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Post by tony46 on Nov 22, 2018 17:59:29 GMT
Having had just one IFISA for 10 months with Lending Works, I'm still quite new to P2P. I did research those platforms offering ISAs and am still happy with that first choice, as fingers crossed so far, my loans are fairly well diversified, performance is on target (now 6.5% for 5 year loans) and there appears to be good lender protection from individual defaults.
Now, wishing to further invest, & taking sound advice from the very useful 4th Way.co.uk website to avoid putting all my eggs into one basket, I'm looking to diversify with other possible IFISA platforms, which I can do by transfers of previous years cash ISAs of course (currently earning a pathetic 1.25%). Any advice from the personal experience of forum members would be much appreciated, and exchange of advice would be useful not just for myself, but for others too.
This time, bearing in mind the Collateral collapse, Lendy's recent troubles, and possible upcoming Brexit etc volatility, I've been conducting even more extensive research. My attitude to financial risk is probably much the same as most of us, ie. I can well do without the stress, probably much better not to be taken in by very high interest claims which in practice are severely affected by loan defaults, but to go for more achievable rates without that hassle.
So I'm looking for similar to LW, ie. Minimum lender hands-on, loans chosen by, auto-diversified and auto re-lent by the platform, a record of zero or very low defaults, etc, if that's not too much to ask!
Here is my draft short-list with hopefully correct pros & cons and current target rates:
Ratesetter - Pros - well-known since 2010, v large so hopefully little cash-drag whilst waiting for their loan matching, a zero lender losses record due to provision fund, so low risk. Cons - to achieve 3.3% 1year or 5.9% 5years capital & interest only paid at maturity. For monthly repayments Rolling Market pays just 2.9% but easy free access to cash.
Assetz Capital - Pros - choice of 5 accounts, 4 low risk with reserve funds, auto-diversified & auto-lending options. 4.1% Easy Cash Access, 5.1% 30-Days Access, 5.5% Property Secured, 6.25% Great British Business. Cons - smaller so maybe some cash-drag, last 2 seem to be paying back at end of loan.
Proplend - Pros - No investor losses to date, auto-lending option to lowest risk Tranche A loans, average 7.4%. Cons - small company, v small loan book, <4 loans typ per month so poss cash-drag while waiting and diversifying. Minimum lend amount £1000.
Lending Crowd - Very similar to PL above, auto-lending & auto-diversifying option 6%, but typically 20 loans per month so hopefully less cash-drag.
Lastly - Crowd Property - Although unlike the above platforms, loans are self-selected and it's a small company and loan book, it does have very good customer comments and feedback on this forum, plus a target rate of 8%.
Zopa Core account was on my short list but has rather negative comments on this forum.
I think that's about it for now, looking forward to some first-hand user feedback and any other suggestions!
