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Post by Matthew on Feb 8, 2020 21:43:51 GMT
Evening all
I just wanted to say a few things before trying to address the various queries which have come up on this and other similar threads.
I participate on this forum on an ad-hoc basis, primarily to try to help investors by clarifying certain areas of interest. I don't believe I've been any less active recently than in previous months, however the activity on this board has obviously been greater than usual. I contribute in my spare time and rightly declare my affiliation with Lending Works, as a co-founder, however this forum is not an official communication channel and the level of my activity should not be taken as a proxy for the extent to which the business values any given topic/thread/post.
You will note from the many other threads on this board that I am more than happy to address any topic, however challenging, whether it be credit risk, portfolio performance or customer service issues. I will always answer queries as comprehensively and honestly as possible.
To address directly the queries within this thread...
Calculation of interest shortfall charges
As most of you know, interest shortfall charges arise when the current rates payable on loan chunks being sold are lower than the current rate advertised to new investors (currently 4.0% or 5.4% depending on product).
As a worked example:
- Loan chunk being sold which is currently yielding 4% p.a. (say 6.5% p.a. minus 2.5% Shield adjustment)
- Current target rate on Growth product of 5.4%, giving rise to a delta of 1.4% (5.4% minus 4%)
- Interest shortfall is calculated based on the chunk amount at 1.4% for the remaining term
The interest shortfall is paid to the new investor upfront and ensures they receive their 5.4% (the actual repayments on the loan will be at 4%).
Each cohort of loans is assessed independently in respect of credit performance, Shield contributions and expected losses. On 1 January 2020, we made adjustments to each cohort of loans in order to ensure the Shield remains adequately funded at all times, in the interest of all investors. These adjustments are most prominent in January but will be tapered back over the coming months in line with the required profile of claims to be covered by the Shield. We will provide a further detailed update on this next week, which should help. These adjustments have all been modelled over the lifetime of the loans to provide the expected returns within your Dashboard, which we believe should be the primary KPI. We acknowledge this process could have been explained better in the November update and apologise for that.
Pooling event versus variable interest rates
In our opinion, the variable interest rate mechanism provides significantly more stability and flexibility than a pooling event, which would be a binary outcome leading to a lockup of funds on the relevant cohorts and a 5-year repayment distribution timeline. The current model allows poor performing cohorts to be addressed, while maintaining the benefits of the Shield and avoiding cross-contamination between cohorts i.e. using fees/NIM on new loans to support older cohorts.
Going forward, rate adjustments (if any) will be more forward-looking and very gradual, as opposed to the current adjustments which were applied to prior cohorts some way into their contractual term.
Current advertised target rates
The current advertised target rates of 4.0% and 5.4% represent the annualised target rate of return on the two products for investments made today. Loans funded during 2020 are receiving these rates and this will continue while performance remains in line with expectations. We believe it is clear that these rates are target rates and are not guaranteed, due to information set out on our marketing website, our terms and conditions, our lender key information document and the appropriateness test all new investors must take before investing. I cannot agree that these target rates are misleading - if there are areas where you feel we could be clearer, please do let us know and we can try to address.
Our November communication
Some have suggested that we should have advised investors to sell their portfolios in December and buy back in January. As previously commented, we offered the fee-free exit period to allow investors who did not want to invest under our new terms and conditions a straightforward exit. It was not intended as an opportunity to benefit from interest rate arbitrage.
In addition, we are unable to provide investment advice and therefore would always avoid advising investors to sell or or hold their portfolios. I think it's fairly understandable why we would not send an email to all of our investors suggesting they should all try to sell their entire portfolio and then buy it back in a month's time. This would have caused significant concern, delays and unnecessary disruption to the platform which could never be in the best interest of investors.
While we take on board that the transition to the new terms and conditions has been challenging, we remain fully committed to the new model and believe over time we will be able to restore the trust which some of you say you've lost through this process, by continuing to deliver healthy and consistent returns to investors.
Apologise to lenders on behalf of LW (a glaring omission thus far)
We will always hold our hands up and apologise where mistakes are made, and you will see that in various other threads. We apologise that our November announcement was not sufficiently clear about the impact of the changes we made. We tried to distill quite a complex topic into a straightforward announcement and believed that a 30-day fee-free withdrawal period was sufficient to allow investors time to consider the changes, ask questions if needed, and take action or otherwise.
