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Post by WestonKevTMP on Dec 16, 2019 9:03:20 GMT
Comrades (although perhaps after this weekends political results I should use another greeting...) Each month I've been reported here our lender portfolio performance. I last reported this in October 2019 when I said, " the IRR as at 1st October 2019 is 13.6% (all loans from 1 July 2018 to 30 June 2019). The period is always chosen so that all loans have reached maturity and therefore defaults have peaked, in theory returns can only increase from here as a result of recoveries". The subsequent performance has been just as strong, notably because July 2019 continued to see bad debt well within tolerance. However we will no longer report performance on this forum because we now have an Outcome Statement on the website: themoneyplatform.com/outcomes-statement This is as a result of recent FCA changes (such as the classification of lender type, you sophisticates.....), and follows a very prescribed format. Therefore it wouldn't be appropriate to have a different and inconsistent metric here, even if it is our preferred reporting metric suitable for the short-term lending product. We must be consistent with the P2P sector as a whole. The outcome forecasts are lower than we've achieved historically. But when it comes to regulation, it's always better to "under promise...". REMEMBER YOUR CAPITAL IS AT RISK. THE MONEY PLATFORM NEITHER PROVIDES 'FSCS' PROTECTION NOR A POOLED PROVISION FUND MODEL. Kevin. |
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Post by WestonKevTMP on Jan 27, 2020 15:49:27 GMT
Additionally, we have in line with FCA requirements updated our internal wind-down plan and put the summary on the web page. This can be found in our Terms of Service HERE, but the text reads Wind-Down Plan
The Money Platform’s strategy is to continue to grow in the P2P lending sector. As with any business, there are circumstances, such as a material change in market conditions, which could impact that strategy such that we decide, or are obliged, to stop operating our P2P platform. In this event we are required by FCA regulations to have in place a plan to manage the run off of our loan book in an orderly fashion, and this plan is called the Wind Down Plan
Details of the wind-down plan are documented internally at The Money Platform, shared with the FCA on request and include a 12-month window for the collection of all open loans. The risk to the Lender is mitigated because all loans are for a maximum of 3 months, therefore a 12-month window has been chosen to give sufficient time for loans to complete naturally or include an extended time period for collections activity or re-arranged payment schedules to complete. Internal data indicates that we usually collect >100% of the amount lent within 12 months across our whole loan book. Due to the reduced risks during wind down and the limited financial resources required, it is fully expected that the process will be orderly. It is not expected that insolvency practitioners will be required although we may outsource collection of loans to a 3rd party (we do this currently for some overdue loans, as permitted under the loan contract) in order to reduce the time and cost of collecting the final payments.
During the period of a Wind Down
A skeleton team would remain to wind the business up
. There would be reduced platform functionality, for example we will not make new loans and not accept new funds from lenders
. Scheduled Borrower repayments and Lender receipts will continue to be processed automatically
.
The Wind Down team will manage the collection of late Borrower payments, possibly with the assistance of an outsourced collection agent, and would implement the repayment of funds due to Lenders
We may hire a 3rd party adviser to seek a buyer for the businessFor the avoidance of doubt, we do not have any foreseeable plans to invoke the wind-down plan. But we are of course aware of the disorderly state of some other platforms and what has happened to them in administration, and so we want to provide some assurance that the same fate would not befall lenders with The Money Platform. Out product type and efficiency of costs are the primary reasons an orderly wind-down would be expected. REMEMBER YOUR CAPITAL IS AT RISK. THE MONEY PLATFORM NEITHER PROVIDES 'FSCS' PROTECTION NOR A POOLED PROVISION FUND MODEL. Kevin, |
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jan 27, 2020 17:17:32 GMT
Additionally, we have in line with FCA requirements updated our internal wind-down plan and put the summary on the web page. This can be found in our Terms of Service HERE, but the text reads Wind-Down Plan
The Money Platform’s strategy is to continue to grow in the P2P lending sector. As with any business, there are circumstances, such as a material change in market conditions, which could impact that strategy such that we decide, or are obliged, to stop operating our P2P platform. In this event we are required by FCA regulations to have in place a plan to manage the run off of our loan book in an orderly fashion, and this plan is called the Wind Down Plan
Details of the wind-down plan are documented internally at The Money Platform, shared with the FCA on request and include a 12-month window for the collection of all open loans. The risk to the Lender is mitigated because all loans are for a maximum of 3 months, therefore a 12-month window has been chosen to give sufficient time for loans to complete naturally or include an extended time period for collections activity or re-arranged payment schedules to complete. Internal data indicates that we usually collect >100% of the amount lent within 12 months across our whole loan book. Due to the reduced risks during wind down and the limited financial resources required, it is fully expected that the process will be orderly. It is not expected that insolvency practitioners will be required although we may outsource collection of loans to a 3rd party (we do this currently for some overdue loans, as permitted under the loan contract) in order to reduce the time and cost of collecting the final payments.
