. They didn't say how long this will take, I will feedback once it has happened.
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adrianc
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Post by adrianc on Feb 4, 2017 14:54:51 GMT
I spoke to RS yesterday and requested the no fee sell-out of my loan book which is all in the 5 year market. They said my account would then be closed. Seems fair. If you are objecting to a Ts & Cs change severely enough to want to exercise the exit clause, then closing your account really shouldn't bother you, right? Again, seems fair... After all, if you object that vehemently to the change, why would you want back in?
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hendragon
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Post by hendragon on Feb 4, 2017 17:40:34 GMT
Similar experience to Jim. I phoned on Friday, asked to cash out and was told it would need to be authorised by someone higher up. It will be interesting to see if RS will backtrack if enough people wan't out.
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Post by davee39 on Feb 4, 2017 17:40:35 GMT
If a lot of people ring up to get all their money back it could be the end of Ratesetter. No, it will all help. Most of the loans sold will be re-financed at lower rates freeing up working capital for RS or possible contributing to the provision fund. The reduction in investment should help restore some sanity to the 5 yr rate. Any shortage of lender funds can be compensated by institutional funding. The provision fund has always been discretionary, so there has always been a chance it would be unable to payout if depleted. I see this rule change as making this clear, but also a reaction to defaults exceeding expectations.
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elliotn
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Post by elliotn on Feb 5, 2017 8:23:40 GMT
I spoke to RS yesterday and requested the no fee sell-out of my loan book which is all in the 5 year market. They said my account would then be closed. Seems fair. If you are objecting to a Ts & Cs change severely enough to want to exercise the exit clause, then closing your account really shouldn't bother you, right? Again, seems fair... After all, if you object that vehemently to the change, why would you want back in? RS is still my largest p2p. I had invested in consumer lending and a PF that I was told RS would do everything in their power to maintain (otherwise there would be a platform resolution event). Now I am lending to sole traders, SMEs and on property loans as well, an arguably higher risk mix with a PF that will move to a more flexible model whose coverage has already been eroded, unpaid income accounted for and even sizeable defaults moved on-BS enhancing platform risk. So I will be closing my account (as the only option for fee free withdrawal) as this was not the model that I originally invested in. However, I would consider a more informed, materially lower, risk adjusted investment under the new T&Cs should they welcome any future return of my custom.
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Post by bricktop on Feb 5, 2017 11:50:19 GMT
I agree that RS should close your account and make you sell out everything. As adrianc said you're objecting to the change so no longer want to be a customer. It would make sense if there'should a 6 month rule in place or longer. Personally I'm staying in as I see no drama and it seems that only those who never understood the risk in first place will withdraw.
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mike
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Post by mike on Feb 5, 2017 12:00:38 GMT
I have no problem with the RS approach. I'm just reporting what they said. RS was my first entry into the P2P market four years ago. They no longer offer a good risk/reward imho.
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elliotn
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Post by elliotn on Feb 5, 2017 12:13:20 GMT
it seems that only those who never understood the risk in first place will withdraw. I'm a qualified financial professional and extensively researched p2p before investing primarily in RS some years back. I believe I fully appraised the initial risk but for me that has materially changed for the reasons I stated above. It would appear RS agree with me, hence their TCF offer and diasagree with your generalising (and somewhat dismissive) supposition. Edit - for avoidance of doubt, I have no problem if they wish to time or permanently bar me; if they were open to future investments then I would consider a risk adjusted investment based on the latest T&Cs alongside any other comtemporaneous opportunity.
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Post by bricktop on Feb 5, 2017 12:30:19 GMT
it seems that only those who never understood the risk in first place will withdraw. I'm a qualified financial professional and extensively researched p2p before investing primarily in RS some years back. I believe I fully appraised the initial risk but for me that has materially changed for the reasons I stated above. It would appear RS agree with me, hence their TCF offer and diasagree with your generalising (and somewhat dismissive) supposition. Edit - for avoidance of doubt, I have no problem if they wish to time or permanently bar me; if they were open to future investments then I would consider a risk adjusted investment based on the latest T&Cs alongside any other comtemporaneous opportunity. Yes it is generalising and dismissive - it was supposed to be. Most users here have never stopped to consider what happens if it goes wrong can I afford to lose my money and poorly invested. I can afford to lose money, hence I invest and will stay as long as i like the product and agree with the direction.
