webwiz
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Post by webwiz on Oct 14, 2014 6:40:07 GMT
I spread my investments over 3 platforms: Zopa, Savings stream and Wellesley. There is enormous variation in the return just among these three, and of course there are many others. Common sense suggests that the higher the return the higher the risk should be. Does anyone know of any serious attempt to quantify the risks? Or do we just have to wait several years to see the level of losses?
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Post by jackpease on Oct 14, 2014 7:49:52 GMT
I think we have to wait years, yes - FC is relatively mature and defaults roll in so it is unpopular but at least has a track record. Zopa and RS absorbs individual loan risk but I'm not sure other platforms have been fully tested yet and we are sort of left to trust which can be skewed by whether the platform looks nice and are nice to their customers.
Bridging loans are starting to stress test Assetz - and in a few days the first SS bridging loan becomes due so that'll prove interesting. The bridging loan fad will allow a direct comparison between Assetz/SS/FC's risk management procedures - how they deal with those will perhaps allow us to better assess the platform risk (but probably not quantify it).
Jack P
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Post by Ton ⓉⓞⓃ on Oct 14, 2014 8:47:26 GMT
I think we have to wait years, yes - FC is relatively mature and defaults roll in so it is unpopular but at least has a track record. Zopa and RS absorbs individual loan risk but I'm not sure other platforms have been fully tested yet and we are sort of left to trust which can be skewed by whether the platform looks nice and are nice to their customers. Bridging loans are starting to stress test Assetz - and in a few days the first SS bridging loan becomes due so that'll prove interesting. The bridging loan fad will allow a direct comparison between Assetz/SS/FC's risk management procedures - how they deal with those will perhaps allow us to better assess the platform risk (but probably not quantify it). Jack P I know very little about SS but can you say which bridge is due soon? Thanks
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Post by jackpease on Oct 14, 2014 9:04:48 GMT
>>>Which SS loan
As I read it SS bridging loan 001 finishes in 14 days from now
SS is an unknown beast if individual loans go wrong - as they cast the loans themselves and then divvy them up to us afterwards, its really easy to simply renew the loan eg so it becomes 001a and it may not affect us on an individual basis, but 002a is soon finishing, and 003 004 the following month..... they may all just roll over without intervention from us but as with Assetz, that can be a little unsettling
Jack P
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webwiz
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Post by webwiz on Oct 14, 2014 9:36:28 GMT
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JamesFrance
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Port Grimaud 1974
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Post by JamesFrance on Oct 14, 2014 13:47:06 GMT
I am mostly concerned about spreading money over many platforms, as many newer ones have no track record and personal research finds little evidence of director experience or solid asset backing. It can be difficult to ascertain what happens if the business fails or even if the web site suddenly disappears. Some of the recent loans are very large and the legal position between lender and borrower is often not made as clear as I would like.
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Steerpike
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Post by Steerpike on Oct 14, 2014 18:01:41 GMT
Interesting.
I just checked my distribution and it works out at RS (28), Z (27), AC (11), TC (10), AG (8), W (6), FC (5), ARC (3), FK + ABL (2). In the near future I expect to invest more in W and AG and possibly ARC. The others, apart from Z, I may drip feed depending on opportunities. I think that the most time consuming per £ is easily FC and W the least. To date my most lossy in %age terms have been FC and FK.
I do wonder if this level of risk spreading will make an appreciable difference, if there is an earthquake most of the buildings will fall down. I am still in love with Alistair Darling after he saved me from slipping in to the ICE in 2009 and that was only 7%. Clearly we are taking more risk at higher rates and there are no Scottish eyebrows waiting in the wings to save us. All this to avoid death by the drip drip drip of inflation on the soft rock of low interest rates in FSCS backed accounts.
