Post by fsbloke on Dec 8, 2019 16:03:28 GMT
My first post so please bear with me if these points have already been covered - but after 30 mins trolling through all the threads can't seem to find anything similar.
Thanks for starting this forum which I have accidentally stumbled upon. Why don't companies/administrators/regulators tell you this stuff? Think I might know the answer to that. Maybe these thoughts should be elsewhere so mods feel free to do so.
I guess I'd say I'm an average investor. Average in that I hold no financial nor legal qualifications but like the rest of the country is simply seeking inflation protection for my life savings. That's very hard to achieve these days without taking on greater risk and, let's face it, is why P2P & Alt Finance exists in the first place. To beat inflation you have to take on much more risk than most would like to, nor indeed had to, in the past. Nobody likes it but that's the world central bankers have created so we get on with it. Stay safe and watch your savings get eaten up or take some risk. So I joined FS as an investor.
The regulator, the FCA, needs challenging IMHO, particularly with regards to its middle initial...CONDUCT. Not because of the unregulated risk and non-compensation nor the associated outcomes of that but simply because of their and the company's CONDUCT. Please allow me to explain.
I did my due diligence before parting with my hard earned savings and noted the following extracts from the site :
(1) What if FundingSecure runs into financial difficulties?
If FundingSecure enters into financial difficulties, it will initiate a wind-down plan whereby no new loans or investors would be taken on and the loan book would be run-down. We have worked with the FCA to develop this plan, as well as the financial indicators that would cause us to initiate the plan. This is all designed to ensure a smooth and timely wind-down of the business if required.
In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions.
(2) Where is my money held?
When you transfer your savings to us, we hold your funds in a client account at Barclays Bank. The account is separated from the operational bank account of FundingSecure and is not used to finance our business. Un-invested money held in your account can be withdrawn instantly. Once a loan that you have invested in is activated, then the funds are removed from the client account and sent to the borrower. The borrower repays the loan with interest into the same account. Interest is not paid to you on uninvested funds held in your account.
With reference to the two above nothing could be clearer.... could it?
(3) Investor Update dated 29th August 2019 from Raj Kumar, Director
Like other investors I received this and to be honest was surprised by its content. There is an assumption that we are all somehow appraised of the current state of affairs with the company's position and it's loan book. It's as if everyone somehow knows what's going on. Nobody told me the company had changed hands, that the loan book was "dodgy", lengthy litigation with corrupt art dealers, that staff had been sacked /replaced etc. How should/could we know? This was the first time it was brought to my attention. As a reminder to fellow investors the following are extracts from that Investor Update.....
(a) "In light of this, we have set about the task of fixing issues and building an organisation that is seen as ‘fit for purpose’ with the right people and professional resources at the heart of every investment, now and in the future. This means we are prioritising the current loan book to recover investments for our existing investors and rebuilding confidence in the FundingSecure platform.
The first steps we have taken in order to achieve this include the recruitment of a specialist team:
• An in-house lawyer with recovery expertise to oversee every case
• An expert in loan book servicing and monitoring to ensure current performing loans do not become non-performing.
• A well-respected national property recovery provider who will be helping us with some of the more problematic parts of the loan book
• A specialist national insolvency practitioner to deal with individuals, companies and non-property loans.
"
(b) "Alongside our recovery strategy we are very much committed to growing the FundingSecure platform, offering an exceptional product with attractive projected returns* to appropriate investors despite being in a difficult market. As a result, we still seek to post a modest number of new loans (this includes tranches and renewal of existing loans) on the platform each month. These loans will be issued using our strengthened due diligence, underwriting policies, procedures and resources and will be looked after by our dedicated service, management and recovery team.
The team hopes that you will be reassured by our new perspective, and we have additionally answered some likely questions you may have below."
There is more but in the interests of brevity I won't bother. All very reassuring stuff and no doubt designed to smooth over any concerns those investors "in the know" had. I wasn't in the know so didn't realise I needed reassuring! With hindsight it was probably an attempt to stop withdrawals.
I, along with you, received that just 2 months before the company entered administration. Draw your own conclusions.
I hope you agree that the above, and probably a whole load more, illustrates why I feel this "CONDUCT" means investors have been badly deceived, conned, duped, misled.... call it what you like. Where was the Conduct regulator? What plan exactly is "We have worked with the FCA to develop this plan"? What happened to the Barclays Client Account? Conduct?..... More like mis-conduct.
The recent case with Lendy www.thisismoney.co.uk/money/investing/article-7750463/Lendy-investors-lose-loans-used-pay-creditors.html
It appears that the deception of "ring-fencing" is also being flouted by administrators in their attempts to reclassify investor's capital as suddenly and miraculously becoming a company asset and therefore available to pick over and plunder. This is going to be the clincher. And it's outrageous. If allowed to become precedent then Alternative Finance is dead. The FS administrators will no doubt attempt the same trick if allowed to.
The conduct of the regulator, the Financial Conduct Authority, surely has to be questioned in view of the complete absence of regulating this company's conduct!!
If that makes sense and IMHO.