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mason
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Post by mason on Feb 5, 2017 12:59:03 GMT
Personally I'm staying in as I see no drama and it seems that only those who never understood the risk in first place will withdraw. I think most of those who leave will be doing so for reasons other than this specific change. I have been looking for a free exit for almost 2 years, but in the mean time have been content to let my loans run down naturally. I'll be reinvesting into platforms that offer loans at double or treble the rates available here and which do not have a provision fund. I've paid very little attention to RS recently, but even I can see a lot has changed since I last had an offer matched. Supply/demand has skewed rates to the point lenders are not being adequately compensated for the risk they are taking. These changes pave the way for margins on loans to be further squeezed so that rates offered to borrowers can be made even more attractive, with lenders taking an increasing responsibility for funding the PF out of their returns. At the same time, default rates are surging. Not to mention unexpected changes that have occurred in the broader economy. But there is no doubt, some who leave will have been ignorant of the risks initially; just as some who stay are still ignorant of the risks.
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Post by bricktop on Feb 5, 2017 13:38:52 GMT
Personally I'm staying in as I see no drama and it seems that only those who never understood the risk in first place will withdraw. I think most of those who leave will be doing so for reasons other than this specific change. I have been looking for a free exit for almost 2 years, but in the mean time have been content to let my loans run down naturally. I'll be reinvesting into platforms that offer loans at double or treble the rates available here and which do not have a provision fund. I've paid very little attention to RS recently, but even I can see a lot has changed since I last had an offer matched. Supply/demand has skewed rates to the point lenders are not being adequately compensated for the risk they are taking. These changes pave the way for margins on loans to be further squeezed so that rates offered to borrowers can be made even more attractive, with lenders taking an increasing responsibility for funding the PF out of their returns. At the same time, default rates are surging. Not to mention unexpected changes that have occurred in the broader economy. But there is no doubt, some who leave will have been ignorant of the risks initially; just as some who stay are still ignorant of the risks. Completely agree with your comments. I think RS have done the right thing in allowing sellout for free, the product has moved on in the last couple of years and that will make some uncomfortable and this is opportunity to exit. The choppy rates can be a concern for some and I see that, but diversity is key. All eggs in one basket is sorely underestimated by too many.
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elliotn
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Post by elliotn on Feb 5, 2017 13:54:32 GMT
Personally I'm staying in as I see no drama and it seems that only those who never understood the risk in first place will withdraw. I think most of those who leave will be doing so for reasons other than this specific change. I have been looking for a free exit for almost 2 years, but in the mean time have been content to let my loans run down naturally. I'll be reinvesting into platforms that offer loans at double or treble the rates available here and which do not have a provision fund. I've paid very little attention to RS recently, but even I can see a lot has changed since I last had an offer matched. Supply/demand has skewed rates to the point lenders are not being adequately compensated for the risk they are taking. These changes pave the way for margins on loans to be further squeezed so that rates offered to borrowers can be made even more attractive, with lenders taking an increasing responsibility for funding the PF out of their returns. At the same time, default rates are surging. Not to mention unexpected changes that have occurred in the broader economy. But there is no doubt, some who leave will have been ignorant of the risks initially; just as some who stay are still ignorant of the risks. Completely agree with your comments! I've been drawing down for best part of a year. I now have a get out of jail card for the residual 30 grand. Absolutely NOTHING to do with mis-appraising the original risk but grabbing a market oppprtunity as it arises. Still, always worth rehearsing the reasons why when I'm passed to a higher up start of business tomorrow.
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