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Post by yorkshireman on Oct 14, 2014 18:35:30 GMT
Interesting. I just checked my distribution and it works out at RS (28), Z (27), AC (11), TC (10), AG (8), W (6), FC (5), ARC (3), FK + ABL (2). In the near future I expect to invest more in W and AG and possibly ARC. The others, apart from Z, I may drip feed depending on opportunities. I think that the most time consuming per £ is easily FC and W the least. To date my most lossy in %age terms have been FC and FK. I do wonder if this level of risk spreading will make an appreciable difference, if there is an earthquake most of the buildings will fall down. I am still in love with Alistair Darling after he saved me from slipping in to the ICE in 2009 and that was only 7%. Clearly we are taking more risk at higher rates and there are no Scottish eyebrows waiting in the wings to save us. All this to avoid death by the drip drip drip of inflation on the soft rock of low interest rates in FSCS backed accounts. I can decode most of these platforms but what is AG please?
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mikes1531
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Post by mikes1531 on Oct 14, 2014 19:25:52 GMT
I just checked my distribution and it works out at RS (28), Z (27), AC (11), TC (10), AG (8), W (6), FC (5), ARC (3), FK + ABL (2). In the near future I expect to invest more in W and AG and possibly ARC. The others, apart from Z, I may drip feed depending on opportunities. I think that the most time consuming per £ is easily FC and W the least. To date my most lossy in %age terms have been FC and FK. I do wonder if this level of risk spreading will make an appreciable difference, if there is an earthquake most of the buildings will fall down. I am still in love with Alistair Darling after he saved me from slipping in to the ICE in 2009 and that was only 7%. Clearly we are taking more risk at higher rates and there are no Scottish eyebrows waiting in the wings to save us. All this to avoid death by the drip drip drip of inflation on the soft rock of low interest rates in FSCS backed accounts. I can decode most of these platforms but what is AG please? Abundance Generation?
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Steerpike
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Post by Steerpike on Oct 14, 2014 22:29:06 GMT
Yes, spot on Mike, Abundance.
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Post by Ton ⓉⓞⓃ on Oct 14, 2014 22:31:48 GMT
Yes, spot on Mike, Abundance. With AG, who actually own the WT's etc, sorry I'm being very lazy.
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Steerpike
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Post by Steerpike on Oct 15, 2014 8:13:57 GMT
Abundance debentures are a long term loan usually about 20 years with a 6-8% return but the investment does not mean ownership.
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Post by davee39 on Oct 15, 2014 8:18:24 GMT
I am mostly concerned about spreading money over many platforms, as many newer ones have no track record and personal research finds little evidence of director experience or solid asset backing. It can be difficult to ascertain what happens if the business fails or even if the web site suddenly disappears. Some of the recent loans are very large and the legal position between lender and borrower is often not made as clear as I would like. jamesfrance
I share your concern, but if we don't try the new ones we won't give them a chance to grow and succeed. I think the prudence here is to keep investments relatively low and go for the loans that are secured on assets. The subject of PGs is well document on this forum and I try to invest in loans that are asset backed and where the borrower has a good credit rating. I avoid the p2p market, concentrating on the p2b. My initial philosophy was to concentrate my investments on platforms that had a fall back guarantee fund. However I have investments in FC, FK and FE, where no such funds exist. In this instance I limit the size of my overall investment. Perhaps as concerning is the sudden plethora of new platforms arriving on what seems to be a daily basis. In this instance it is sometimes difficult to get real info on the company and it's officers and I usually avoid the platforms that are offering the "to good to be true" offers. On the plus side, with more platforms chasing our limited cash fund, are we likely to see a rise in rates?