Explain clearly and in simple terms what has gone wrong with your lending model and how you are fixing it
We do not believe that anything has gone wrong with our lending model. Some of the prior cohorts of loans performed less well than expected, hence we made the decision to reduce returns to ensure the Shield continues to operate effectively, for the benefit of all investors. We have invested a significant amount of resource into our credit function, including bringing in a new head of risk and making significant improvements to our credit models as a result of now having significantly more data, which is only possible after a number of years of trading (models prior to this point tend to be built on anonymous data obtained from a credit bureau which may not be reflective of your through-the-door population).
Explain clearly the impact on lenders and what their options are to allow them to make informed decisions going forward
As described above, due to the adjustments to prior cohorts, interest income is currently lower than in previous months. We will continue to adjust interest rates to align with the profile of payments and we expect to reduce the adjustments along with an announcement next week. These adjustments are timing differences, provided you hold loans to maturity, and do not affect the overall returns displayed on your Dashboard.
Some have commented that interest has been retrospectively clawed back or that returns should not be considered over the life of a loan, however I have to disagree with that perspective. In a non-contingency fund model, a 36-month loan may meet its scheduled repayments for 30 months and then go into default, meaning 6 months without payment. The return from that loan would be calculated as an IRR over the life of the loan, and any calculation over a shorter timeframe would be misleading.
Continue to engage and respond to questions even if that feels awkward, uncomfortable or tiresome to you
I am still here and will continue to engage where I feel I can add value. I have no concern with addressing awkward, uncomfortable or even tiresome questions, just please bear in mind my comments above that you are always best using our official communication channels if you need a prompt answer to any query.
Apologies for the long post but hope this helps.
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squid
Member of DD Central
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Post by squid on Feb 8, 2020 21:55:17 GMT
Thank you Matthew . I believe your update here will be most useful in support of my complaint, particularly the admission: ''We apologise that our November announcement was not sufficiently clear about the impact of the changes we made." FCA Principle 7: A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. |
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Post by jojo on Feb 8, 2020 22:10:02 GMT
Where did it say in their November email that I'd only be getting 0.69% interest going forward - or that if you cashed out you would loose a whopping 6% which amounts to more than half my entire interest in three years on my ISA ?? Who in their right mind, would not have cashed out if that had been made clear ??
There's no way I would invest such a large sum of money in risky p-2-p investments for 0.69% return on the off chance that possibly, maybe, if the wind is in the right direction - I might get some of what they were skimming of us back later. I was left with no choice but to cash out at rip off amounts so I could sleep at night.
But it's ok... anyone new will get 5.4% straight off. How to totally screw all your loyal customers!
To say I'm angry is putting it mildly.
Carol, I start to wonder if you are working for a competitor to LW or a banking institution and your only goal on this forum is to make sure LW is going down. You complain every 2 hours with the same non constructive talks, i have read from your own words that you withdraw money but at the same time you keep been worry for the future, he doesn't make sense to me, are you still fully invested in LW ? I think we all understood what happen in December, ie : LW had to change the conditions because the Shield was depreciating, they wanted to avoid a run out which could have left all investors in trouble. Like i previously share, i prefer less interest rate but more capital protection, now to be more constructive and talk about fact, what should i do ? go to my bank and have 0.1 % interest rate on savings ? I prefer to draw on a monthly basis for free interest and capital repayment (which btw you can't do in usual bank, most of financials institution do not give you capital repayment before your product has mature), and if you want the money early, you will have to pay penalties. And i Know the 2% is not the 5% expected, but like said on previous post, I have earned 6 % the last 3 years, so on average, won't bother to have only 2% in 2020. What do you have to offer that is more than 2 % this days anyway?
