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Post by stevefindlay on May 30, 2018 9:44:16 GMT
We did investigate. It isn't possible for us to put a PF over the top of the BM Receivables Model, as it could create a Collective Investment Scheme. There are arguments that a PF creates a CIS within P2P lending generally - I know this has been a discussion topic in the industry for some time. The closest way for us to offer a PF equivalent, is to issue bonds with an equity layer over the top. Which is very similar to a PF, but perhaps slightly better, as there is an upfront injection, as well as a continuing provision over time. Structured correctly, these can also sit within an ISA, improving the tax structuring. The only downsides of this are (i) increased admin costs and (ii) allocating returns to build up the equity layer - therefore the rates anticipated would be lower than the standard BM product. This is what we are working on right now - a series of ISA eligible, equity cushioned bonds - and will launch in 2018... I’ll bet they won’t yield anywhere near 6%, though.... That is correct. They won't be at 6% p.a. as they will be a lower-risk proposition. They will be priced at a higher rate of return than FSCS protected fixed-term bonds and FSCS protected notice savings accounts; and a lower rate of return than credit-worthy single-risk corporate bonds.
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bababill
Member of DD Central
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Post by bababill on May 31, 2018 2:06:18 GMT
We define P2P platforms, as lending (investment) platforms that the standard retail investor has access to. Not by the 36h distinction. When we comment on our non-P2P lending partners - these are often exclusive relationships and/or only available to institutional investors. Marketinvoice have not accepted retail investors for several years now and Platform Black (Sancus) minimum investment is £50,000, hence both are out of the reach of what I would define a 'standard investor'. Neither one offer an IFISA which is usually a mark of FCA accreditation for a P2P platform (but not always). My point is it is a slightly unfair to say ''The *only* platforms we've seen losses on underlying loans are from P2P platforms'' when this probably not the case at all. We must try and avoid to pick and choose definitions and or 'facts' to suit our arguments. If HMRC says certain platforms are not p2p and they are not open to the retail investors then really we can not change definitions to suit. I am purely guessing that some of the losses Bondmason (and myself through BM) have experienced are from either MarketInvoice or Platform Black. I have no data to back this up. For the sake of transparency- I have two accounts with Platform Black/Sancus and none with MarketInvoice.
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Post by stevefindlay on May 31, 2018 9:52:06 GMT
We define P2P platforms, as lending (investment) platforms that the standard retail investor has access to. Not by the 36h distinction. When we comment on our non-P2P lending partners - these are often exclusive relationships and/or only available to institutional investors. Marketinvoice have not accepted retail investors for several years now and Platform Black (Sancus) minimum investment is £50,000, hence both are out of the reach of what I would define a 'standard investor'. Neither one offer an IFISA which is usually a mark of FCA accreditation for a P2P platform (but not always). My point is it is a slightly unfair to say ''The *only* platforms we've seen losses on underlying loans are from P2P platforms'' when this probably not the case at all. We must try and avoid to pick and choose definitions and or 'facts' to suit our arguments. If HMRC says certain platforms are not p2p and they are not open to the retail investors then really we can not change definitions to suit. I am purely guessing that some of the losses Bondmason (and myself through BM) have experienced are from either MarketInvoice or Platform Black. I have no data to back this up. For the sake of transparency- I have two accounts with Platform Black/Sancus and none with MarketInvoice. When we comment on our non-P2P lending partners - these are often exclusive relationships and/or only available to institutional investors.
£50k is not an institutional investor-only threshold. Therefore we classify as P2P.
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TheDriver
Member of DD Central
Slightly bonkers
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Post by TheDriver on Aug 12, 2018 6:42:16 GMT
Those nuances of definition seem unjustifiable, (and unnecessary!). I always get suspicious when someone persists in meaninglessly attempting to substantiate a tenuous precept.Anyway, back OT, I am slightly disappointed at my current account statistics: After 15 months (13 since fully invested) I have 10% gross return about 8% nett, but could still only retrieve just under 92% of my original investment in liquidatable assets. That includes almost 10% in cash, meaning my invested portfolio is little over 90%, adding cash drag to the downside. Also, Current Return has dipped below 8%, which I believe is only based on invested funds, so barely over 7% before fees. Watchlist is well down to about 4% of investment (from double figures), but whereas previously most seemed to return to performing, I now have about 10% in Recovery! Gratifying to see Write-offs still nil, but not optimistic of that situation continuing. Overall, I guess that explains why I have more confidence (and funds) in long-term RS contracts, especially as my investment amounts fall within IFISA.
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Aug 13, 2018 9:37:02 GMT
Currently 1.5% write off, 10% recovery, 2.5% watch list. Not good and particularly irritated by a large exposure to Col, that I had pretty much got out of directly. And still no movement towards allowing greater diversification. Not working out how I would have hoped, the extra layer of DD does not seem to be working well for the fee it costs. And then there's the cash drag...