I am sorry, but I am rather amused by the idea that investors should be loyal to new platforms to give them a chance to succeed. Why? Most new P2P start-ups are offshoots of financial companies, at least one is linked to the well known altruistic charitable company known as Wonga. The businesses started up for one reason only - TO MAKE MONEY FOR THEIR OWNERS. Some offer relatively low rates to savers but charge very high rates to borrowers. The capital requirement required for a new P2P platform is insignificantly small so the market is open to anyone with a bit of cash, a web designer and a silly name. Just copy some Terms and conditions and away you go. These do NOT deserve our support. They need to be washed away by far tougher regulation because at some point investors money will be lost in a platform failure. As to the question posed by the OP. Look at this list, noting some companies do not get a mention www.p2pmoney.co.uk/statistics/size.htmThe tiny companies will be losing money. Will they still be around in 5 years time?
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bugs4me
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Post by bugs4me on Oct 15, 2014 9:57:50 GMT
jamesfrance
I share your concern, but if we don't try the new ones we won't give them a chance to grow and succeed. I think the prudence here is to keep investments relatively low and go for the loans that are secured on assets. The subject of PGs is well document on this forum and I try to invest in loans that are asset backed and where the borrower has a good credit rating. I avoid the p2p market, concentrating on the p2b. My initial philosophy was to concentrate my investments on platforms that had a fall back guarantee fund. However I have investments in FC, FK and FE, where no such funds exist. In this instance I limit the size of my overall investment. Perhaps as concerning is the sudden plethora of new platforms arriving on what seems to be a daily basis. In this instance it is sometimes difficult to get real info on the company and it's officers and I usually avoid the platforms that are offering the "to good to be true" offers. On the plus side, with more platforms chasing our limited cash fund, are we likely to see a rise in rates?
I am sorry, but I am rather amused by the idea that investors should be loyal to new platforms to give them a chance to succeed. Why? Most new P2P start-ups are offshoots of financial companies, at least one is linked to the well known altruistic charitable company known as Wonga. The businesses started up for one reason only - TO MAKE MONEY FOR THEIR OWNERS. Some offer relatively low rates to savers but charge very high rates to borrowers. The capital requirement required for a new P2P platform is insignificantly small so the market is open to anyone with a bit of cash, a web designer and a silly name. Just copy some Terms and conditions and away you go. These do NOT deserve our support. They need to be washed away by far tougher regulation because at some point investors money will be lost in a platform failure. As to the question posed by the OP. Look at this list, noting some companies do not get a mention www.p2pmoney.co.uk/statistics/size.htmThe tiny companies will be losing money. Will they still be around in 5 years time? I'm with your sentiments on this one davee39. It is up to the new P2P platform to attract new lenders/investors based upon sound commercial practice rather than relying upon sentiment. There is a P2P platform floating around that requests investment so that they can go and invest themselves in other P2P platforms. It appears that apart from the cost of the website there is zero risk to themselves. Simply looking at some of the dormant P2P platforms then IMO history will continue to repeat itself especially once FCA compliance costs start to bite. Hopefully lenders/investors do not get burnt.
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Post by yorkshireman on Oct 15, 2014 10:13:02 GMT
I am sorry, but I am rather amused by the idea that investors should be loyal to new platforms to give them a chance to succeed. Why? Most new P2P start-ups are offshoots of financial companies, at least one is linked to the well known altruistic charitable company known as Wonga. The businesses started up for one reason only - TO MAKE MONEY FOR THEIR OWNERS. Some offer relatively low rates to savers but charge very high rates to borrowers. The capital requirement required for a new P2P platform is insignificantly small so the market is open to anyone with a bit of cash, a web designer and a silly name. Just copy some Terms and conditions and away you go. These do NOT deserve our support. They need to be washed away by far tougher regulation because at some point investors money will be lost in a platform failure. As to the question posed by the OP. Look at this list, noting some companies do not get a mention www.p2pmoney.co.uk/statistics/size.htmThe tiny companies will be losing money. Will they still be around in 5 years time? I agree entirely, just because someone starts a business, of any description, it doesn’t mean that we are obliged to support them.
Personally I’m not a charity therefore I’m not in P2P for altruistic reasons although if I help someone else by lending my hard earned brass then all well and good.
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