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macq
Member of DD Central
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Post by macq on Feb 8, 2020 23:28:31 GMT
Evening all I just wanted to say a few things before trying to address the various queries which have come up on this and other similar threads. I participate on this forum on an ad-hoc basis, primarily to try to help investors by clarifying certain areas of interest. I don't believe I've been any less active recently than in previous months, however the activity on this board has obviously been greater than usual. I contribute in my spare time and rightly declare my affiliation with Lending Works, as a co-founder, however this forum is not an official communication channel and the level of my activity should not be taken as a proxy for the extent to which the business values any given topic/thread/post. You will note from the many other threads on this board that I am more than happy to address any topic, however challenging, whether it be credit risk, portfolio performance or customer service issues. I will always answer queries as comprehensively and honestly as possible. To address directly the queries within this thread... Calculation of interest shortfall chargesAs most of you know, interest shortfall charges arise when the current rates payable on loan chunks being sold are lower than the current rate advertised to new investors (currently 4.0% or 5.4% depending on product). As a worked example: - Loan chunk being sold which is currently yielding 4% p.a. (say 6.5% p.a. minus 2.5% Shield adjustment) - Current target rate on Growth product of 5.4%, giving rise to a delta of 1.4% (5.4% minus 4%) - Interest shortfall is calculated based on the chunk amount at 1.4% for the remaining term The interest shortfall is paid to the new investor upfront and ensures they receive their 5.4% (the actual repayments on the loan will be at 4%). Each cohort of loans is assessed independently in respect of credit performance, Shield contributions and expected losses. On 1 January 2020, we made adjustments to each cohort of loans in order to ensure the Shield remains adequately funded at all times, in the interest of all investors. These adjustments are most prominent in January but will be tapered back over the coming months in line with the required profile of claims to be covered by the Shield. We will provide a further detailed update on this next week, which should help. These adjustments have all been modelled over the lifetime of the loans to provide the expected returns within your Dashboard, which we believe should be the primary KPI. We acknowledge this process could have been explained better in the November update and apologise for that. Pooling event versus variable interest rates
In our opinion, the variable interest rate mechanism provides significantly more stability and flexibility than a pooling event, which would be a binary outcome leading to a lockup of funds on the relevant cohorts and a 5-year repayment distribution timeline. The current model allows poor performing cohorts to be addressed, while maintaining the benefits of the Shield and avoiding cross-contamination between cohorts i.e. using fees/NIM on new loans to support older cohorts. Going forward, rate adjustments (if any) will be more forward-looking and very gradual, as opposed to the current adjustments which were applied to prior cohorts some way into their contractual term. Current advertised target ratesThe current advertised target rates of 4.0% and 5.4% represent the annualised target rate of return on the two products for investments made today. Loans funded during 2020 are receiving these rates and this will continue while performance remains in line with expectations. We believe it is clear that these rates are target rates and are not guaranteed, due to information set out on our marketing website, our terms and conditions, our lender key information document and the appropriateness test all new investors must take before investing. I cannot agree that these target rates are misleading - if there are areas where you feel we could be clearer, please do let us know and we can try to address. Our November communicationSome have suggested that we should have advised investors to sell their portfolios in December and buy back in January. As previously commented, we offered the fee-free exit period to allow investors who did not want to invest under our new terms and conditions a straightforward exit. It was not intended as an opportunity to benefit from interest rate arbitrage. In addition, we are unable to provide investment advice and therefore would always avoid advising investors to sell or or hold their portfolios. I think it's fairly understandable why we would not send an email to all of our investors suggesting they should all try to sell their entire portfolio and then buy it back in a month's time. This would have caused significant concern, delays and unnecessary disruption to the platform which could never be in the best interest of investors. While we take on board that the transition to the new terms and conditions has been challenging, we remain fully committed to the new model and believe over time we will be able to restore the trust which some of you say you've lost through this process, by continuing to deliver healthy and consistent returns to investors. Apologise to lenders on behalf of LW (a glaring omission thus far)We will always hold our hands up and apologise where mistakes are made, and you will see that in various other threads. We apologise that our November announcement was not sufficiently clear about the impact of the changes we made. We tried to distill quite a complex topic into a straightforward announcement and believed that a 30-day fee-free withdrawal period was sufficient to allow investors time to consider the changes, ask questions if needed, and take action or otherwise. Explain clearly and