IFISAcava
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Post by IFISAcava on Jan 29, 2020 18:44:27 GMT
The other reason LW may be able to say rates will go up on each account later this years is not that our existing loans will pay any more - indeed I suspect they are stuffed having seen the default rate curves - but that our repayments (if reinvested - a big if at the moment) will be allocated to the new cohort loans that are currently paying 5.4% (at least we think so!). So the overall return on our account will go up that way without LW changing anything.
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macq
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Post by macq on Jan 29, 2020 18:44:55 GMT
There is a rumour that late last year the people writing the Brexit withdrawal document were offered the chance to rewrite the new LW T&C's but turned it down as they thought it to complicated!
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IFISAcava
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Post by IFISAcava on Jan 29, 2020 18:47:33 GMT
The whole strategy seems to have been to stuff existing investors so as to be able to continue to attract new investors with (possibly unrealistically) higher interest rates.
That is a majorly high risk strategy.
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Post by gravitykillz on Jan 29, 2020 19:08:47 GMT
6.5% is currently available on ratesetter via max.
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Post by carol167 on Jan 29, 2020 19:25:11 GMT
6.5% is currently available on ratesetter via max. The way I feel about p-2-p at the moment I wouldn't care if they were offering double that. My trust has hit an all time low point, thanks in part to LW but not exclusively...
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IFISAcava
Member of DD Central
Posts: 3,692
Likes: 3,018
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Post by IFISAcava on Jan 29, 2020 19:50:49 GMT
The way I feel about p-2-p at the moment I wouldn't care if they were offering double that. My trust has hit an all time low point, thanks in part to LW but not exclusively...
I however think you would care if they were offering double that. 13% on a provision funded lender would be amazing. And likely fraudulent. Which I believe is where you came in!
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Post by frankfurt13 on Jan 30, 2020 8:39:24 GMT
Is it worth raising the situation with 'This Is Money' or someone like that?
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Post by buzzablinio on Jan 30, 2020 9:02:49 GMT
Well done Lending Works on your recent changes, you've achieved the impossible and made the paltry rates on offer with traditional high street savings accounts look attractive.
Banks advertise the interest rate you actually get and your capital is protected up to 85k...Lending Works hide behind an amalgamation of past interest that is now unobtainable, put your capital at risk and charge a hefty premium if you want to sell out.
Disgraceful. As a minimum the FCA need to investigate the false headline interest rates being advertised. Hero to zero in one change.
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Post by p2pgirl on Jan 30, 2020 9:51:58 GMT
Hi jester and p2pgirl As an investment business, trust is as important to us as it is to you - it's not nice for us to read that our recent changes have impacted your trust in us, but I understand that the confusion has not exactly helped. We try to be as transparent as possible, and I think we generally do a pretty good job. We don't always get things right but we are open and honest with our customers and work hard every day to ensure you trust us with your investment. In our view, investment returns always need to be analysed over a sensible timeframe. To not consider returns already earned would be misleading - for example, if a loan makes repayments on time for 59 months and makes no repayment for the final month, the overall return yielded by that loan should be the primary metric, rather than the fact it yielded 0% in one month. As mentioned previously, during H1 2020 we are increasing Shield contributions by adjusting lender rates, and we expect this adjustment to reduce from H2 2020. The overall returns will always be shown in your dashboards and these should be the primary basis for any performance analysis. We tried to be as fair as possible by offering a fee-free period for investors who did not want to continue investing based on the new T&Cs, but this was never intended to be an opportunity to cash out and buy back to potentially benefit from varying rates. thanks for taking the time to reply. I know this forum is a hostile environment right now, but your presence and responses are appreciated. Are you able to provide more details on how you expect the adjustment to reduce in H2 2020? I started investing in November 2018 and to the 1st January 2020 I'd made a healthy XIRR of 5.9% (pulled down slightly by the initial cash drag). If I withdraw today, the return is reduced to 0.36% mainly due to the interest shortfall discount, and this becomes negative if I take into account the small sum I can't withdraw (presumably for loans in default). The dilemma I have is that I can cut my losses today and walk away from LW for almost break even, so my invested sum is protected, or I trust LW for the long term - my return should come up closer to the 5.4% over several years, but my invested sum is at risk. I guess I'm really after information to give me confidence that LW are still a good place to look after my money (risk vs reward). Perhaps a forum is not the right place for this discussion but I suspect many people are in the same position as me.
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Post by carol167 on Jan 30, 2020 9:55:24 GMT
Well done Lending Works on your recent changes, you've achieved the impossible and made the paltry rates on offer with traditional high street savings accounts look attractive. Banks advertise the interest rate you actually get and your capital is protected up to 85k...Lending Works hide behind an amalgamation of past interest that is now unobtainable, put your capital at risk and charge a hefty premium if you want to sell out. Disgraceful. As a minimum the FCA need to investigate the false headline interest rates being advertised. Hero to zero in one change. I'm still trying to get my head round some of this...
Are we saying that someone who signs up to LW now and invests an amount -will only get 2.3% in Feb despite it saying 5.4% ?
If so - surely that is a case of misselling ?
