pip
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Post by pip on Nov 14, 2019 16:17:24 GMT
As luck would have it, I just logged in and was presented with the investor choices. I was able to skip making the selection (button at bottom), and could then access my account as normal.
Having logged out and back in again, it asked me again for my choice, which I could again skip.
When it comes to placing an order, of course, there is no option to Skip. Fair enough.
Apologies I stand corrected! You are right. I am selling my investments right now and withdrawing!
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robski
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Post by robski on Nov 14, 2019 16:23:57 GMT
Probably best if this thread was moved from MT to RS. Indeed I believe it will be moved, I mis posted it and missed the message saying so.
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robski
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Post by robski on Nov 14, 2019 16:33:56 GMT
As luck would have it, I just logged in and was presented with the investor choices. I was able to skip making the selection (button at bottom), and could then access my account as normal.
Having logged out and back in again, it asked me again for my choice, which I could again skip.
When it comes to placing an order, of course, there is no option to Skip. Fair enough.
I had it as well today, logged in to transfer from my access to my ISA then withdraw (repayments for the day) I managed to skip, but on trying to move my access to ISA so I only have 1 payment coming into bank per day I was not allowed to progress until I selected. I eventually went for sophisticated. I think them relying on this would fail anyway, because the "helpful" text has different criteria to the detailed text on clicking the box. Not that it means much I know there is no protection and I don't see that anyone investing in P2P right now should expect any, unless somehow its in some sort of bundled product, although I am not sure that exists in the marketplace
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pip
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Post by pip on Nov 14, 2019 16:42:20 GMT
As luck would have it, I just logged in and was presented with the investor choices. I was able to skip making the selection (button at bottom), and could then access my account as normal.
Having logged out and back in again, it asked me again for my choice, which I could again skip.
When it comes to placing an order, of course, there is no option to Skip. Fair enough.
I had it as well today, logged in to transfer from my access to my ISA then withdraw (repayments for the day) I managed to skip, but on trying to move my access to ISA so I only have 1 payment coming into bank per day I was not allowed to progress until I selected. I eventually went for sophisticated. I think them relying on this would fail anyway, because the "helpful" text has different criteria to the detailed text on clicking the box. Not that it means much I know there is no protection and I don't see that anyone investing in P2P right now should expect any, unless somehow its in some sort of bundled product, although I am not sure that exists in the marketplace Robski - agree. The thing that annoys me is that the FCA regulations were brought in rightly or wrongly to prevent retail investors being overexposed to P2P and implement a cap of 10%. Why this was brought in for p2p but not for shares or gambling etc, not exactly sure but hey ho i get the idea. My disappointment is that by barring anybody who has more than 10% of their wealth invested in p2p from declaring themselves as restricted, surely the very people the rules were meant to help won't be if by putting self-certified sophisticated, RS hope that, as it appears, people will be free to invest in p2p without the 10% restriction. Also the RS interpretation of what is a sophisticated investor are ridiculous, investing £1 in p2p two years ago does not in anybodies book make you sophisticated. It's all a mess. I mean the entire p2p industry. Totally lost faith.
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Post by propman on Nov 14, 2019 16:47:27 GMT
FCAs concern may not so much be successful claims, it may be to deter litigation in the first place in the event of a disaster and the associated costs and adverse publicity. "Naive investor put all there money into regulated ISA and lost money" is hard to maintain when that investor has said that either they are "rich", "sophisticated" or "agreed that they will lend less than 10% of their net assets". The details would only be relevant if it all went to court.
See my question above, I do not read: "in the twelve months preceding the date below, I have not invested more than 10% of my net assets in P2P agreements or P2P portfolios".
As being the same as I have maintained less than 10% of my net assets in P2P. It seems to me that anything lent more than 12 months ago is irrelevant. So ignoring any changes in relative asset values, you could lend 10% first year, 10% second year etc. So after 10 years you could have all your money in P2P whether or not the passing of time makes you sophisticated. I agree that relending is uncertain (is this a new investment?) But think that, at least for automated relending, it probably isn't.
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pip
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Post by pip on Nov 14, 2019 16:57:57 GMT
FCAs concern may not so much be successful claims, it may be to deter litigation in the first place in the event of a disaster and the associated costs and adverse publicity. "Naive investor put all there money into regulated ISA and lost money" is hard to maintain when that investor has said that either they are "rich", "sophisticated" or "agreed that they will lend less than 10% of their net assets". The details would only be relevant if it all went to court. Personally I hate the whole concept of how 'sophisticated investor' is being used for p2p. Totally ambiguous and inappropriate way of determining whether somebody should be exempt from having 10% of their net wealth in p2p. Clearly the whole 10% thing will only be a guidance anyway, i am not really sure what my net worth is anyway and nothing to stop false declarations! The FCA made a call, people should not be investing more than 10% of their net worth in p2p. I am sure loads of people are and I am sure loads of people are hugely exposed to just one platform. If that's the case the platforms should have a plan in place to get all investors to this 10% level. Clearly investors will lie and have investments over the 10% level. But for those who don't, trying to bypass the rules by getting everybody in the very group that the rules were meant to protect to declare as sophisticated seems not good to me.