in simple terms what has gone wrong with your lending model and how you are fixing itWe do not believe that anything has gone wrong with our lending model. Some of the prior cohorts of loans performed less well than expected, hence we made the decision to reduce returns to ensure the Shield continues to operate effectively, for the benefit of all investors. We have invested a significant amount of resource into our credit function, including bringing in a new head of risk and making significant improvements to our credit models as a result of now having significantly more data, which is only possible after a number of years of trading (models prior to this point tend to be built on anonymous data obtained from a credit bureau which may not be reflective of your through-the-door population). Explain clearly the impact on lenders and what their options are to allow them to make informed decisions going forwardAs described above, due to the adjustments to prior cohorts, interest income is currently lower than in previous months. We will continue to adjust interest rates to align with the profile of payments and we expect to reduce the adjustments along with an announcement next week. These adjustments are timing differences, provided you hold loans to maturity, and do not affect the overall returns displayed on your Dashboard. Some have commented that interest has been retrospectively clawed back or that returns should not be considered over the life of a loan, however I have to disagree with that perspective. In a non-contingency fund model, a 36-month loan may meet its scheduled repayments for 30 months and then go into default, meaning 6 months without payment. The return from that loan would be calculated as an IRR over the life of the loan, and any calculation over a shorter timeframe would be misleading. Continue to engage and respond to questions even if that feels awkward, uncomfortable or tiresome to youI am still here and will continue to engage where I feel I can add value. I have no concern with addressing awkward, uncomfortable or even tiresome questions, just please bear in mind my comments above that you are always best using our official communication channels if you need a prompt answer to any query. Apologies for the long post but hope this helps. Thanks for getting back as any feedback should be welcomed Would just like to make the following point your home/landing page mentions a simple p2p platform - if we assume and hopefully you agree that even with the appropriate test your market is aimed at the easier/set and forget/Blackbox/hands off end of the market? If you then look at the first four bullet points of your worked example in your post could you honestly say that looks like a simple equation for the average investor? and might that also be the reason many did not cash out in December as they had not even understood without seeing worked examples? It would seem unlikely that your CS reps only had a quick note to explain the maths in the same way we did but most likely had a very long meeting to help them understand.So it would not have been seen as investment advice but explaining in the same way to us what was going to happen
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jester
Member of DD Central
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Post by jester on Feb 8, 2020 23:47:17 GMT
I've had my criticisms recently for Lending Works, primarily their continued offering of 6.5% when forum members here were reporting the shield was facing depletion and this wasn't sustainable. An earlier reaction would have avoided much of this contention! I also think the information provided on how the shield would be replenished was at best badly written and at worst misleading. However I hugely respect Matthew for continuing to have a presence in the face of much anger and clearly attempting to answer the questions being raised. Some of the accusations of him going into hiding are absurd. I've decided to remain in part due to his participation but also because I want to be part of a platform tackling it's performance issues head on as opposed to sticking it's head in the sand, even if it's vastly unpopular and because I never expected P2P to be a smooth ride and if I achieve close to 5.4% over the course of the loans I'll be thrilled. Each to their own and best of luck with your next investment to all who are withdrawing! |
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IFISAcava
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Post by IFISAcava on Feb 9, 2020 11:02:29 GMT
Where did it say in their November email that I'd only be getting 0.69% interest going forward - or that if you cashed out you would loose a whopping 6% which amounts to more than half my entire interest in three years on my ISA ?? Who in their right mind, would not have cashed out if that had been made clear ??
There's no way I would invest such a large sum of money in risky p-2-p investments for 0.69% return on the off chance that possibly, maybe, if the wind is in the right direction - I might get some of what they were skimming of us back later. I was left with no choice but to cash out at rip off amounts so I could sleep at night.
But it's ok... anyone new will get 5.4% straight off. How to totally screw all your loyal customers!
To say I'm angry is putting it mildly.
But are they getting 5.4% from day One or are they already in an H1 event and pre-funding the provision fund? and if not how long before they are? Yes, they will be getting 5.4% straight off. That was hidden as different rates for different "loan cohorts" (aka new v old investors). It's just using the old "introductory rate" ploy that they use on savings accounts though - and to take the analogy further, they lured us in with good (unsustainable) introductory rates than slashed them and added a punitive loss of interest clause for good measure. Fool me once - shame on you, Fool me twice - shame on me.