During the period of a Wind Down
A skeleton team would remain to wind the business up
. There would be reduced platform functionality, for example we will not make new loans and not accept new funds from lenders
. Scheduled Borrower repayments and Lender receipts will continue to be processed automatically
.
The Wind Down team will manage the collection of late Borrower payments, possibly with the assistance of an outsourced collection agent, and would implement the repayment of funds due to Lenders
We may hire a 3rd party adviser to seek a buyer for the businessFor the avoidance of doubt, we do not have any foreseeable plans to invoke the wind-down plan. But we are of course aware of the disorderly state of some other platforms and what has happened to them in administration, and so we want to provide some assurance that the same fate would not befall lenders with The Money Platform. Out product type and efficiency of costs are the primary reasons an orderly wind-down would be expected. REMEMBER YOUR CAPITAL IS AT RISK. THE MONEY PLATFORM NEITHER PROVIDES 'FSCS' PROTECTION NOR A POOLED PROVISION FUND MODEL. Kevin, Thanks for the explanation. Essentially the same as FundingSecure. What it fails to explain is WHO PAYS for the wind down. The Funding Secure directors had plenty of money available for winding down the platform in an orderly manner, but opted for administration, so lenders have to pay the administrators for the wind down. From the FS T&C's Effect of FSL Own Insolvency"In line with the FCA’s requirements, FSL’s wind-down policy articulates the necessary provisions in place that aim to maintain client’s best interests. We are responsible for providing staff to monitor the borrowers repayments."
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Post by WestonKevTMP on Jan 28, 2020 9:00:19 GMT
The Money Platform pays for the wind down. There is capital set-aside to employ the skeleton employees required and maintain IT infrastructure. The precise £ amount set-aside is included in our wind-down plan that has been shared (as a regulatory requirement) with the FCA.
It's worth noting that these costs are actually quite small, you'd be surprised, in the scale of things. The platform is fully automated and as a strategic approach to building a financially sustainable platform the costs spent on employees is minimal. As a downside, it's this strict control of operating costs why perhaps the lender dashboard isn't as functional and pretty as it could be (and nor do we waste money going on stupid international trade visits, or bigging it up an conferences).
That's why in the event of wind-down (which we don't foresee), the costs of wind-down are within the capital set-aside. We do not expect any of the lenders capital or interest returned to be used for wind-down. We have planned an orderly and fully financed wind-down plan.
REMEMBER YOUR CAPITAL IS AT RISK. THE MONEY PLATFORM NEITHER PROVIDES 'FSCS' PROTECTION NOR A POOLED PROVISION FUND MODEL.
Kevin.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
Posts: 1,426
Likes: 1,211
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Post by sqh on Jan 28, 2020 15:46:22 GMT
The Money Platform pays for the wind down. There is capital set-aside to employ the skeleton employees required and maintain IT infrastructure. The precise £ amount set-aside is included in our wind-down plan that has been shared (as a regulatory requirement) with the FCA. It's worth noting that these costs are actually quite small, you'd be surprised, in the scale of things. The platform is fully automated and as a strategic approach to building a financially sustainable platform the costs spent on employees is minimal. As a downside, it's this strict control of operating costs why perhaps the lender dashboard isn't as functional and pretty as it could be (and nor do we waste money going on stupid international trade visits, or bigging it up an conferences). That's why in the event of wind-down (which we don't foresee), the costs of wind-down are within the capital set-aside. We do not expect any of the lenders capital or interest returned to be used for wind-down. We have planned an orderly and fully financed wind-down plan. REMEMBER YOUR CAPITAL IS AT RISK. THE MONEY PLATFORM NEITHER PROVIDES 'FSCS' PROTECTION NOR A POOLED PROVISION FUND MODEL. Kevin. Also note "The Frequently Asked Questions section" on FS states the following: "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." WestonKevTMP Your statement "We do not expect any of the lenders capital or interest returned to be used for wind-down." is not quite as reassuring as the FS empathic "... all loans would be “ring-fenced” and, therefore, cannot be used by the administrators to settle any debts due by FundingSecure." To be clear the administrators aren't actually taking ring fenced money, but they would refuse to act as administrators unless lenders agree to pay them a percentage of each loan. It is effectively the same as taking ring-fenced money.
