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Post by Ace on Apr 7, 2019 8:27:05 GMT
are AC same risk as FS, MT etc? I generally thought not, although someone mentioned number of defaulters in AC, on a thread a month or two back. thanks Ace. My question is more about the platform, as it was suggested above, that they easily had 2% spare given that they aren't ordinarily offering the earnings of those other platforms. My question is whether it should be assumed that these platforms are all lending to the same risk of borrowers. I'm curious as to why AC need so much new money - perhaps I've missed some news of a new deal. Is it owing to a new boom in reliable borrowers, or is it to support the money movement in the Access accounts. Ah, ok. They need "so much new money" because they regularly generate very large volumes of loans and are trying to grow their business further. Their cashback offers are a welcome boost for lenders. For AC they are a clever way of keeping invested cash on their platform cheaply. The cashback is only paid on new money. To achieve the cashback you have to keep your existing cash on the platform for long qualifying periods, but, crucially, the existing money does not earn cashback. So, the offer is an incentive to lend new money and a disincentive to withdraw old money. Therefore, when someone needs access to their cash they are more likely to take it from other sources than from AC. Nothing wrong with this. It makes perfectly good business sense. But, as I said, it's a very cheap way of generating new cash and keeping it on the platform. Your question regarding whether they are lending to the same risk borrowers must generally be 'no'. FS and MT simply aren't interested in lending to borrowers who are able to get rates in the ranges that AC offer; sometimes as low as 4.5%. That's not to say that there aren't some loans on AC that have comparable risks to the other two though.
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lobster
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Post by lobster on Apr 7, 2019 8:53:01 GMT
Nearly all my P2P funds are split between AC (70% approx) and Ratesetter (30% approx). I'm now very tempted to take advantage of this latest offer and move all my RS funds across to AC.
I would plan on spreading the funds across relatively low risk MLA loans and maybe the access accounts too. Yes, I know that I shouldn't put all my eggs in one basket, but I do have quite a bit of faith in AC. OK some of the individual loans will almost certainly run into difficulties, but personally I believe that the platform itself is reliable ie. AC ain't going bust any time soon, and as we know all too well, the same cannot be said for a number of other platforms.
So ...... am I being an idiot ? Should I necessarily be using multiple platforms given that I have quite a bit of confidence in AC ?
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bg
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Post by bg on Apr 7, 2019 8:59:27 GMT
If you go back a couple of years the AC used to come in for a lot of criticism on this forum for their "low rates".
I had numerous conversations with some of their directors at the time and the would always say, many of the high rate loans offered by the likes of Lendy has been presented to AC and quickly rejected by their credit department. They would say, wait to see how things pan out over the next couple of years, it won't be pretty and that is exactly what has happened.
It's all a question of degrees of risk. Even a low rate loan has some risk and if you write enough of them then there will be some that run into problems - but the % of defaulted/distressed loans on AC is significantly lower than the other platforms mentioned. There is a place in the market for the riskier loans but the problem is that so many people at the moment just look at the headline rates and determine that the highest is the "best" loan without appreciating the risk. There's a reason people are borrowing the money at 20-25% and the assets are often very illiquid.
Regarding the stream of offers, AC have a huge amount of supply that they can't meet with demand right now. They aren't spending money on advertising as many others do and deem it better to pay that money to the investors in the form of cashback/incentives. I think we will all appreciate an extra 1-2% return a year as opposed to an expensive Assetz Capital advert on ITV1 (like Funding Circle).
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lara
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Post by lara on Apr 7, 2019 9:08:14 GMT
This is similar to the situation that I find myself in. I became disillusioned with Ratesetter last year and moved 99.9% of my p2p funds to AC.
Because I keep my overall p2p investment as a fairly small (around 5%) proportion of my total investments and I use the access accounts only, I am comfortable with this set up.
