arby
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Post by arby on Mar 23, 2019 10:42:27 GMT
It would be pretty pointless FS setting a minimum bid size on the PM and then not setting the same minimum bid size on the SM. They never restrict the SM the point is to fill it quickly. They would do better to offer bonuses at 0.1% per £100 for first £1000 then .1% per £5000 after that iand reduce primary % rate by 1% this would give the advantage to those that like to buy and hold but don’t have a lot of money. So you believe the purpose of this effort is to encourage larger bids to increase the speed of filling loans. Other people think the change is to eliminate "annoying small investors". You think one will still be able to sell £25 increments on the SM, while others doubt it. Do you see why I say some upfront communication from FS would be helpful?
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star dust
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Post by star dust on Mar 23, 2019 15:44:41 GMT
I find this comment (the bit I’ve highlighted) a bit unbelievable what evidence is it based on? What’s this, a May moment, blame the investors why don’t you? P2P started out with Zopa in the UK and a concept of social lending – match lenders to borrowers through an on-line platform and win win win - platform profits, borrowers get lower rates than through traditional financial institutions and investors get better rates. Whilst the social element has virtually evaporated, and the sector has moved on in other ways, I don’t see that it should be aiming to exclude retail investors, turn into a 'nanny state', or to be the preserve of the rich investor. I don’t invest on FS and have no axe to grind with them at all, I am using them (because you posted on their board) as an example which could equally apply to other P2P Platforms. FS started off with pawn loans I believe and no doubt welcomed and encouraged as many investors as it could get, and as BH’s have stated here and on other platforms £25 bids aren’t worth getting out of bed for, it’s a good job there were a few minnows investing or the Platform wouldn’t have got established. I believe it’s performance on communicating (generally) with investors and some of its pawn loans has been pretty atrocious so maybe that’s a source of all the ‘minnows’ complaints? Probably not an issue for BH’s and underwriters who seem to get privileged information from the platforms. Assuming FS isn’t a fly by night P2P set up, out for a quick buck, and it’s in it for the long term then surely it needs to develop systems and strategies to deal with any complaints it gets, which should include communication, ‘education’, and performance, but not in my opinion trying to exclude some investors. In addition, I am sure there must also be techniques in any company environment for dealing with ‘difficult’ customers, who I bet come in all sorts. I see a lot in the sector to complain about and in my view it’s a good thing because it needs to be held 'to account', and has and is slowly improving the sector as a whole. On a personal note I’m a vanilla minnow retail investor, but I certainly don’t meet your stereotype I’ve only ever telephoned one platform and that was AC concerning their 2FA – I didn’t submit a formal complaint though. I have contacted a fair few about mistakes and issues with my account, as I should have done if I wanted the correct interest amount paid or deposits traced etc. So, should I be excluded from P2P lending, or should platforms be encouraged to make their lending and businesses more suitable for all? Having been around here long enough I’d also say there are a fair few self-proclaimed BH’s who take whinging to a whole new level, and even threaten the volunteer forum ‘staff’ with litigation, let alone the platforms, it certainly doesn’t seem to be the preserve of retail minnows to me. It's based on conversations with a number of platforms, that is what they say. I'm sorry but I don't have documented evidence of calls by investment size. It's also the reason the likes of BC have £5k minimum investment per loan. If you think I sound like Theresa May then I feel I'm within my rights to say you sound like Jeremy Corbyn, "for the many not the few". It's capitalism, not some sort of social enterprise. It's not relevant how P2P (or FS) started out, it's a business and everyone is in it to make money; lenders, borrowers and the platforms. FS has recently changed ownership and he wants to go in a different direction and that's his call. FS is clearly not a platform for inexperienced, small retail investors and this is a step in that direction (in fact I wouldn't be surprised if the FCA eventually brings in minimum investment sizes for self select loans) I find this comment (the bit I’ve highlighted) a bit unbelievable what evidence is it based on?
Twist it how you like but I haven't set any stereotype. I said it's the smallest investors who complain the most, that does not mean that all small investors are constantly kicking up a fuss. As with most things the small vocal minority to cause the greatest waves. It's based on having been around these parts way too long, a reasonable memory (even for deleted posts), and conversations with a few of them 😉. I’m sorry I don’t have documented evidence of which UW/BH has received additional information on which loan/s. Really bg , we’re all here to make (more) money are we not? I don’t think there should be a bar on P2P investing based on wealth. Why should P2P be more restrictive than other investments which can/might cause financial damage to the unwary. I’d rather see the FCA toughen up on the platforms and their own regime, and let investors be responsible for their own investments. Obviously P2P Platforms will do what they feel is in their best interests commercially; however, I fail to see why I should not be able to comment on a practise/change I don’t agree with or see downsides to, and if the reason you have stated is the cause for their action then I think it’s a pretty blunt instrument.
