XIRR on my PP account including dividends and revaluations over about 3 years is 3.82%, I stopped adding funds following the rate increases last year, but reducing the return by the AUM fee will make this platform unattractive to me for existing investments.
I am going to file a report about PP and these fee increases with the FCA. There needs to be regulatory protection for investors against this kind of behaviour.
I have told PP no more business from me.
These P2P outfits seem to have no idea how to manage customer relationships.
There is an old adage - penny wise, pound foolish. There are plenty of other places where PP members can invest their money. Be careful PP about losing them. PP does not give the best returns and also has leverage risk in a falling market so not much incentive for customers upset by these new charges to stay with PP.
Not sure I understand the AUM. Are we being charged directly for that or is it just the SPV? Or both?
AIUI charged to SPV but has the effect of reducing dividend payments, so it's us that's paying it even if we aren't directly handing over cash as we are for the account fee.
Minor shareholder in AC, Brickowner, Welendus, W.alpha, Propifi, Orca, Ccube, Ass.XChange ABL
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The AUM charge must be charged to the investor as there are different rates depending upon your total investment.
(The central fund 1% is charged to the SPV.)
What happens to your 1% contribution to the central fund when you sell your shares? Presumably you get it back and the buyer pays in?
Actually I am wrong. In searching for more details I found this update / clarification. The SPV is charged the 1.2% and then those with larger portfolios will get a rebate.
In addition the 1% contribution to the central fund is charged to the SPV. You might hope that the price of the shares doesn't drop much because of the latter charge, because the SPV has a lower charge on exit, but as the shares might be dropping 5% - 10% because of the other changes it is going to be hard to tell.
What will be truly shocking is that these charges are based on the official valuation, but my guess is that not much will be trading close to this valuation for some time, or will official valuations drop substantially to reflect the lower dividend? (They should, a buy to let that used to yield 3% will now yield 1.8%.)
The retroactivevAUM charge is a very sneaky charge.
Even if they cap it I don’t see how they can be trusted again
I agree, my working assumption is that I'm on my way out; the question is how much can I sell before 5th February, and how much I have to hold until the 5th anniversary?
(I might change that if the discounts are very substantial - but even then I'm not sure exactly how to value these new charges, in particular what probability to assign to the vote to wind up after five years.)
Edit:- The AUM charge is about 30% of my monthly dividend!
My position is slightly different, all the new fees account for 0.8% p.a.of total portfolio value while account fee (£14.4 annual charge) is 70% the new fees. Mainly because I have less equity holding.
EDIT: I had 6k equity shares in PP at peak before re balancing my portfolio earlier this year.