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archie
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Post by archie on Nov 22, 2018 18:24:41 GMT
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Post by fatbritabroad on Nov 22, 2018 20:48:27 GMT
Fwiw I use the following
Ablrate - High risk and definitely hands on but have just been buying small parts of every loan. I have a mid 4 figure sum in this
Lending works - similar amount
Assets capital 30 day account similar amount
Ratesetter 5 year account
I have some in Kufflink non ifisa accounts for the intro bonus as well
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macq
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Post by macq on Nov 22, 2018 21:21:43 GMT
With Ratesetter you can set your own rate so you don't have to accept the rate i.e your 3.3% for One year could have been over 4 to 4.5% over the last few weeks even as high as 5.2% or more at times
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Post by Ace on Nov 22, 2018 22:15:13 GMT
Hi tony46 , I'm no expert, but here are my thoughts on your choices and comments: Ratesetter - It's not true that the 5yr account only pays capital and interest at maturity. Most, if not all, of my 5yr loans are amortized (similar to those on LW). I find that RS is nowhere near as hands-off as you might think. I'm constantly adjusting my lending rate, as accepting the market-rate seems a bit of a mugs game to me (often 0.5% or more below what could be achieved later in the day). Assetz Capital - I didn't see any cash drag when investing in the Auto accounts. Whole account was virtually instantly invested, though took a while to become diversified (GBBA2 and PSA). I attempted to withdraw all from these Auto accounts a couple of months back as I prefer the Manual Account. I still have a few small sums stuck in untradeable loans in the Auto accounts, but they are slowly paying back. Proplend - I'm pretty much in agreement with you here. I'm poorly diversified in this platform due to high minimum investment, but it's ok when considered as part of my 20 platform portfolio (I'm probably just fooling myself, but it looks ok if you squint!). Lending Crowd - I haven't used these yet. Crowd Property - Again, I haven't used these yet. I really want to as I like what I see, but can't quite justify the cash drag. This seems pretty much inevitable if you want to diversify in the IFISA here as transferring ISA money in small chunks is too much hassle and takes time. I realize that it's possible to pull some flexible ISA money out and invest it elsewhere while waiting for loans, but that's too much hassle for me. Having said that, I'll probably take the plunge sometime soon. Zopa - I'm in plus here, but I'm not expecting to stay. I think the rates are too low for the risk. |
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nyneil
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Post by nyneil on Nov 22, 2018 22:44:55 GMT
With Ratesetter you can set your own rate so you don't have to accept the rate i.e your 3.3% for One year could have been over 4 to 4.5% over the last few weeks even as high as 5.2% or more at times I've had 5.6% within the last month. You might need to wait a few days, or more, but it pays off to wait. You definitely need to read the site to see how it works. I asked RS if i would be matched to higher risk loans, if i chose a higher rate; the reply was somewhat revealing: there is no link between the rate the borrower pays and the lender receives. RS presumably pools all the loans and fills them with the lowest lender rates they can; eventually they will pay out at a higher rate; supply & demand.
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littleoldlady
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Running down all platforms due to age
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Post by littleoldlady on Nov 23, 2018 10:50:54 GMT
In my experience the big difference between ISA and non-ISA is the difficulty and drag effects of moving money in and out. Therefore I think that IFISAs are best for "invest and forget" platforms although these usually pay less interest thus wiping out the tax saving for standard rate payers.
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Post by wiseclerk on Nov 23, 2018 11:11:33 GMT
To get a broad overview of the IFISAs and the parameters use this interactive comp.:
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benaj
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Post by benaj on Nov 23, 2018 11:21:45 GMT
To get a broad overview of the IFISAs and the parameters use this interactive comp.:
Just googled "best IFSAs advice", 4th way & P2p2-banking are on the top search results. I like P2p-banking database which offers IFISA platforms search based on criteria.
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IFISAcava
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Post by IFISAcava on Nov 23, 2018 11:41:42 GMT
At your service!
Lending Crowd - one of my least favourite and successful ISAs - high defaults still, and only rescued by the frequent cashback offers. I'm drawing down. I think might be too stressful with frequent updates of overdue/defaulted loans.
Proplend - highly recommended, you can keep to the lower risk 50%, and autoinvest in those, but it will take time to get diversfied, and if you put in too much in one go you risk a) cash drag or b) overconcentration in one loan. So put in eg 5K at a time. They are one of the quickest in transfer times in my experience. The minimum's not a problem if you have a decent overall P2P pot (2% max exposure for £50K pot, 1% for £100 K). I have 23 loans on this platform, mid-five figures investment.
Assetz - Core part of my ISA portfolio - I mostly use MLA as I have time and it is possible to get very diversified now, but the 30-day account and QAA both worth considering as hands off approaches. A major advantage is that no fees for transferring out, so can bank ISA allowance there and transfer out as needed to other IFISAs (as and when for previous year's transfers, or in following tax year for current year's £20K). I would avoid the other autoaccounts (see extensive discussions on other boards)
Ratesetter - more appealing with current increase in rates, but still one needs to be more hands on than expected to avoid low rates and because of early repayments, and can't easily transfer money in/out when rates are high/low as ISA transfer lag too long. I have a small amount here for platform diversity sake.