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arby
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Post by arby on Mar 23, 2019 16:14:05 GMT
To those stating that this is done to avoid hassle from the low investing lenders, or to protect the ill-informed retailer investors from their own ineptitude by pricing them out of the market; these arguments seem to be voided when we consider that the two loans we've seen with this feature have had a large difference in minimum bid. The minimum is purely a function of loan size, as FS stated, and has nothing to do with avoiding the small investors otherwise it would be a fixed minimum. I'm quite sure that FS won't be putting a £500 minimum on a £2k diamond anytime soon, even though there have been plenty of gemstone losses recently and small investors could need protecting from those losses too.
It also makes diversification harder if one has to put either £500+ or zero in a single loan.
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bg
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Post by bg on Mar 23, 2019 16:31:06 GMT
It's based on conversations with a number of platforms, that is what they say. I'm sorry but I don't have documented evidence of calls by investment size. It's also the reason the likes of BC have £5k minimum investment per loan. If you think I sound like Theresa May then I feel I'm within my rights to say you sound like Jeremy Corbyn, "for the many not the few". It's capitalism, not some sort of social enterprise. It's not relevant how P2P (or FS) started out, it's a business and everyone is in it to make money; lenders, borrowers and the platforms. FS has recently changed ownership and he wants to go in a different direction and that's his call. FS is clearly not a platform for inexperienced, small retail investors and this is a step in that direction (in fact I wouldn't be surprised if the FCA eventually brings in minimum investment sizes for self select loans) I find this comment (the bit I’ve highlighted) a bit unbelievable what evidence is it based on?
Twist it how you like but I haven't set any stereotype. I said it's the smallest investors who complain the most, that does not mean that all small investors are constantly kicking up a fuss. As with most things the small vocal minority to cause the greatest waves. It's based on having been around these parts way too long, a reasonable memory (even for deleted posts), and conversations with a few of them 😉. I’m sorry I don’t have documented evidence of which UW/BH has received additional information on which loan/s. Really bg , we’re all here to make (more) money are we not? I don’t think there should be a bar on P2P investing based on wealth. Why should P2P be more restrictive than other investments which can/might cause financial damage to the unwary. I’d rather see the FCA toughen up on the platforms and their own regime, and let investors be responsible for their own investments. Obviously P2P Platforms will do what they feel is in their best interests commercially; however, I fail to see why I should not be able to comment on a practise/change I don’t agree with or see downsides to, and if the reason you have stated is the cause for their action then I think it’s a pretty blunt instrument. I never said there should be any bar. I have just agreed with a comment saying that it is often people with the minimum investment who kick up the biggest fuss when loans run into difficulties - it is this that you said is unbelievable. There has never been any sort of social element to FS' lending....unless you'd call lending money to well off individuals who are pawning jewellery, sports car etc a social enterprise. FC I get...lending money to small businesses who create jobs, when banks won't lend, but not FS. Personally I think there should be more individual accountability. I really do not like the culture where people are happy to take the profits but try and blame someone else when things go wrong (and that does not include certain loans where there have been blatant errors made by the platform). Same goes for things like PPI...yes there may have been pressure selling but people took it out happy to have the insurance but now they all claim they were missold. I have not said that is the reason FS have started bringing in minimum bids either. They have brought in minimum bids because they think a lot of the lenders do not understand the risks and this sort of investing is not really suitable for them. I am fairly indifferent on this because of the reasons given above but can understand there may need to be some protections for some people. As I said before, this is not an unusual thing, other platforms have a much higher minimum bid limit for this very reason. The FCA classify some forms of investing as only suitable for 'sophisticated investors' and that often means you have to have a minimum of £250k investable assets. It would not surprise me if at some point the FCA classified this sort of investing only suitable for such investors and I see moves like this a pre-emptive move by platforms to stop this from happening. Of course a side effect of this move will be that they dramatically reduce the amount of calls, complaints, aggressive chats etc they get and they won't say no to that but I did not say this is the reason for the change. Feel free to comment on this change as much you like, I am indifferent to the changes myself. However if you don't think setting a slightly higher minimum bid won't encourage people to do DD or think twice before investing willy nilly then I have to disagree with you on that. Personally I do believe people should be able to invest willy nilly if they so wish but the FCA probably don't (unless they are a sophisticated investor).