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zlb
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Post by zlb on Apr 7, 2019 16:55:00 GMT
thanks Ace. My question is more about the platform, as it was suggested above, that they easily had 2% spare given that they aren't ordinarily offering the earnings of those other platforms. My question is whether it should be assumed that these platforms are all lending to the same risk of borrowers. I'm curious as to why AC need so much new money - perhaps I've missed some news of a new deal. Is it owing to a new boom in reliable borrowers, or is it to support the money movement in the Access accounts. Ah, ok. They need "so much new money" because they regularly generate very large volumes of loans and are trying to grow their business further. Their cashback offers are a welcome boost for lenders. For AC they are a clever way of keeping invested cash on their platform cheaply. The cashback is only paid on new money. To achieve the cashback you have to keep your existing cash on the platform for long qualifying periods, but, crucially, the existing money does not earn cashback. So, the offer is an incentive to lend new money and a disincentive to withdraw old money. Therefore, when someone needs access to their cash they are more likely to take it from other sources than from AC. Nothing wrong with this. It makes perfectly good business sense. But, as I said, it's a very cheap way of generating new cash and keeping it on the platform. Your question regarding whether they are lending to the same risk borrowers must generally be 'no'. FS and MT simply aren't interested in lending to borrowers who are able to get rates in the ranges that AC offer; sometimes as low as 4.5%. That's not to say that there aren't some loans on AC that have comparable risks to the other two though. I see what you mean. And they don't refer to it as 'fixed rate' or 'fixed term', so there isn't that off-putting wording that banks use, associated with it. I get the emails for loans - at least I thought it was all new loans, but they don't appear to be increasing in volume though (I use the Access accounts only. More loan DD for me).
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Post by mrclondon on Apr 7, 2019 18:11:46 GMT
I get the emails for loans - at least I thought it was all new loans, but they don't appear to be increasing in volume though The emails for new loans (assuming they don't get eaten by a spam filter as a % of mine seem to) only tell a small part of the story. Over the last 18 months or so, a significant chunk of AC's new loans have been tranched development loans. These may go quiet for a few months after the initial drawdown, but then every month for many months they require a new tranche of funding. These simply get added to the existing loan with just a note on the activity tab advising of this. Just as with new loans, these tranches (of course !) need to be funded, initially via the access accounts or via external underwriters.
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Post by df on Apr 7, 2019 18:54:30 GMT
thanks Ace. My question is more about the platform, as it was suggested above, that they easily had 2% spare given that they aren't ordinarily offering the earnings of those other platforms. My question is whether it should be assumed that these platforms are all lending to the same risk of borrowers. I'm curious as to why AC need so much new money - perhaps I've missed some news of a new deal. Is it owing to a new boom in reliable borrowers, or is it to support the money movement in the Access accounts. Ah, ok. They need "so much new money" because they regularly generate very large volumes of loans and are trying to grow their business further. Their cashback offers are a welcome boost for lenders. For AC they are a clever way of keeping invested cash on their platform cheaply. The cashback is only paid on new money. To achieve the cashback you have to keep your existing cash on the platform for long qualifying periods, but, crucially, the existing money does not earn cashback. So, the offer is an incentive to lend new money and a disincentive to withdraw old money. Therefore, when someone needs access to their cash they are more likely to take it from other sources than from AC. Nothing wrong with this. It makes perfectly good business sense. But, as I said, it's a very cheap way of generating new cash and keeping it on the platform. Your question regarding whether they are lending to the same risk borrowers must generally be 'no'. FS and MT simply aren't interested in lending to borrowers who are able to get rates in the ranges that AC offer; sometimes as low as 4.5%. That's not to say that there aren't some loans on AC that have comparable risks to the other two though. I recall some AC borrowers also had loans with Ly or FS? But I think AC's approach to risk has changed since. Most non-performing loans in my loan book are very old.