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Post by WestonKevTMP on Jan 31, 2020 7:26:12 GMT
All due respect, I'd rather not be tagged in relation to Funding Secure. Or use their words as a model. Look at how that worked out. Don't be suckered in by promises that guarantee safety, there's a platform or two out there now that will be gone within the year despite all the guff PR promises.
Look at actual performance, actions and the track record of the team. Are the team credit or financial services experienced. Or are they chancers out to make a buck. I've been in consumer finance for 25 years, with a bit of cynicism it's easy to spot the chancers. If the team are new to lending, what makes anyone think they have the right to learn with your money.
I've warned enough times on this forum about some of the chancers that have entered the P2P sector, not least about Lendy (that was obvious years before it went into administration). Yet people still keep saying they won't invest unless they are getting double digit returns.
Kevin.
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michaelc
Member of DD Central
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Post by michaelc on Jan 31, 2020 14:38:22 GMT
All due respect, I'd rather not be tagged in relation to Funding Secure. Or use their words as a model. Look at how that worked out. Don't be suckered in by promises that guarantee safety, there's a platform or two out there now that will be gone within the year despite all the guff PR promises. Look at actual performance, actions and the track record of the team. Are the team credit or financial services experienced. Or are they chancers out to make a buck. I've been in consumer finance for 25 years, with a bit of cynicism it's easy to spot the chancers. If the team are new to lending, what makes anyone think they have the right to learn with your money. I've warned enough times on this forum about some of the chancers that have entered the P2P sector, not least about Lendy (that was obvious years before it went into administration). Yet people still keep saying they won't invest unless they are getting double digit returns.
Kevin. Hello Kevin given I said something that could have been construed to mean that I have to respond although I'm not 100% sure your comments were directed at me. The higher the risk, the higher ought to be the mean reward. That doesn't mean I'd "insist" on double digit returns but as with stocks and other securities a given year can easily bring that kind of gain (or loss). Since the gross margins here are so high and the risk is probably at least as high as most stocks, I added that there ought not to be any artificial (platform) imposed earnings cap and, from memory, that is probably the case with TMP so I'm pleased about that. Your comments about other platforms about to go under this year are also interesting. I'd be keen to know more detail but understand you may not wish to do that. I suspect you might mean your competitor that has its own board here and you may well be right. I can't believe I had well into five figures on that platform at one stage (I'm now out of it entirely).
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Greenwood2
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Post by Greenwood2 on Feb 1, 2020 12:45:32 GMT
All due respect, I'd rather not be tagged in relation to Funding Secure. Or use their words as a model. Look at how that worked out. Don't be suckered in by promises that guarantee safety, there's a platform or two out there now that will be gone within the year despite all the guff PR promises. Look at actual performance, actions and the track record of the team. Are the team credit or financial services experienced. Or are they chancers out to make a buck. I've been in consumer finance for 25 years, with a bit of cynicism it's easy to spot the chancers. If the team are new to lending, what makes anyone think they have the right to learn with your money. I've warned enough times on this forum about some of the chancers that have entered the P2P sector, not least about Lendy (that was obvious years before it went into administration). Yet people still keep saying they won't invest unless they are getting double digit returns.
Kevin. Hello Kevin given I said something that could have been construed to mean that I have to respond although I'm not 100% sure your comments were directed at me. The higher the risk, the higher ought to be the mean reward. That doesn't mean I'd "insist" on double digit returns but as with stocks and other securities a given year can easily bring that kind of gain (or loss). Since the gross margins here are so high and the risk is probably at least as high as most stocks, I added that there ought not to be any artificial (platform) imposed earnings cap and, from memory, that is probably the case with TMP so I'm pleased about that. Your comments about other platforms about to go under this year are also interesting. I'd be keen to know more detail but understand you may not wish to do that. I suspect you might mean your competitor that has its own board here and you may well be right. I can't believe I had well into five figures on that platform at one stage (I'm now out of it entirely). Burn't my fingers on TMP (only slightly in the scheme of things  ) so I was not tempted to try the other one! Just reading this forum there seem to be at least three platforms possibly on the brink, and a couple more that I would worry about, and that's just out of the ones I follow a bit. It will be interesting (possibly not in a good way) to see who's left standing this time next year.
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) so I was not tempted to try the other one! Just reading this forum there seem to be at least three platforms possibly on the brink, and a couple more that I would worry about, and that's just out of the ones I follow a bit. It will be interesting (possibly not in a good way) to see who's left standing this time next year.