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iRobot
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Post by iRobot on Mar 23, 2019 17:24:08 GMT
Yes this is exactly right. For some reason its the smallest investors (ie those with a few £25 investments in loans) who are constantly on the phone asking for updates, threatening legal action etc. There is also the argument that these are very high risk investments and are not really suitable for people spraying £25 into a few loans. There's little incentive for people to do any DD or get a handle of the risks for this sort of investment and just creates a load of hassle for the platform. If they make it £500 minimum per loan (say) then perhaps a lot more people will think before investing. What’s this, a May moment, blame the investors why don’t you? P2P started out with Zopa in the UK and a concept of social lending – match lenders to borrowers through an on-line platform and win win win - platform profits, borrowers get lower rates than through traditional financial institutions and investors get better rates. Whilst the social element has virtually evaporated, and the sector has moved on in other ways, I don’t see that it should be aiming to exclude retail investors, turn into a 'nanny state', or to be the preserve of the rich investor. I don’t invest on FS and have no axe to grind with them at all, I am using them (because you posted on their board) as an example which could equally apply to other P2P Platforms. FS started off with pawn loans I believe and no doubt welcomed and encouraged as many investors as it could get, and as BH’s have stated here and on other platforms £25 bids aren’t worth getting out of bed for, it’s a good job there were a few minnows investing or the Platform wouldn’t have got established. I believe it’s performance on communicating (generally) with investors and some of its pawn loans has been pretty atrocious so maybe that’s a source of all the ‘minnows’ complaints? Probably not an issue for BH’s and underwriters who seem to get privileged information from the platforms. Assuming FS isn’t a fly by night P2P set up, out for a quick buck, and it’s in it for the long term then surely it needs to develop systems and strategies to deal with any complaints it gets, which should include communication, ‘education’, and performance, but not in my opinion trying to exclude some investors. In addition, I am sure there must also be techniques in any company environment for dealing with ‘difficult’ customers, who I bet come in all sorts. I see a lot in the sector to complain about and in my view it’s a good thing because it needs to be held 'to account', and has and is slowly improving the sector as a whole. On a personal note I’m a vanilla minnow retail investor, but I certainly don’t meet your stereotype I’ve only ever telephoned one platform and that was AC concerning their 2FA – I didn’t submit a formal complaint though. I have contacted a fair few about mistakes and issues with my account, as I should have done if I wanted the correct interest amount paid or deposits traced etc. So, should I be excluded from P2P lending, or should platforms be encouraged to make their lending and businesses more suitable for all? Having been around here long enough I’d also say there are a fair few self-proclaimed BH’s who take whinging to a whole new level, and even threaten the volunteer forum ‘staff’ with litigation, let alone the platforms, it certainly doesn’t seem to be the preserve of retail minnows to me. Not looking to support one side or the other as I acknowledge both positions have aspects which are merit worthy. However, might be worth mentioning that BondMason introduced a £5k limit stating:" The rationale for the minimum threshold is to ensure to we can service clients effectively. Too many small(er) clients meant that we couldn't offer everyone a sustainable approach of direct interaction with the the team here, which is important to us." (Perhaps, stevefindlay could pitch in on how that's worked out for BM?) And by way of balance, BridgeCrowd used to be a £30,000 entry point , so they've actually reduced their min investment amount 
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arby
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Post by arby on Mar 23, 2019 17:44:29 GMT
They have brought in minimum bids because they think a lot of the lenders do not understand the risks and this sort of investing is not really suitable for them. I am fairly indifferent on this because of the reasons given above but can understand there may need to be some protections for some people. As I said before, this is not an unusual thing, other platforms have a much higher minimum bid limit for this very reason. The FCA classify some forms of investing as only suitable for 'sophisticated investors' and that often means you have to have a minimum of £250k investable assets. It would not surprise me if at some point the FCA classified this sort of investing only suitable for such investors and I see moves like this a pre-emptive move by platforms to stop this from happening If that was true then fine, but unless you have some direct link to FS you are just stating your opinion as fact, but it simply doesn't stand up to even a cursory review. If FS were doing this to limit the risk to small investors then why would they be scaling the minimum bid to the size of the loan? As I pointed out above, are you stating that FS will put a £500 minimum bid on a £1k diamond? If they're trying to protect small lenders then they would have to do this too. What about a £30k property loan? That's still a hell of a lot of money for a small investor to risk, but I'm pretty sure FS won't put £500 minimum bids on that.