Also consider:
HNWLending - they have an autoinvest option, £10K minimum transfer in, but will be diversified across 15 loans, 10% per loan max, 7%pa. Not sure of any sellout fee for this investment - best check direct with them. They claim a good record in recoveries.
Archover - new autolending, 10% max per loan, £250 min investment, 6.4%. No SM so fixed in for the term (though I hear SM is coming). Couple of recent loans in trouble, they seem to be managing them well, I'm a cautious "hold" with them at the moment.
No experience with CrowdProperty.
I would generally advise diversifying across platforms, which will of course depend on how much you have to transfer overall, but a mixed portfolio of Assetz, Proplend, Archover, HNW and Ratesetter added to your LW (which I would also recommend within this category) would be well diversified, low maintenance and with decent expected return around of 6% ish.
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ceejay
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Post by ceejay on Nov 23, 2018 11:42:23 GMT
In my experience the big difference between ISA and non-ISA is the difficulty and drag effects of moving money in and out. Therefore I think that IFISAs are best for "invest and forget" platforms although these usually pay less interest thus wiping out the tax saving for standard rate payers. Agreed.
For example, I did put some IFISA money in RS earlier this year and almost immediately regretted it. Remember that transferring out (if rates fall on a site, as often happens on RS) almost always involves a long delay. AND that CURRENT year subscriptions have to be moved all together or not at all, which could be a real pain if, for example, you had early repayment on part of your investment and there were no good rates on offer on that platform.
I think the main problem here is whether you are risking putting the cart before the horse by asking the wrong question (what IFISA should I use?)
A better approach, IMHO, is to look at where you want to put your money across all investment types and platforms, and, having decided that, look at where your ISA allowance should best be used.
FWIW my/our ISA allowance this year has gone to both S&S and P2P. The P2P element is all in AC - 30DAA and MLA.
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mjc
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Post by mjc on Nov 23, 2018 19:41:50 GMT
Useful summaries here, thanks.
Another possible consideration is whether it is flexible or not.
I have little savings but substantial ISA, so I borrow from the NW cash isa on an instant basis. 4th Way gives this information and the Exit fees clearly by clicking IFISA Details, ie (for HNW)
“IFISA details
Key details Description
Open to new lenders Yes
Lenders can lend right away (subject to loans being available) Yes
Minimum opening deposit for new ISA contributions £10,000
Minimum lending amount (if different to above) £5,000 per loan
Interest rates the same as non-IFISA accounts Yes
Additional fees for lending through an IFISA £0
Transfers in (from existing cash ISAs, share ISAs and IFISAs) Description
Minimum transfer-in amount Lender should be aiming to get to £10k+
Transfer-in fee £0
Transfer-out fee £0
Extra features Description
Lenders with ordinary accounts can automatically divert repayments and interest to their IFISA Yes
Flexible ISA (you can withdraw and re-deposit new ISA money in the same tax year without losing your ISA allowances) Yes”
I have been intending to look also at TrustPilot to give the comparison between sites. I’m aware of the fake review issue, and that some negative reviews are from borrowers, but the likes of FS and Lendy show a dramatic contrast with AC and Proplend for example.
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Post by jordan on Nov 26, 2018 12:13:55 GMT
Jumping in here... We're looking to launch an ISA in the next few months. tony46 we offer an aggregator which diversifies funds across multiple P2P platforms. This should help with diversification - we integrate with auto-bid lenders, like Lending Works (full disclosure, they are integrated), so capital is diversified at a platform level, sector level and borrower level. We're looking for feedback on our ISA proposition as well as another interesting development we're scoping, where Orca investors can select the platforms they wish to hold, thereby building their own portfolio. For more info on our plans and to view a preview of how these developments may materialise, please check out this thread and feel free to comment p2pindependentforum.com/thread/13806/orca-select-product-seeking-feedbackThanks, Jordan |
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