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groon
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Post by groon on Aug 14, 2018 16:19:31 GMT
Cash drag is a real pain in the proverbial. Mrs groon's account is consistently below 90% invested, despite a 2% setting for reinvested funds. The last allocation was on 3 August -- and those were all low-rate invoice discounting loans. The advertised return on this account is now 7.72% before deductions, down from well over 8% just a few weeks ago. And this is with no write-offs (fingers crossed that's how it stays, but chances are it won't).
I too am now getting a little concerned.
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Post by stevefindlay on Aug 14, 2018 20:00:10 GMT
There are three elements here: (1) Losses / loss ratio and (2) Cash drag (3) Individual investor performance vs Overall performance (1) Loss ratio: please see p2pindependentforum.com/post/272882/thread for an overview of the typical life of a loan and loss ratio. Which remains below 0.4% - well within accepted and anticipated levels. (2) Cash drag: our service continues to be oversubscribed. We try to make investment allocations as fair as possible and don't want to restrict investment through the platform - but we continue to see Demand for our service outstrip the Supply of approved loans. (It is worth noting, we don't earn any fees on uninvested capital, so there is no benefit of uninvested cash being on the platform). The platform is typically 93-99% invested at all times. (3) Individual investor performance vs Overall: The average return across BondMason after fees remains in excess of 6.0% (or 8.0% before fees). I understand, and I have a great deal of sympathy for investors that are at the lower end of the range of returns across BondMason. Typically, through absolutely no fault of their own - it is simply timing, luck of investment allocations etc We are working on an approach whereby all investors can get the average return, and are in discussions with relevant parties to seek to make this possible. The latest policy update from the FCA has made this more likely / possible / appropriate. More to follow in due course... |
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Post by df on Aug 14, 2018 20:51:41 GMT
We are working on an approach whereby all investors can get the average return, and are in discussions with relevant parties to seek to make this possible. The latest policy update from the FCA has made this more likely / possible / appropriate. More to follow in due course... Does this mean you are considering to introduce PF?
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Post by stevefindlay on Aug 15, 2018 21:14:28 GMT
We are working on an approach whereby all investors can get the average return, and are in discussions with relevant parties to seek to make this possible. The latest policy update from the FCA has made this more likely / possible / appropriate. More to follow in due course... Does this mean you are considering to introduce PF? All going well, there will be two new products: (1) A set (fixed) return with an equity buffer (provision fund) over the top (2) A variable return with any losses shared equally amongst all participants
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ashtondav
Member of DD Central
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Post by ashtondav on Aug 17, 2018 6:43:00 GMT
If (1) can compete with the 6% net of fees currently available from RS, AC and LW it will be an attractive addition to the the p2p market.
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Post by sayyestocress on Aug 17, 2018 8:43:58 GMT
If (1) can compete with the 6% net of fees currently available from RS, AC and LW it will be an attractive addition to the the p2p market. Product (1) is likely the upcoming 3.35% / 3.85% 1 yr / 3 Yr bonds.
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Post by df on Aug 17, 2018 11:02:50 GMT
If (1) can compete with the 6% net of fees currently available from RS, AC and LW it will be an attractive addition to the the p2p market. Product (1) is likely the upcoming 3.35% / 3.85% 1 yr / 3 Yr bonds. Yes, something like this. I can't see it being 6% if PF is involved. Product (2) sounds attractive to me.
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Post by Ace on Aug 17, 2018 14:02:15 GMT
If (1) can compete with the 6% net of fees currently available from RS, AC and LW it will be an attractive addition to the the p2p market. Product (1) is likely the upcoming 3.35% / 3.85% 1 yr / 3 Yr bonds. Why would someone go to the trouble/expense of introducing a new product that doesn't compete with more established providers?
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Post by sayyestocress on Aug 17, 2018 14:16:15 GMT
Product (1) is likely the upcoming 3.35% / 3.85% 1 yr / 3 Yr bonds. Why would someone go to the trouble/expense of introducing a new product that doesn't compete with more established providers? I suppose it's because it'll be diversified across multiple loan providers and types all in one place and you're likely getting a PF on loans you wouldn't normally. That said I'd personally rather take my chances with product (2).
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ashtondav
Member of DD Central
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Post by ashtondav on Aug 17, 2018 17:41:08 GMT
If (1) can compete with the 6% net of fees currently available from RS, AC and LW it will be an attractive addition to the the p2p market. Product (1) is likely the upcoming 3.35% / 3.85% 1 yr / 3 Yr bonds. So 100% cast iron useless rubbish, then. But compares favourably to ZOPA, I guess. There are at least 3 providers offering a PF and 6% for 5 year money. AC even gives 5% on 30 day money and a PF (the only account I trust the AC PF).
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