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bg
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Post by bg on Mar 23, 2019 17:56:32 GMT
They have brought in minimum bids because they think a lot of the lenders do not understand the risks and this sort of investing is not really suitable for them. I am fairly indifferent on this because of the reasons given above but can understand there may need to be some protections for some people. As I said before, this is not an unusual thing, other platforms have a much higher minimum bid limit for this very reason. The FCA classify some forms of investing as only suitable for 'sophisticated investors' and that often means you have to have a minimum of £250k investable assets. It would not surprise me if at some point the FCA classified this sort of investing only suitable for such investors and I see moves like this a pre-emptive move by platforms to stop this from happening If that was true then fine, but unless you have some direct link to FS you are just stating your opinion as fact, but it simply doesn't stand up to even a cursory review. If FS were doing this to limit the risk to small investors then why would they be scaling the minimum bid to the size of the loan? As I pointed out above, are you stating that FS will put a £500 minimum bid on a £1k diamond? If they're trying to protect small lenders then they would have to do this too. What about a £30k property loan? That's still a hell of a lot of money for a small investor to risk, but I'm pretty sure FS won't put £500 minimum bids on that. There's a massive difference between a large development loan against a tower block development in Glasgow and a loan against an easy to value (and sell) Diamond. Both in terms of risk and understanding.
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jonno
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Post by jonno on Mar 23, 2019 18:15:04 GMT
I'm really glad to say that this change will not affect me one jot as I will never invest with FS ever again.
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Godanubis
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Post by Godanubis on Mar 23, 2019 19:37:57 GMT
If that was true then fine, but unless you have some direct link to FS you are just stating your opinion as fact, but it simply doesn't stand up to even a cursory review. If FS were doing this to limit the risk to small investors then why would they be scaling the minimum bid to the size of the loan? As I pointed out above, are you stating that FS will put a £500 minimum bid on a £1k diamond? If they're trying to protect small lenders then they would have to do this too. What about a £30k property loan? That's still a hell of a lot of money for a small investor to risk, but I'm pretty sure FS won't put £500 minimum bids on that. There's a massive difference between a large development loan against a tower block development in Glasgow and a loan against an easy to value (and sell) Diamond. Both in terms of risk and understanding. Big smal or huge none of it matters if you don’t hold it until redemption the only think is the ability to sell at a price higher than you paid . Saves all the worrying etc. 
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bg
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Post by bg on Mar 24, 2019 8:21:22 GMT
There's a massive difference between a large development loan against a tower block development in Glasgow and a loan against an easy to value (and sell) Diamond. Both in terms of risk and understanding. Big smal or huge none of it matters if you don’t hold it until redemption the only think is the ability to sell at a price higher than you paid . Saves all the worrying etc. Just like in a Ponzi scheme not everyone can make money, not everyone can employ this technique - it requires some people (the majority) to be holding the loan when the music stops.
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sjg
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Post by sjg on Mar 24, 2019 16:17:54 GMT
Personally I think FS should offer the investors who already have under the min bid amount to leave these loans if they wish now with any accrued interest and also keep the minimum bid as the starting point for any secondary market sales. Or at the very least state what they are going to do when these loans fill with regards the secondary market as that hasn't been mentioned as far as I can see yet. Note I'm very much a minnow but do not have anything invested in these loans (though do have loans on FS) and also have never complained to any P2P site though might have a few choice words for the owners of Collateral if I was ever to meet them. |
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Post by df on Mar 24, 2019 17:53:47 GMT
Personally I think FS should offer the investors who already have under the min bid amount to leave these loans if they wish now with any accrued interest and also keep the minimum bid as the starting point for any secondary market sales. Or at the very least state what they are going to do when these loans fill with regards the secondary market as that hasn't been mentioned as far as I can see yet. Note I'm very much a minnow but do not have anything invested in these loans (though do have loans on FS) and also have never complained to any P2P site though might have a few choice words for the owners of Collateral if I was ever to meet them. I also also have never complained to any platform. I've only contacted p2p platforms several times with minor enquiries such as chasing LW bonus or being stuck in BM queue, which were administrative errors and resolved imminently after my calls. As for FS increasing the minimum. I don't mind - it's up to platform what criteria they wish to impose and it's up to me whether I want to take part or not. What I don't like is how it's done - changing criterion in the middle of the loan filling process and not communicating this change and possible implications to lenders who have already invested at below minimum. I agree, FS should either offer to return existing small bids or reassure bidders that they will be able to put their bids on SM.
