Orca ISA and Self-Select product - we're seeking feedback

IF I had invested, and was in the Lendy London loan, as an example (or any other platform with such a borrower), how could I be sure I was not the one to be targeted under ‘joint and several’ liability for £10m?

I would only consider ORCA if one of the safer options was a PF fund to ensure under normal market conditions there would be no loss of capital, along with no exit fee (for anyone investing £10k or so). A Flexible IFSA would be desirable, with rapid exit options ie to an executor.

Finally I could be interested if there were larger return accounts with credible risk/return data.

hth

Great response, thank you.

Yes, the fee is a bone of contention on this forum, which is completely fair. In terms of early-access fee, we can turn off auto-lending, thereby holding your loans to maturity and redeeming without incurring fees, but of course this can significantly delay the time to receive funds (up to 5 years potentially).

I appreciate you highlighting the platforms you'd like to see integrated with Orca. Your correct to flag the difficulties integrating 'manual' platforms with the current Orca model; our criteria for integration is quite strict, and crucially, we only integrate with platforms that offer an auto-lend/auto-bid product, this mitigates against Orca being required to select individual loans, which also has more problematic tech implications (e.g, we'd need an API connection which most platforms don't currently offer).

There are platforms who have historically been manual-lend/manual-bid now offering auto-lend products (Proplend, ThinCats, ArchOver e.g), but passing them against our current criteria for integration proves difficult. Concerns around level of diversification, time to deploy, time to withdraw and so on arise. But it's not inconceivable to integrate with them in time, perhaps in our Self-Select (portfolio builder)? The (different) concerns attached to each of these auto-lends would need to be clearly displayed to clients, however. We need more time, and these platforms need more time to build a track record with their new products.

We've not analysed CrowdProperty yet, but may do in time. You'll be kept well informed if and when!

In summary, I take your point regards the fee, and it is apparent that it needs some consideration if we're to attract users from this forum. In terms of other platforms to integrate with, I'll note the ones you've mentioned and see how they fair against our assessment criteria (Proplend has been assessed, the others haven't).

Thanks again

Thanks again ceejay

The platforms we currently integrate with are, as you say, the more hands-off. We have quite a strict assessment criteria for integration with the current Orca product, primarily, the platform must offer an auto-bid/auto-lend product. This ensures broad diversification (at borrower level) while mitigating against Orca being required to select loans, which has other tech implications (e.g, requirement for an API). Growth Street is a platform that would fit our current model, but they have a self-certification and appropriateness test during sign up, we currently don't, nor do the other platforms we integrate with (Assetz Capital, Lending Works, Landbay, Octopus Choice, LendingCrowd).


Good point on measuring fees against time saved. I'm getting similar feedback elsewhere in this thread regards fees, which is absolutely fair. Pricing value by time, when people here manage their portfolios well (I assume) and can generate better returns, is going to be hard. But it's interesting for us to see where value does come from - Q: if it's not time saved, or the return, is there other areas we can add value? Exposure to P2P platforms or other alternative lenders you'd otherwise probably not invest in? 


Here's another question. Those of us with a few quid (or more!) in COL are acutely aware of platform risk at the moment. Using an aggregator adds an extra level of risk which needs to be considered. You'd need to offer something very convincing.


Platform risk is something we designed the product to mitigate, hence diversification across multiple platforms. I acknowledge that yourself, and most on this forum, will have portfolios that are well diversified already, but for those who don't, we try to alleviate concerns around platform risk. To your point about our own added risk, well this is why we ensure all accounts opened are held in the user's name. Orca doesn't currently invest as a fund, for example, capital is not pooled, you would hold the investments in your name. If we went insolvent, you'd gain access to your investments. 

Hopefully that goes some way to answering your question! Q: If not, it would be good to understand more about the risk you perceive when using an aggregator? And thanks again for your candid feedback, very helpful.

So would think your product will appeal to the newer or more hands off investor but not sure how you reach them?

That's the million dollar question...how to reach new-to-P2P investors! Or rather, how expensive it is to reach them...

If I think about how the bigger players market themselves these days, it's hard to compete as a smaller business with smaller marketing budget. But, perversely, it's useful to have larger players market the asset class to the masses (so we don't have to as actively); saying that, as an industry, we're still not quite "mainstream". "Head against a brick wall" when explaining P2P to (some) IFAs springs to mind.

This is why we're keen to offer as much value as possible, so we're not having to compete as aggressively. We're hoping that an ISA which wraps multiple P2P accounts, offering a product where you can select the platforms you hold, could go some way to offsetting the reduced return (from what you can get yourself), and justify the fee, but perhaps not? I can fully appreciate that if it is the case. 

All in all, great feedback and thanks

Hi jordan,



I like the idea Orca as a one stop platform to diversify p2p Investment. The hands-off solution is fantastic, Orca it's like an investment manager in the P2P lending, diversifying investment across 7 different p2p platforms depending on the size of the investment. It seems to be a nice place to start p2p lending with just £1000 across different platforms. 

I wish Orca would offer an investment product greater than 5% return for the 0.65% fee. Signing up platforms instead of using Orca Money's sandbox solution may be a pain, but investor could get more from sign up bonus by investing direct. Investing on a passive platform does not get those sign up generous bonuses.

My question to jordan, could you please explain what Investors are investing in P2P investment aggregation platform? Can investor claim "Bad debt relief for Peer to Peer investments" in the case of bad debt?

Yeah fair, the current solution is pitched at the time-poor with limited understanding of the market, or inclination to better understand the market, and limited time to set up their investments and monitor them. Which, granted, is not really those who are active on this forum...

It would be tricky giving clients access to the accounts, but providing more data on the accounts held, is something we can look into. 

Q: What sort of information/data would you expect to see on the accounts you hold, out of interest?

Thanks for your candid response benaj.

The issue with the return is that it is calculated as a weighted blend of the rates offered by the underlying platforms, so is dictated by them, so to speak. If we went for higher yielding platforms, we'd have to adapt the model to befit manual-selection platforms, most likely...which is not feasible with our current model.

In terms of bonuses, we actually pass on the bonuses the platforms offer, assuming the criteria is met, e.g, a certain level of investment is made at the platform (£1k invested = £100 cashback, for example). Along-with our own bonus schemes, this can really maximise the investor return through Orca.

My question to jordan, could you please explain what Investors are investing in P2P investment aggregation platform? 

I think I've interpreted your question correctly: the types of investors using aggregators are, as has been voiced on this thread accurately, those who are potentially time poor and/or are looking to increase diversification, without having to put in the requisite research and account opening + data retrieval efforts.

Hope this helps.