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Post by tony46 on Feb 9, 2018 16:54:03 GMT
I've just started investing in LW.
My first £1k was split into 3 fairly equal loan chunks, as was my £50 promotional intro bonus at the beginning of this week. So far so good. Hoping/assuming that several further amounts that I intend to transfer this month would be similarly divided up into 3 chunks, I sent £330 across but that hasn't been split at all. I’ve just noticed another unhappy loaner on this forum transferred £5k which also wasn't split.
To relieve uncertainty wouldn't it be better for LW to either operate a consistent diversification policy or let us loaners manually decide if/how much they want loans divided up between borrowers? After all, it is our money we’re talking about.
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Post by Matthew on Feb 9, 2018 17:26:35 GMT
Hi tony46Just to confirm that the allocation of loan chunks is based on your total account value, rather than on each lending offer individually, which hopefully explains the logic behind your allocation below. The logic behind allocating larger loan chunks is based on the diversification provided by the Shield, which effectively diversifies your investment across the entire loan book (provided the Shield never becomes depleted of course). In any case, over time with re-investments you'll end up with an exponential number of smaller chunks (the average is currently 190+ per lender). The main benefit of lending in larger chunks initially is really getting your money lent out quickly (the smaller the chunk size, the more loans need to pass through the system to fully match your offer). You can currently manually drip feed funds in, though this is not really a great solution. It's a fair point though, and we've received this feedback before. We will likely reduce the allocation to any one loan over time as the monthly loan volume increases. Thanks for the feedback and have a great weekend. |
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Post by stevexxx on Feb 9, 2018 19:06:37 GMT
It makes common sense to diversify in most p2p systems but perhaps not in Lending Works, however systems change and I personally feel more comfortable with lots of small chunks and I think perhaps this is something that can be looked at.. For now though when investing I turn off auto-lend and trickle the funds in manually in £10 or £20 chunks and that works for me...
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Post by tony46 on Feb 10, 2018 17:53:16 GMT
Thanks Matthew and stevexxx for your replies.
I've turned off auto-lend for the time being and this coming week I will try manually lending smaller chunks to compare with LW's auto system experience, as you suggest Steve. If that results in longer matching times as mentioned by Matthew then I'll revert to auto-lend ON.
By the way, apologies to Moderators for starting a new thread when this could have been a continuation of an earlier similar "Diversification on LW" topic.
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pom
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Post by pom on Feb 10, 2018 19:19:52 GMT
Can't help thinking you might be worrying a bit unduly. Diversification will naturally increase over time anyway (and whichever platforms you invest in you're never going to get instant diversification on day one anyway), and if the Shield gets depleted sufficiently for it to be an issue then it probabaly means enough brown sticky stuff has hit the fan for it not to really matter how many different loans you're in. Tho if you really want to spread your lending out surely the easy way to do it would be to spread out your payments into LW (standing orders perhaps?) and then let the queue and auto invest sort it out rather than log in and do it manually, which for me would definitely come under "life's too short".
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zlb
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Post by zlb on Feb 23, 2018 11:13:32 GMT
It makes common sense to diversify in most p2p systems but perhaps not in Lending Works, however systems change and I personally feel more comfortable with lots of small chunks and I think perhaps this is something that can be looked at.. For now though when investing I turn off auto-lend and trickle the funds in manually in £10 or £20 chunks and that works for me... Hi with the trickle-in, does that mean there is a holding point, or do you mean that you are doing bank transfer for small amounts? looking to transfer ISA. thanks
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Post by stevexxx on Feb 23, 2018 13:25:42 GMT
Your money goes into a holding account and is then lent out according to your settings, you can set auto-invest to off then make smaller manual investment chunks of your desired size. ie.. pay in £100 with auto-invest off then manually make an offer of say £20, wait until this matched then make another. At the moment the money seems to be matched dally, often two or three times a day but it might take longer depending on the money supply.. You could say pay in £1000 and lend out in £50 chunks or whatever rather than having £1000 going to one loan with auto-invest on...