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Post by df on Nov 14, 2019 19:51:23 GMT
In my perception it's just a fancy word. Sounds very wrong when I applied it to myself as an investor (done it twice, once for Lendy and recently for GS). I'm not sure if there's any protection offered by FCA if you tick "restricted". I'd be interested to know if there is. I have raised a complaint with ratesetter as I cannot answer the questions as posed: I have more than 10% of my net worth in p2p so cannot tick "restricted" as this requires me to confirm "in the twelve months preceding the date below, I have not invested more than 10% of my net assets in P2P agreements or P2P portfolios" But then I cannot select self-certified sophisticated as I don't meet the FCAs guidelines on what a sophisticated investor is. To suggest anybody who has invested in p2p is sophisticated is ludicrous. If I am cynical this is an attempt to make all people who currently have more than 10% of their net worth in p2p to declare themselves to be sophisticated and therefore to not be subject to the 10% cap. But wasn't the 10% cap brought in to protect investors who don't know what they are doing having too much exposure to p2p, as the disaster at FS is showing why! I personally believe that the wording is totally ambiguous. When I said on the phone I cannot select any option I was told they didn't know how I could proceed and I couldn't even shut down my account without choosing an option. I will update on the outcome of my complaint. By the way it doesn't really matter whether I as a Chartered Accountant with quite a lot of experience in p2p and finance generally am 'sophisticated'. I don't qualify as such under the FCA guidelines and still have no idea what by selecting that I am sophisticated the impact on me. What I more care about is other investors, who may not have any financial awareness who will select self-certified sophisticated because either they think it sounds good for their ego (it does who wants to to be 'restricted' and unsophisticated!) or are doing it based on a few small investments.The whole thing sounds to me like a tick box exercise to cover FCA's back in future p2p crisis events. Anyone can tick any box and invest as much as they want. How can they restrict "restricted"? IMO both words (sophisticated and restricted) can be misleading in this context. What I liked about GS questionnaire was an extra layer of encouragement for new investors to read details of how the platform operates and confirm their understanding of the risk involved.
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pip
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Post by pip on Nov 14, 2019 20:25:15 GMT
There are three separate issues here:
1) Can the 10% investment limit be enforceable give that a) people may not not what their net wealth is, b) people may wrongly declare that their investments in p2p are under 10% of net wealth and c) there seems to be no way for the platform either to know what somebodies net wealth is or what somebodies p2p investments on other platforms are. Therefore the test will always be a self declaration thing and liable to easy circumvention.
My opinion: probably not but better than nothing.
2) Assuming people do not lie or misjudge their wealth etc when making these declarations should anybody be exempt from the 10% limit. Is it right that some people qualify as sophisticated or high net worth and that these people are not subject to the 10% limit. If the answer to this is yes it poses two more fundamental questions, a) are the fca's definitions of a sophisticated investor relevant to whether somebody should be investing more than 10% of their investments in p2p lending and b) are the questions posed by p2p lenders adequately to for investors to make the correct declaration?
My opinion on 2a: No My opinion on 2b: If ratesetters are to go by absolutely not. Ratesetter has included any p2p investment experience in last two years as an example of somebody being a sophisticated investor. This is clear to me crazy and a wild distortion of the fca's guidelines of what a sophisticated investor is.
3) Will the rules protect investors who are over exposed to p2p. My opinion generally: Only if platforms are pro-actively identifying people who are currently over exposed and helping them to get their investments in p2p below 10% of net worth. My opinion for ratesetter: Their definition of a restricted investor specifically requires somebody to certify that they do not have over 10% of net worth in p2p investments. Therefore the very people the regulations were designed to help are barred from declaring as a restricted investor and can only choose that they are either sophisticated or high net worth. This is crazy and in my opinion either stupid or immoral. Not a great analogy but its like saying to a compulsive gambler that you can't self exclude if you have gambled before and gambled a lot. That should not exclude somebody from self excluding but these are precisely the people that need help!