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macq
Member of DD Central
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Post by macq on Feb 9, 2020 11:22:04 GMT
having wavered for a couple of weeks and reading Matthews reply including "we tried to distil quite a complex topic into a straightforward announcement" and as mentioned the "simple" used on the home page it does give me pause when you read on how the shield works section under simplicity -
it says "there's no need to learn about things like default curves,recoveries..........." and about Five other things are mentioned.At the moment this would not appear to be true in that you do need to learn about much more then picking a rate and forgetting about it,but LW still seem to want to push the ease of use etc
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Post by befuddled on Feb 9, 2020 12:19:31 GMT
Putting it simply would it be correct to say in the past at LW (and most P2P platforms), borrowers fund the Shield/PF.
Since Jan 2020 at LW (some/existing) investors are funding the Shield....
This would seem to be a fundamental shift in the whole model, and not something I've seen documented
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Ukmikk
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Post by Ukmikk on Feb 9, 2020 13:37:13 GMT
Evening all This, I'm afraid, comes across as flippant in the current climate.I just wanted to say a few things before trying to address the various queries which have come up on this and other similar threads. I participate on this forum on an ad-hoc basis, primarily to try to help investors by clarifying certain areas of interest. I don't believe I've been any less active recently than in previous months, however the activity on this board has obviously been greater than usual. I contribute in my spare time and rightly declare my affiliation with Lending Works, as a co-founder, however this forum is not an official communication channel and the level of my activity should not be taken as a proxy for the extent to which the business values any given topic/thread/post. You will note from the many other threads on this board that I am more than happy to address any topic, however challenging, whether it be credit risk, portfolio performance or customer service issues. I will always answer queries as comprehensively and honestly as possible. To address directly the queries within this thread... Calculation of interest shortfall chargesAs most of you know, interest shortfall charges arise when the current rates payable on loan chunks being sold are lower than the current rate advertised to new investors (currently 4.0% or 5.4% depending on product). As a worked example: - Loan chunk being sold which is currently yielding 4% p.a. (say 6.5% p.a. minus 2.5% Shield adjustment) - Current target rate on Growth product of 5.4%, giving rise to a delta of 1.4% (5.4% minus 4%) - Interest shortfall is calculated based on the chunk amount at 1.4% for the remaining term Many investors are reporting much higher interest shortfall charges then 1.4%. How is this? What are the charges applicable to each cohort? The interest shortfall is paid to the new investor upfront and ensures they receive their 5.4% (the actual repayments on the loan will be at 4%). Each cohort of loans is assessed independently in respect of credit performance, Shield contributions and expected losses. On 1 January 2020, we made adjustments to each cohort of loans in order to ensure the Shield remains adequately funded at all times, in the interest of all investors. These adjustments are most prominent in January but will be tapered back over the coming months in line with the required profile of claims to be covered by the Shield. We will provide a further detailed update on this next week, which should help. These adjustments have all been modelled over the lifetime of the loans to provide the expected returns within your Dashboard, which we believe should be the primary KPI. We acknowledge this process could have been explained better in the November update and apologise for that. Pooling event versus variable interest rates
In our opinion, the variable interest rate mechanism provides significantly more stability and flexibility than a pooling event, which would be a binary outcome leading to a lockup of funds on the relevant cohorts and a 5-year repayment distribution timeline. The current model allows poor performing cohorts to be addressed, while maintaining the benefits of the Shield and avoiding cross-contamination between cohorts i.e. using fees/NIM on new loans to support older cohorts. Going forward, rate adjustments (if any) will be more forward-looking and very gradual, as opposed to the current adjustments which were applied to prior cohorts some way into their contractual term. Current advertised target ratesThe current advertised target rates of 4.0% and 5.4% represent the annualised target rate of return on the two products for investments made today. Loans funded during 2020 are receiving these rates and this will continue while performance remains in line with expectations. We believe it is clear that these rates are target rates and are not guaranteed, due to information set out on our marketing website, our terms and conditions, our lender key information document and the appropriateness test all new investors must take before investing. I cannot agree that these target rates are misleading - if there are areas where you feel we could be clearer, please do let us know and we can try to address. Our November communicationSome have suggested that we should have advised investors to sell their portfolios in December and buy back in January. No, this is not the the case. What people have suggested is that the implications of selling out before or after the cut-off date should have been clearly explained, but weren't. Many feel that this obfuscation was deliberate, for obvious reasons. As previously commented, we offered the fee-free exit period to allow investors who did not want to invest under our new terms and conditions a straightforward exit. It was not intended as an opportunity to benefit from interest rate arbitrage. In addition, we are unable to provide investment advice and therefore would always avoid advising investors to sell or or hold their portfolios. I think it's fairly understandable why we would not send an email to all of our investors suggesting