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zlb
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Post by zlb on Feb 25, 2018 16:42:07 GMT
Hi tony46Just to confirm that the allocation of loan chunks is based on your total account value, rather than on each lending offer individually, which hopefully explains the logic behind your allocation below. The logic behind allocating larger loan chunks is based on the diversification provided by the Shield, which effectively diversifies your investment across the entire loan book (provided the Shield never becomes depleted of course). In any case, over time with re-investments you'll end up with an exponential number of smaller chunks (the average is currently 190+ per lender). The main benefit of lending in larger chunks initially is really getting your money lent out quickly (the smaller the chunk size, the more loans need to pass through the system to fully match your offer). You can currently manually drip feed funds in, though this is not really a great solution. It's a fair point though, and we've received this feedback before. We will likely reduce the allocation to any one loan over time as the monthly loan volume increases. Thanks for the feedback and have a great weekend. hi, could you confirm an issue that someone else referred to. It's there a holding place within the account, including ISA which can be used to filter smaller amounts. Although the shield theoretically pays against any default, I wouldn't want to be the one holding the debt. You refer, also to "participating" lenders who would all be asked to take the hit if the shield ran out. Are all lenders participating in this, ie in conditions, or is it voluntary? Thanks.
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Post by Matthew on Feb 25, 2018 17:18:29 GMT
Hi tony46 Just to confirm that the allocation of loan chunks is based on your total account value, rather than on each lending offer individually, which hopefully explains the logic behind your allocation below. The logic behind allocating larger loan chunks is based on the diversification provided by the Shield, which effectively diversifies your investment across the entire loan book (provided the Shield never becomes depleted of course). In any case, over time with re-investments you'll end up with an exponential number of smaller chunks (the average is currently 190+ per lender). The main benefit of lending in larger chunks initially is really getting your money lent out quickly (the smaller the chunk size, the more loans need to pass through the system to fully match your offer). You can currently manually drip feed funds in, though this is not really a great solution. It's a fair point though, and we've received this feedback before. We will likely reduce the allocation to any one loan over time as the monthly loan volume increases. Thanks for the feedback and have a great weekend. hi, could you confirm an issue that someone else referred to. It's there a holding place within the account, including ISA which can be used to filter smaller amounts. Although the shield theoretically pays against any default, I wouldn't want to be the one holding the debt. You refer, also to "participating" lenders who would all be asked to take the hit if the shield ran out. Are all lenders participating in this, ie in conditions, or is it voluntary? Thanks. Hi zlbYes, there is a holding area (we call it the Wallet) where funds are available to invest or withdraw. You can fund your account and then manually place offers if you would like smaller individual chunks than those allocated automatically. In the event the Shield became fully depleted, and a 'pooling event' was subsequently approved, all lenders would be automatically opted-in with an option to opt-out. Say, for example, you were already very well diversified and you only had a small balance remaining, you may just choose to accept the direct default risk on your chunks - like any other P2P platform with no provision fund/Shield. The opted-in lenders would share losses on a pro-rata basis to their remaining investment. Hope this helps.