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Post by df on Apr 7, 2019 19:29:43 GMT
Nearly all my P2P funds are split between AC (70% approx) and Ratesetter (30% approx). I'm now very tempted to take advantage of this latest offer and move all my RS funds across to AC. I would plan on spreading the funds across relatively low risk MLA loans and maybe the access accounts too. Yes, I know that I shouldn't put all my eggs in one basket, but I do have quite a bit of faith in AC. OK some of the individual loans will almost certainly run into difficulties, but personally I believe that the platform itself is reliable ie. AC ain't going bust any time soon, and as we know all too well, the same cannot be said for a number of other platforms. So ...... am I being an idiot ? Should I necessarily be using multiple platforms given that I have quite a bit of confidence in AC ? Looking at AC's history and their current position I personally don't think it is the one of high risk to collapse. I have an opposite strategy, I have many baskets. I think it is safer, but depends on what baskets you choose. I've chosen a few wrong baskets... wouldn't have lost any capital if just I put all my p2p money into AS's access accounts. If I was in your position, I would put RS 30% in one of the access accounts (or several, depending on access needs) and not bother with MLA.
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Post by bikeman on Apr 7, 2019 19:31:04 GMT
Raising funds to bail out us wind farm 'investors'....
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Post by df on Apr 7, 2019 19:56:19 GMT
Raising funds to bail out us wind farm 'investors'.... These days battle for funds is a trend across platforms. Invest new money + don't withdraw for 12 months = bonus offer is not limited to AC only . I don't think this has any direct relation to I**.
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Post by BrianC on Apr 7, 2019 21:12:59 GMT
Raising funds to bail out us wind farm 'investors'.... I have similar concerns. Is AC just becoming one huge complicated Ponzi scheme? New money constantly required to pay existing investors returns and bail out bad investments? Growth is great but not at any price.
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Post by chris on Apr 8, 2019 5:57:30 GMT
Raising funds to bail out us wind farm 'investors'.... I have similar concerns. Is AC just becoming one huge complicated Ponzi scheme? New money constantly required to pay existing investors returns and bail out bad investments? Growth is great but not at any price. We perform daily client money reconciliations the results of which are reported back to the FCA, who also review our governance of all things client money. I can categorically state that we are not taking funds from lenders to bail out anyone. But that really shouldn't need stating.
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blender
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Post by blender on Apr 8, 2019 8:08:00 GMT
I have similar concerns. Is AC just becoming one huge complicated Ponzi scheme? New money constantly required to pay existing investors returns and bail out bad investments? Growth is great but not at any price. We perform daily client money reconciliations the results of which are reported back to the FCA, who also review our governance of all things client money. I can categorically state that we are not taking funds from lenders to bail out anyone. But that really shouldn't need stating.It does not need stating. What we need is a dislike button for silly and potentially libellous comments, to save the poor moderators from wasting their time.
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bg
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Post by bg on Apr 8, 2019 8:10:51 GMT
Platforms just can't win sometimes.
They get criticised when demand outstrips supply as there aren't enough loans to invest in. They react to this by hiring a load of regional origination/credit officers who build a big pipeline of good quality loans. To increase demand to meet this new supply they make the decision to enhance lender rates by running promotions as opposed to running an expensive advertising campaign. Lenders then react by questioning the platforms health/motives.
AC do not have a banking licence, they can't access the central bank or money markets for easy access to liquidity, there is no money multiplier in play here. It's a strict case of matching lenders with borrowers, a constant balancing exercise.
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Post by chris on Apr 8, 2019 9:02:30 GMT
All the same, I’d rather AC just offered boring reliable occasionally slightly adjusted rates on it’s three access accounts. Every time another promotion comes along I wince and worry about why AC are doing it this time and their long term stability. What's better for our long term financial stability - paying 1% cashback on £20m or so of new deposits, or paying an uplifted rate of even 0.25% on £160m+ in the access accounts? Is an uplift in rate of 0.25% going to be as effective in bringing in those additional funds?
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