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Post by vaelin on Feb 25, 2018 18:22:00 GMT
In my view, you run the risk of complicating things if you introduce too many different account types. You also then run into the same problem you had with the GEA, which is a shortfall in available loans due to changes in economy/business or whatever. I think you have the right idea with the planned automated MLA accounts. As long as you categorise each loan carefully and give the user a broad selection of criteria to choose from, then users can craft the exact type of account they want. Going forward the accounts will be implemented on top of the bespoke accounts, and there'll be overlap rather than loans tending to fall into only a single account. That will alleviate the pressures on lack of available loans. There are other planned changes to our origination strategy to address this as well. I suspect this is going to be a big year for us technologically with plenty of foundations and new ideas being brought online to stand us in good stead for the next few years. As one of your shareholders, I am very pleased to hear that! Thank you for your hard work.
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Post by chris on Feb 25, 2018 18:23:24 GMT
ii) ... I'm also not aware of other platforms offering direct access to their CTO like this so where they've tweaked and altered systems they've done so silently without lenders noticing. Can anyone explain precisely how the loan matching works on RS or Z for example? I don't know the details of other platforms loan matching, but maximum percentage of portfolio I have in any single loan is: Z - 0.2%, FC - 0.5%, RS - 7.4%, AC - 20%+ re CTO access: nice as that is, I'd readily swap it for a guarantee the PF would kick in within (say) a year of a loan defaulting AND maximum allocation of 1% of portfolio in any single loan (ideally any single borrower). One might argue that a PF makes percentage in any single loan irrelevant, but imo it does still matter - platforms can fail, so the greater diversity a lender has, the better. Z, FC, and RS all have the benefit of more smaller loans with which to diversify you over. Being a secured lender dealing in larger loans we don't have that luxury and it takes more technology to correctly diversify you. That said our max should be closer to RS than 20%+ unless you're holdings are small (in which none of the platforms stick to those percentages you've quoted), or you're stuck in a locked loan and can't benefit from the new diversification. Regarding the PF - because of the nature of recovering secured loans that simply wouldn't be affordable at the levels of return we're offering in these accounts. RS can barely afford to keep their PF servicing their bad debt (their cash balance in the PF is half their expected losses) despite taking (AIUI so don't quote me) a larger margin on average than our PF. If you want a PF that operates in that way then invest in our access accounts. They are set up for liquidity and have fully covered defaulted loans to date. We're targeting much better diversification but require more loans to come through the pipeline which will take time. Were we to have a maximum allocation of 1% then lenders would be complaining about their funds not being deployed and therefore earning nothing.
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angrysaveruk
Member of DD Central
Say No To T.D.S
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Post by angrysaveruk on Feb 25, 2018 19:03:03 GMT
My opinion is AC should offer something like the 30 day account but locked up for longer say 1 or 2 years and offering a higher rate. By locking the money up it will reduce the risk for AC that people will withdraw money while the loan is suspended. Will also allow AC to build up diversification on accounts over time. When you first go in you might have a low level of diversification but over time it will get more diversified. Then if people want higher return they can just do manual investments, having potentially higher return and liquidity, but with the risk that you might lose some money.
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jjc
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Post by jjc on Feb 26, 2018 1:37:46 GMT
/snip The main thing that will hold me back from jumping deeper into the GBBA2 pool is the number of longer-term loans (>3 years) which - in the current climate - is not something I want to be too heavily involved in, although a broad diversification certainly lessens the risk. Shorter term loans are one of two things - loan type of bridging and development OR an account designed to seek to create that type of exposure in other ways but still likely to be quite focussed on those type of short term loans on the whole. So a one year Access Account OR a developmentment and bridging investment account could suit ? (& hard-working chris), though only a marginal user of your packaged accounts, here to say I'm very happy to read of the many improvements already made (& others upcoming). Wrt to the bolded question above, whilst I can understand the attraction from AC's side (& could imagine this or other ideas along similar lines might make sense to some lenders) as a shareholder I would hope that any slicing & dicing of the same loans into different packages will carry strong health warnings (or a new algo that would manage diversification for individual lenders across the various packaged accounts). Maybe that already does (or will) exist say for PSA/GBBA overlaps Chris? The PR/reputational risks of insufficient diversification in the packaged accounts has been my greatest concern (as a shareholder). Not followed closely Chris but do any of the current (or planned future) algos cater for managing exposure across the MLA & packaged accounts? eg if Billy & I both want to put £10k into a new packaged account (but I hold £5k of a loan already via the MLA whilst Billy has only £100) will it take into account our MLA holdings for our packaged account allocation to that loan? What if (subsequent to our being allocated whatever we're given of that loan in the packaged account) in the next 6-12M Billy or I were to greatly increase/reduce our MLA holdings in that loan - would it impact our packaged account holdings in the loan? An opt-out option (enabling MLA lenders to pick some loans they do NOT want allocated to them within the packaged accounts, be it because they already have sufficient exposure via their MLA or for whatever other reason) would be a killer app ofcourse. Any thoughts?
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registerme
Member of DD Central
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Post by registerme on Feb 26, 2018 10:35:04 GMT
chris fyi #544 is down to just under 15% now for my GBBA1 account, so headed in the right direction  .
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TFTO
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Post by TFTO on Feb 26, 2018 11:29:33 GMT
Well I stuck a small sum in yesterday to give it a try and ended up with the following:
13% in 590
16% in 532
23% in 497
19% in 384
and hardly any exchanging since, so not good enough for me. I don’t want it putting 5% plus in any loan and then trying to exchange, so what about adding some user selectable parameters to prevent this?