they should all try to sell their entire portfolio and then buy it back in a month's time. Sorry Matthew, no one has suggested this. This would have caused significant concern, delays and unnecessary disruption to the platform which could never be in the best interest of investors. While we take on board that the transition to the new terms and conditions has been challenging, we remain fully committed to the new model and believe over time we will be able to restore the trust which some of you say you've lost through this process, by continuing to deliver healthy and consistent returns to investors. Apologise to lenders on behalf of LW (a glaring omission thus far)We will always hold our hands up and apologise where mistakes are made, and you will see that in various other threads. We apologise that our November announcement was not sufficiently clear about the impact of the changes we made. I think that the FCA would agree with this statement. You now need to consider what you can do to rectify this for your Lender community who feel they were not sufficiently informed. We tried to distill quite a complex topic into a straightforward announcement and believed that a 30-day fee-free withdrawal period was sufficient to allow investors time to consider the changes, ask questions if needed, and take action or otherwise. While the apology regarding the poor communication is welcome, this still falls short of an apology for the poor credit risk management performance of LW in relation to the advertised 'target' (yes, we know) returns resulting in significant underperformance of investments made via the platform Explain clearly and in simple terms what has gone wrong with your lending model and how you are fixing itWe do not believe that anything has gone wrong with our lending model. I'm frankly staggered by this statement. You really can't be serious? Is this arrogance? Delusion? Denial? If you truly believe this is true then I really don't know what to say. Some of the prior cohorts of loans performed less well than expected, What an an understatement! hence we made the decision to reduce returns to ensure the Shield continues to operate effectively, for the benefit of all investors. We have invested a significant amount of resource into our credit function, including bringing in a new head of risk and making significant improvements to our credit models as a result of now having significantly more data So this is basically a recognition that something had gone wrong and needed to be rectified with more investment and experience brought in, which contradicts the denial above. You have also made huge changes to the way the platform works and who and how the PF is funded, which does not support the view that the previous model was working well. Just put your hands up Matthew. , which is only possible after a number of years of trading (models prior to this point tend to be built on anonymous data obtained from a credit bureau which may not be reflective of your through-the-door population). Not strictly true, there is plenty of industry credit risk data available for all different demographics and channels, maybe you just didn't want to pay for it?Explain clearly the impact on lenders and what their options are to allow them to make informed decisions going forwardAs described above, due to the adjustments to prior cohorts, interest income is currently lower than in previous months. We will continue to adjust interest rates to align with the profile of payments and we expect to reduce the adjustments along with an announcement next week. These adjustments are timing differences, provided you hold loans to maturity, and do not affect the overall returns displayed on your Dashboard. Some have commented that interest has been retrospectively clawed back or that returns should not be considered over the life of a loan, however I have to disagree with that perspective. In a non-contingency fund model, a 36-month loan may meet its scheduled repayments for 30 months and then go into default, meaning 6 months without payment. The return from that loan would be calculated as an IRR over the life of the loan, and any calculation over a shorter timeframe would be misleading. Continue to engage and respond to questions even if that feels awkward, uncomfortable or tiresome to youI am still here and will continue to engage where I feel I can add value. I have no concern with addressing awkward, uncomfortable or even tiresome questions, just please bear in mind my comments above that you are always best using our official communication channels if you need a prompt answer to any query. In my view I don't think its beneficial to anyone to just dip in and out when it suits you. Platforms engage on the forum because they know they can benefit from that engagement, however it can also work the other way if that engagement is not maintained through critical periods. We have seen this elsewhere. Apart from the fact that CS channels are usually limited in what they can offer outside of simple queries (they tend to be people with limited knowledge dispensing corporate spin, aka BS) it is also more efficient to address a number of lenders in one go via the forum go rather than via individual queries. Apologies for the long post but hope this helps. Not sure why you would apologise for a long post, it's clearly needed? , Thank you for returning and posting your response and re-engaging with your lenders at what many feel is a difficult time. It's great that you have started to provide some more detail about the changes and calculations we are now subject to, which we all appreciate. However, I feel that there are still some concerns with your comments which i have attempted to address above. I hope you will take them on board as I am not here to cause conflict, but feel that you and LW have not handled recent events well, a view shared by many fellow investors. For the record, I am a fairly long standing investor with well above the platform average invested. I am not 'angry' (there is no place for emotion in investing and if I got angry at every example of deceit, dishonesty or incompetence I witnessed I would have imploded by now). I have not yet withdrawn a penny and am still trying to determine the most suitable course of action based on the past record of, and my future confidence in, LW, which is of course being severely stress-tested at present. Many thanks.