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ilmoro
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'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
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Post by ilmoro on Nov 14, 2019 20:38:16 GMT
Couple of observations
Has the handbook been updated to reflect the addition of P2P to the activities covered by FCA financial promotion rules? If not this debate is acting on false premise.
I very much doubt that RS, or any other platform have produced their version of the certification criteria without FCA or legal advice.
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It has never been a requirement for providers to verify that clients aren't lying when they sign a legal declaration of their status. People are expected to take responsibility for themselves. If they don't understand the declaration or the suitability test they shouldn't be investing. Providers aren't required to liase to verify holdings elsewhere.
Inevitably there is going to be a transition period where some people of over exposed for their category, so they can't invest more until they after regularised their position
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pip
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Post by pip on Nov 14, 2019 20:44:49 GMT
Couple of observations Has the handbook been updated to reflect the addition of P2P to the activities covered by FCA financial promotion rules? If not this debate is acting on false premise. I very much doubt that RS, or any other platform have produced their version of the certification criteria without FCA or legal advice. Both good points, but does that mean that it is correct to say that all people who have invested in p2p in the last two years are sophisticated and those with more than 10% of net worth are barred from certifying as restricted as is currently the situation on rs? I have called the FCA today and made them aware of the questions being posed by Ratesetter and why they are not consistent with the fca rules. Not totally sure the very nice lady I spoke to understood what on Earth I was talking about but she listened intently and the correct team are now aware. Let’s see what happens.
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Post by propman on Nov 14, 2019 20:44:54 GMT
What this does do is to concentrate the minds of investors to question whether they are comfortable taking risks that are only appropriate to a minority. In addition, new investors are only allowed to exceed the limits by lying. Someone who lies in this context deserves what they get in my opinion. You cannot expect to eliminate bad investment, only guide people.
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ilmoro
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Post by ilmoro on Nov 14, 2019 20:48:40 GMT
Couple of observations Has the handbook been updated to reflect the addition of P2P to the activities covered by FCA financial promotion rules? If not this debate is acting on false premise. I very much doubt that RS, or any other platform have produced their version of the certification criteria without FCA or legal advice. Both good points, but does that mean that it is correct to say that all people who have invested in p2p in the last two years are sophisticated and those with more than 10% of net worth are barred from certifying as restricted as is currently the situation on rs? Are all Brewdog equity punk shareholders (issue 6) sophisticated as under the existing criteria they are?
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Greenwood2
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Post by Greenwood2 on Nov 14, 2019 20:48:44 GMT
I thought the point was to give 'Grandfather rights' to existing P2P lenders, so if you already have significant P2P lending you are not forced to sell, possibly at a loss to get down to a 10% limit, to do this the FCA have allowed most existing P2P lenders to self certify as sophisticated, seems reasonable to me. New lenders have to adhere to the 10% limit for a while and hopefully learn about P2P in the meantime.
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Post by failedtheturingtest on Nov 19, 2019 20:48:21 GMT
Why this was brought in for p2p but not for shares or gambling etc, not exactly sure These types of regulations do apply to other types of investments as well, but most of us wouldn't have come across them. Investments like 'contingent convertible securities' can't even be promoted/advertised to non-sophisticated investors. Similar restrictions are in place on film productions, 'qualified investor schemes', 'life settlement investments', and 'special purpose vehicles'. (See www.moneyobserver.com/our-analysis/are-you-sophisticated-investor for a good discussion on this from 2015!) I think P2P slipped through that net of restrictions, and the regulator is trying to close the hole, but in the meantime P2P has gotten established and it seems familiar enough to people that the restrictions feel strange.
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pip
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Post by pip on Nov 19, 2019 22:33:30 GMT
Why this was brought in for p2p but not for shares or gambling etc, not exactly sure These types of regulations do apply to other types of investments as well, but most of us wouldn't have come across them. Investments like 'contingent convertible securities' can't even be promoted/advertised to non-sophisticated investors. Similar restrictions are in place on film productions, 'qualified investor schemes', 'life settlement investments', and 'special purpose vehicles'. (See www.moneyobserver.com/our-analysis/are-you-sophisticated-investor for a good discussion on this from 2015!) I think P2P slipped through that net of restrictions, and the regulator is trying to close the hole, but in the meantime P2P has gotten established and it seems familiar enough to people that the restrictions feel strange. Of course, the FCA has defined what a sophisticated investor is for a long time. The issue is not this, the issue is that ratesetter has a very loose interpretation of a sophisticated investor to include anybody who has invested in p2p in the last two years and requires anybody who wants to certify as 'restricted' that they don't have more than 10% of their net assets in p2p. This is crazy as it means that the very person who the legislation was meant to protect will not be eligible to declare that they are restricted.
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