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Post by chris on Feb 26, 2018 11:32:01 GMT
Well I stuck a small sum in yesterday to give it a try and ended up with the following: 13% in 590 16% in 532 23% in 497 19% in 384 and hardly any exchanging since, so not good enough for me. I don’t want it putting 5% plus in any loan and then trying to exchange, so what about adding some user selectable parameters to prevent this? How small a sum? Unless you have £100 invested the system doesn't try and further diversify you, and with smaller amounts the amounts it would try and diversify are smaller which prevents further exchanges. Bespoke accounts where you can change parameters yourself are a work in progress, perhaps in Q2 certainly by Q3.
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dandy
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Post by dandy on Feb 26, 2018 11:47:07 GMT
How small a sum? Unless you have £100 invested the system doesn't try and further diversify you, and with smaller amounts the amounts it would try and diversify are smaller which prevents further exchanges. I am sure this is a really dumb question so apologies in advance. BUT if you are doing all this to get these accounts into the same position as QAA (i.e. lenders spread against all loans within GBBA) then why are you not just doing that instead of creating very complex new algos that seem to get there almost never and very slowly at that? What exactly is the point of these new algorithms?
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Post by chris on Feb 26, 2018 11:49:13 GMT
How small a sum? Unless you have £100 invested the system doesn't try and further diversify you, and with smaller amounts the amounts it would try and diversify are smaller which prevents further exchanges. I am sure this is a really dumb question so apologies in advance. BUT if you are doing all this to get these accounts into the same position as QAA (i.e. lenders spread against all loans within GBBA) then why are you not just doing that instead of creating very complex new algos that seem to get there almost never and very slowly at that? What exactly is the point of these new algorithms?The QAA model doesn't cope with other features we're planning down the line and is optimised for a different purpose.
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warn
Member of DD Central
Curmudgeon
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Post by warn on Feb 26, 2018 13:13:16 GMT
chris fyi #544 is down to just under 15% now for my GBBA1 account, so headed in the right direction . It's at 14.4% of unsuspended loans in mine, though just 5% of the total amount. Just need #227 to get sorted...
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TFTO
Member of DD Central
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Post by TFTO on Feb 26, 2018 13:45:42 GMT
Well I stuck a small sum in yesterday to give it a try and ended up with the following: 13% in 590 16% in 532 23% in 497 19% in 384 and hardly any exchanging since, so not good enough for me. I don’t want it putting 5% plus in any loan and then trying to exchange, so what about adding some user selectable parameters to prevent this? How small a sum? Unless you have £100 invested the system doesn't try and further diversify you, and with smaller amounts the amounts it would try and diversify are smaller which prevents further exchanges. Bespoke accounts where you can change parameters yourself are a work in progress, perhaps in Q2 certainly by Q3. £1,000 but not all at once.
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Post by chris on Feb 26, 2018 15:17:23 GMT
TFTO - could you PM me your email address please
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cb25
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Post by cb25 on Feb 26, 2018 15:23:18 GMT
I don't know the details of other platforms loan matching, but maximum percentage of portfolio I have in any single loan is: Z - 0.2%, FC - 0.5%, RS - 7.4%, AC - 20%+ re CTO access: nice as that is, I'd readily swap it for a guarantee the PF would kick in within (say) a year of a loan defaulting AND maximum allocation of 1% of portfolio in any single loan (ideally any single borrower). One might argue that a PF makes percentage in any single loan irrelevant, but imo it does still matter - platforms can fail, so the greater diversity a lender has, the better. Z, FC, and RS all have the benefit of more smaller loans with which to diversify you over. Being a secured lender dealing in larger loans we don't have that luxury and it takes more technology to correctly diversify you. That said our max should be closer to RS than 20%+ unless you're holdings are small (in which none of the platforms stick to those percentages you've quoted), or you're stuck in a locked loan and can't benefit from the new diversification. Regarding the PF - because of the nature of recovering secured loans that simply wouldn't be affordable at the levels of return we're offering in these accounts. RS can barely afford to keep their PF servicing their bad debt (their cash balance in the PF is half their expected losses) despite taking (AIUI so don't quote me) a larger margin on average than our PF. If you want a PF that operates in that way then invest in our access accounts. They are set up for liquidity and have fully covered defaulted loans to date. We're targeting much better diversification but require more loans to come through the pipeline which will take time. Were we to have a maximum allocation of 1% then lenders would be complaining about their funds not being deployed and therefore earning nothing. Seems a little odd saying "so don't quote me" in a forum that's viewable by the general public. Perhaps it's just me being old fashioned, but I don't expect to see an FCA regulated organization having a go at a competitor in this way.
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Post by chris on Feb 26, 2018 15:57:53 GMT
Seems a little odd saying "so don't quote me" in a forum that's viewable by the general public. Perhaps it's just me being old fashioned, but I don't expect to see an FCA regulated organization having a go at a competitor in this way. I'm not having a go at a competitor and you can check their stats out on their own website if you want which gives the breakdown between cash in the PF and assumed inflow of funds from future payments. I was merely trying to explain why our PFs on the non-access accounts cannot operate in the way you stated you wanted them to.
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daveb4
Member of DD Central
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Post by daveb4 on Feb 26, 2018 16:39:00 GMT
Manual loan on IFISA just started so that should prove interesting with regard to diversification as lots of people move cash about to set purchase limits. eg I am selling a lot of GBBA2 to hopefully purchase units in manual loans.
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