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Post by stevefindlay on Mar 25, 2019 7:18:28 GMT
I find this comment (the bit I’ve highlighted) a bit unbelievable what evidence is it based on? What’s this, a May moment, blame the investors why don’t you? P2P started out with Zopa in the UK and a concept of social lending – match lenders to borrowers through an on-line platform and win win win - platform profits, borrowers get lower rates than through traditional financial institutions and investors get better rates. Whilst the social element has virtually evaporated, and the sector has moved on in other ways, I don’t see that it should be aiming to exclude retail investors, turn into a 'nanny state', or to be the preserve of the rich investor. I don’t invest on FS and have no axe to grind with them at all, I am using them (because you posted on their board) as an example which could equally apply to other P2P Platforms. FS started off with pawn loans I believe and no doubt welcomed and encouraged as many investors as it could get, and as BH’s have stated here and on other platforms £25 bids aren’t worth getting out of bed for, it’s a good job there were a few minnows investing or the Platform wouldn’t have got established. I believe it’s performance on communicating (generally) with investors and some of its pawn loans has been pretty atrocious so maybe that’s a source of all the ‘minnows’ complaints? Probably not an issue for BH’s and underwriters who seem to get privileged information from the platforms. Assuming FS isn’t a fly by night P2P set up, out for a quick buck, and it’s in it for the long term then surely it needs to develop systems and strategies to deal with any complaints it gets, which should include communication, ‘education’, and performance, but not in my opinion trying to exclude some investors. In addition, I am sure there must also be techniques in any company environment for dealing with ‘difficult’ customers, who I bet come in all sorts. I see a lot in the sector to complain about and in my view it’s a good thing because it needs to be held 'to account', and has and is slowly improving the sector as a whole. On a personal note I’m a vanilla minnow retail investor, but I certainly don’t meet your stereotype I’ve only ever telephoned one platform and that was AC concerning their 2FA – I didn’t submit a formal complaint though. I have contacted a fair few about mistakes and issues with my account, as I should have done if I wanted the correct interest amount paid or deposits traced etc. So, should I be excluded from P2P lending, or should platforms be encouraged to make their lending and businesses more suitable for all? Having been around here long enough I’d also say there are a fair few self-proclaimed BH’s who take whinging to a whole new level, and even threaten the volunteer forum ‘staff’ with litigation, let alone the platforms, it certainly doesn’t seem to be the preserve of retail minnows to me. Not looking to support one side or the other as I acknowledge both positions have aspects which are merit worthy. However, might be worth mentioning that BondMason introduced a £5k limit stating:" The rationale for the minimum threshold is to ensure to we can service clients effectively. Too many small(er) clients meant that we couldn't offer everyone a sustainable approach of direct interaction with the the team here, which is important to us." (Perhaps, stevefindlay could pitch in on how that's worked out for BM?) And by way of balance, BridgeCrowd used to be a £30,000 entry point , so they've actually reduced their min investment amount It's worked well, insofar that we are able to retain a high-touch interaction with our clients. However, it should be noted that the minimum we set was in relation to (1) the complexity of our service - how difficult it is to explain and understand and (2) that clients get a minimum of 50 loans in their portfolio. We would prefer to have a lower entry threshold than £5,000 though; and we are working on simplifying our product to achieve that. Although, the new changes are likely to require Sophisticated Investor / HNW investor tests in accordance with FCA guidelines. So its always going to be a bit of a compromise...
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arby
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Post by arby on Mar 25, 2019 10:53:22 GMT
Not looking to support one side or the other as I acknowledge both positions have aspects which are merit worthy. However, might be worth mentioning that BondMason introduced a £5k limit stating:" The rationale for the minimum threshold is to ensure to we can service clients effectively. Too many small(er) clients meant that we couldn't offer everyone a sustainable approach of direct interaction with the the team here, which is important to us." (Perhaps, stevefindlay could pitch in on how that's worked out for BM?) And by way of balance, BridgeCrowd used to be a £30,000 entry point , so they've actually reduced their min investment amount It's worked well, insofar that we are able to retain a high-touch interaction with our clients. However, it should be noted that the minimum we set was in relation to (1) the complexity of our service - how difficult it is to explain and understand and (2) that clients get a minimum of 50 loans in their portfolio. We would prefer to have a lower entry threshold than £5,000 though; and we are working on simplifying our product to achieve that. Although, the new changes are likely to require Sophisticated Investor / HNW investor tests in accordance with FCA guidelines. So its always going to be a bit of a compromise... Thank you for taking the time to respond. It's interesting to hear so many people talking about the merits of platforms giving individual customer service. Personally, I just want one update from FS that is well researched, evidenced, and often reflects what reality will be. This same update would be given to all investors, small and large. Not only do I not require 'individual' service, I'm not even sure what I would even ask for. This isn't a criticism, I'm genuinely wondering what is the individual service that other platforms provide that I'm missing out on. Any ideas?
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benaj
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Post by benaj on Mar 25, 2019 12:13:49 GMT
I suppose the temporary effect for this min bid restrictions is cash inflow to FS, i.e. investors may need to top up instead of reinvest from completed loans.
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