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Ukmikk
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Post by Ukmikk on Feb 9, 2020 13:40:19 GMT
Putting it simply would it be correct to say in the past at LW (and most P2P platforms), borrowers fund the Shield/PF. Since Jan 2020 at LW (some/existing) investors are funding the Shield.... This would seem to be a fundamental shift in the whole model, and not something I've seen documented Another very good point. Again, not clearly communicated by LW. I suspect the FCA would have a field day with all of this.
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macq
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Post by macq on Feb 9, 2020 13:57:08 GMT
it does make me wonder and hope if LW do take some of this on board and finally act,that they don't make another mistake and double down on the pain for the people who left in the last 6 weeks or so by changing fee's etc based on the feedback from people leaving but only going forward for the investors who stayed
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squid
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Post by squid on Feb 9, 2020 14:50:55 GMT
For the record, I have held a LW IFISA for less than 2 years. The current fee to sell out is over 6.0%. Like some others on here, I have decided to sell now - consequently I have no other option but to pay the fee which I firmly consider to be excessive, disproportionate and unfair. Due to their recently acknowledged unclear update of November 2019 which did not disclose the implications of the new terms and conditions, I now fully expect LW to act fairly here. Otherwise it will most definitely be a matter for the Financial Ombudsman Service to deal with.
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squid
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Post by squid on Feb 9, 2020 15:41:49 GMT
Yesterday's acknowledgement changes things. There is now documented evidence from LW that the November update was unclear, which is therefore unfair. This is a type of complaint which the FOS is able to consider.
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Post by Matthew on Feb 9, 2020 16:14:33 GMT
Yesterday's acknowledgement changes things. There is now documented evidence from LW that the November update was unclear, which is therefore unfair. This is a type of complaint which the FOS is able to consider. I can understand your frustration, however it's slightly disappointing that a post made in good faith to try to help address some of the various comments on this thread is now being taken as "documented evidence from LW that the November update was unclear, which is therefore unfair." I was asked for an apology for the fact that our changes to terms and conditions left some investors confused and that there were some areas requiring further explanation. Our November update was carefully put together and reviewed by a number of stakeholders to ensure it was understandable, clear, fair and not misleading. There was no intention to leave any confusion. I made an apology for the fact that clearly there were areas you had additional questions on, and I tried to answer these as straightforwardly as possible.
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jester
Member of DD Central
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Post by jester on Feb 9, 2020 16:20:14 GMT
Thank you Matthew . I believe your update here will be most useful in support of my complaint, particularly the admission: ''We apologise that our November announcement was not sufficiently clear about the impact of the changes we made." FCA Principle 7: A firm must pay due regard to the information needs of its clients, and communicate information to them in a way which is clear, fair and not misleading. I try my utmost to avoid contention with other users and focus on progressive discussion ...... but if we want to have active posters from the platforms, then threatening to use their comments as the basis for complaints is utter madness and in the end will do nothing but devalue this community!
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