Regards
An Average Investor
Thanks for starting this forum which I have accidentally stumbled upon. Why don't companies/administrators/regulators tell you this stuff? Think I might know the answer to that. Maybe these thoughts should be elsewhere so mods feel free to do so.
I guess I'd say I'm an average investor. Average in that I hold no financial nor legal qualifications but like the rest of the country is simply seeking inflation protection for my life savings. That's very hard to achieve these days without taking on greater risk and, let's face it, is why P2P & Alt Finance exists in the first place. To beat inflation you have to take on much more risk than most would like to, nor indeed had to, in the past. Nobody likes it but that's the world central bankers have created so we get on with it. Stay safe and watch your savings get eaten up or take some risk. So I joined FS as an investor.
The regulator, the FCA, needs challenging IMHO, particularly with regards to its middle initial...CONDUCT. Not because of the unregulated risk and non-compensation nor the associated outcomes of that but simply because of their and the company's CONDUCT. Please allow me to explain.
I did my due diligence before parting with my hard earned savings and noted the following extracts from the site :
(1) What if FundingSecure runs into financial difficulties?
If FundingSecure enters into financial difficulties, it will initiate a wind-down plan whereby no new loans or investors would be taken on and the loan book would be run-down. We have worked with the FCA to develop this plan, as well as the financial indicators that would cause us to initiate the plan. This is all designed to ensure a smooth and timely wind-down of the business if required.
In the unlikely event that FundingSecure enters administration as a result of extreme financial circumstances, capital and accrued interest on all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure. The administrators would have to rely on the administration fees coming at the end of the loan period to settle all debts, continuing to repay capital and interest to investors in accordance with the terms and conditions.
(2) Where is my money held?
When you transfer your savings to us, we hold your funds in a client account at Barclays Bank. The account is separated from the operational bank account of FundingSecure and is not used to finance our business. Un-invested money held in your account can be withdrawn instantly. Once a loan that you have invested in is activated, then the funds are removed from the client account and sent to the borrower. The borrower repays the loan with interest into the same account. Interest is not paid to you on uninvested funds held in your account.
With reference to the two above nothing could be clearer.... could it?
(3) Investor Update dated 29th August 2019 from Raj Kumar, Director
Like other investors I received this and to be honest was surprised by its content. There is an assumption that we are all somehow appraised of the current state of affairs with the company's position and it's loan book. It's as if everyone somehow knows what's going on. Nobody told me the company had changed hands, that the loan book was "dodgy", lengthy litigation with corrupt art dealers, that staff had been sacked /replaced etc. How should/could we know? This was the first time it was brought to my attention. As a reminder to fellow investors the following are extracts from that Investor Update.....
(a) "In light of this, we have set about the task of fixing issues and building an organisation that is seen as ‘fit for purpose’ with the right people and professional resources at the heart of every investment, now and in the future. This means we are prioritising the current loan book to recover investments for our existing investors and rebuilding confidence in the FundingSecure platform.
The first steps we have taken in order to achieve this include the recruitment of a specialist team:
• An in-house lawyer with recovery expertise to oversee every case
• An expert in loan book servicing and monitoring to ensure current performing loans do not become non-performing.
• A well-respected national property recovery provider who will be helping us with some of the more problematic parts of the loan book
• A specialist national insolvency practitioner to deal with individuals, companies and non-property loans.
"
(b) "Alongside our recovery strategy we are very much committed to growing the FundingSecure platform, offering an exceptional product with attractive projected returns* to appropriate investors despite being in a difficult market. As a result, we still seek to post a modest number of new loans (this includes tranches and renewal of existing loans) on the platform each month. These loans will be issued using our strengthened due diligence, underwriting policies, procedures and resources and will be looked after by our dedicated service, management and recovery team.
The team hopes that you will be reassured by our new perspective, and we have additionally answered some likely questions you may have below."
There is more but in the interests of brevity I won't bother. All very reassuring stuff and no doubt designed to smooth over any concerns those investors "in the know" had. I wasn't in the know so didn't realise I needed reassuring! With hindsight it was probably an attempt to stop withdrawals.
I, along with you, received that just 2 months before the company entered administration. Draw your own conclusions.
I hope you agree that the above, and probably a whole load more, illustrates why I feel this "CONDUCT" means investors have been badly deceived, conned, duped, misled.... call it what you like. Where was the Conduct regulator? What plan exactly is "We have worked with the FCA to develop this plan"? What happened to the Barclays Client Account? Conduct?..... More like mis-conduct.
The recent case with Lendy www.thisismoney.co.uk/money/investing/article-7750463/Lendy-investors-lose-loans-used-pay-creditors.html
It appears that the deception of "ring-fencing" is also being flouted by administrators in their attempts to reclassify investor's capital as suddenly and miraculously becoming a company asset and therefore available to pick over and plunder. This is going to be the clincher. And it's outrageous. If allowed to become precedent then Alternative Finance is dead. The FS administrators will no doubt attempt the same trick if allowed to.
The conduct of the regulator, the Financial Conduct Authority, surely has to be questioned in view of the complete absence of regulating this company's conduct!!
If that makes sense and IMHO.
Regards
An Average Investor