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macq
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Post by macq on Feb 25, 2018 17:18:33 GMT
Hi tony46 Just to confirm that the allocation of loan chunks is based on your total account value, rather than on each lending offer individually, which hopefully explains the logic behind your allocation below. The logic behind allocating larger loan chunks is based on the diversification provided by the Shield, which effectively diversifies your investment across the entire loan book (provided the Shield never becomes depleted of course). In any case, over time with re-investments you'll end up with an exponential number of smaller chunks (the average is currently 190+ per lender). The main benefit of lending in larger chunks initially is really getting your money lent out quickly (the smaller the chunk size, the more loans need to pass through the system to fully match your offer). You can currently manually drip feed funds in, though this is not really a great solution. It's a fair point though, and we've received this feedback before. We will likely reduce the allocation to any one loan over time as the monthly loan volume increases. Thanks for the feedback and have a great weekend. hi, could you confirm an issue that someone else referred to. It's there a holding place within the account, including ISA which can be used to filter smaller amounts. Although the shield theoretically pays against any default, I wouldn't want to be the one holding the debt. You refer, also to "participating" lenders who would all be asked to take the hit if the shield ran out. Are all lenders participating in this, ie in conditions, or is it voluntary? Thanks. think this is what you mean - you can set in auto lending how you want your transfer/debit card payment split over 3 or 5 years i.e 40% over 3 & 60% over 5 etc and its lent out by LW.Or if auto is switched off the money goes into your wallet and you can lend in smaller amounts each time its matched or each day how you want(it used to be that if you made another payment later in the day and the first had not matched then they were added together so may want to check the FAQ) crossed with better answer above 
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zlb
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Post by zlb on Feb 26, 2018 21:14:07 GMT
hi, could you confirm an issue that someone else referred to. It's there a holding place within the account, including ISA which can be used to filter smaller amounts. Although the shield theoretically pays against any default, I wouldn't want to be the one holding the debt. You refer, also to "participating" lenders who would all be asked to take the hit if the shield ran out. Are all lenders participating in this, ie in conditions, or is it voluntary? Thanks. think this is what you mean - you can set in auto lending how you want your transfer/debit card payment split over 3 or 5 years i.e 40% over 3 & 60% over 5 etc and its lent out by LW.Or if auto is switched off the money goes into your wallet and you can lend in smaller amounts each time its matched or each day how you want(it used to be that if you made another payment later in the day and the first had not matched then they were added together so may want to check the FAQ) crossed with better answer above thanks macq.
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zlb
Member of DD Central
Posts: 1,422
Likes: 333
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Post by zlb on Feb 26, 2018 21:17:21 GMT
hi, could you confirm an issue that someone else referred to. It's there a holding place within the account, including ISA which can be used to filter smaller amounts. Although the shield theoretically pays against any default, I wouldn't want to be the one holding the debt. You refer, also to "participating" lenders who would all be asked to take the hit if the shield ran out. Are all lenders participating in this, ie in conditions, or is it voluntary? Thanks. Hi zlbYes, there is a holding area (we call it the Wallet) where funds are available to invest or withdraw. You can fund your account and then manually place offers if you would like smaller individual chunks than those allocated automatically. In the event the Shield became fully depleted, and a 'pooling event' was subsequently approved, all lenders would be automatically opted-in with an option to opt-out. Say, for example, you were already very well diversified and you only had a small balance remaining, you may just choose to accept the direct default risk on your chunks - like any other P2P platform with no provision fund/Shield. The opted-in lenders would share losses on a pro-rata basis to their remaining investment. Hope this helps. thanks Matthew. If I opened an ISA account can I switch off autoinvest, then arrange an ISA transfer, so that when it arrives it won't get Kent out, and control lending that way?
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Post by Matthew on Feb 27, 2018 11:25:00 GMT
Hi zlb Yes, there is a holding area (we call it the Wallet) where funds are available to invest or withdraw. You can fund your account and then manually place offers if you would like smaller individual chunks than those allocated automatically. In the event the Shield became fully depleted, and a 'pooling event' was subsequently approved, all lenders would be automatically opted-in with an option to opt-out. Say, for example, you were already very well diversified and you only had a small balance remaining, you may just choose to accept the direct default risk on your chunks - like any other P2P platform with no provision fund/Shield. The opted-in lenders would share losses on a pro-rata basis to their remaining investment. Hope this helps. thanks Matthew. If I opened an ISA account can I switch off autoinvest, then arrange an ISA transfer, so that when it arrives it won't get Kent out, and control lending that way? Absolutely - just switch off automatic investing before you do your transfer and then you can decide what to do when the money arrives. Thanks.
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