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benaj
Member of DD Central
N/A
Posts: 5,597
Likes: 1,736
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Post by benaj on Jan 30, 2020 10:07:32 GMT
Well done Lending Works on your recent changes, you've achieved the impossible and made the paltry rates on offer with traditional high street savings accounts look attractive. Banks advertise the interest rate you actually get and your capital is protected up to 85k...Lending Works hide behind an amalgamation of past interest that is now unobtainable, put your capital at risk and charge a hefty premium if you want to sell out. Disgraceful. As a minimum the FCA need to investigate the false headline interest rates being advertised. Hero to zero in one change. I'm still trying to get my head round some of this...
Are we saying that someone who signs up to LW now and invests an amount -will only get 2.3% in Feb despite it saying 5.4% ?
If so - surely that is a case of misselling ?
My guess, for the Growth product, new loans propably will perform very close to 5.4% in the first 6 months. New investors would probably pick up a bit of 2019 and 2018 loans, those would have perform below 5.4% and interest received in the first 6 months are subject to interest rate margin. 5.4% is the "target return" for the Growth product, not the Lender Rate per agreement.
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Post by carol167 on Jan 30, 2020 10:10:26 GMT
I'm still trying to get my head round some of this...
Are we saying that someone who signs up to LW now and invests an amount -will only get 2.3% in Feb despite it saying 5.4% ?
If so - surely that is a case of misselling ?
My guess, for the Growth product, new loans propably will perform very close to 5.4% in the first 6 months. New investors would probably pick up a bit of 2019 and 2018 loans, those would have perform below 5.4% and interest received in the first 6 months are subject to interest rate margin. 5.4% is the "target return" for the Growth product, not the Lender Rate per agreement.
In that case - it really should say the word "TARGET" on the dashboard then. It's so not clear...
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benaj
Member of DD Central
N/A
Posts: 5,597
Likes: 1,736
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Post by benaj on Jan 30, 2020 10:18:49 GMT
My guess, for the Growth product, new loans propably will perform very close to 5.4% in the first 6 months. New investors would probably pick up a bit of 2019 and 2018 loans, those would have perform below 5.4% and interest received in the first 6 months are subject to interest rate margin. 5.4% is the "target return" for the Growth product, not the Lender Rate per agreement.
In that case - it really should say the word "TARGET" on the dashboard then. It's so not clear...
I almost forgot, the new investor would also receive Interest shortfall for picking up older loans as well.
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Post by carol167 on Jan 30, 2020 10:23:23 GMT
In that case - it really should say the word "TARGET" on the dashboard then. It's so not clear...
I almost forgot, the new investor would also receive Interest shortfall for picking up older loans as well.
Yessss... we haven't even gotten on to the shortfall issue and how loyal customers (and I've been with them since near the beginning in 2015) are being stung if we wish to run for the hills now.
We're effectively locked in for the long haul. An excellent lesson on how to piss off your loyal customers.
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keystone
Member of DD Central
Posts: 718
Likes: 587
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Post by keystone on Jan 30, 2020 12:05:07 GMT
Hi jester and p2pgirl As an investment business, trust is as important to us as it is to you - it's not nice for us to read that our recent changes have impacted your trust in us, but I understand that the confusion has not exactly helped. We try to be as transparent as possible, and I think we generally do a pretty good job. We don't always get things right but we are open and honest with our customers and work hard every day to ensure you trust us with your investment. In our view, investment returns always need to be analysed over a sensible timeframe. To not consider returns already earned would be misleading - for example, if a loan makes repayments on time for 59 months and makes no repayment for the final month, the overall return yielded by that loan should be the primary metric, rather than the fact it yielded 0% in one month. As mentioned previously, during H1 2020 we are increasing Shield contributions by adjusting lender rates, and we expect this adjustment to reduce from H2 2020. The overall returns will always be shown in your dashboards and these should be the primary basis for any performance analysis. We tried to be as fair as possible by offering a fee-free period for investors who did not want to continue investing based on the new T&Cs, but this was never intended to be an opportunity to cash out and buy back to potentially benefit from varying rates. thanks for taking the time to reply. I know this forum is a hostile environment right now, but your presence and responses are appreciated. Are you able to provide more details on how you expect the adjustment to reduce in H2 2020? I started investing in November 2018 and to the 1st January 2020 I'd made a healthy XIRR of 5.9% (pulled down slightly by the initial cash drag). If I withdraw today, the return is reduced to 0.36% mainly due to the interest shortfall discount, and this becomes negative if I take into account the small sum I can't withdraw (presumably for loans in default). The dilemma I have is that I can cut my losses today and walk away from LW for almost break even, so my invested sum is protected, or I trust LW for the long term - my return should come up closer to the 5.4% over several years, but my invested sum is at risk. I guess I'm really after information to give me confidence that LW are still a good place to look after my money (risk vs reward). Perhaps a forum is not the right place for this discussion but I suspect many people are in the same position as me. I wouldn't trust Lending Works one iota, all trust has gone now, what's stopping them saying we are cutting the rate to match the banks of 0.25% and back date it to when you first invested. Oh sorry, no they wouldn't say that, they would just cut the rate to 0.25% and wait until existing investors figure out what has gone on. They are no different to the Lendy, Funding Secure, collateral, etc. Matthew What percentage of staff at lending works cashed in, during each of the last 6 months of 2019?
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