SteveT
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Post by SteveT on Aug 17, 2020 8:14:41 GMT
AGREED. Anyone who didn’t see that by design (mis-design, over-reliance) the AAs were a liquidity event awaiting to happen were, at best, unfortunately naive. Anyone who still doesn’t get it, with the benefit of hindsight, ... well, probably best not to comment about them. Whilst the early design can be somewhat forgiven, especially in the early year or two, the over-long and over-reliance AC placed on the AA accounts (particularly the QAA) is less excusable. The 90DAA account should have been introduced a lot earlier and followed up by 180DA and 360DA with corresponding steps in interest rate differentials driven by a much lower and less attractive rate for the short term accounts.
This begs the question did AC see these as a liquidity event awaiting to happen or are they at best, unfortunately naive, either way they should not have been advertising and offering these accounts to retail investors.
Nothing wrong with the Access Accounts provided lenders read the key information and risk warnings and took on board the nature of what they were investing in. Many of us did our best to warn the unwary on here many moons ago, but some people still clearly chose to treat the Access Accounts as essentially risk-free instant access deposit accounts (failing to question why they paid 20x - 30x more than a high street bank deposit account!). There are many consumer products that are excellent when used as they should be but carry inherent risks that must be understood first (eg. knives, cars, endowment policies ....). The Access Accounts are no different. Caveat emptor!
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alender
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Post by alender on Aug 17, 2020 8:56:02 GMT
Anyone who didn’t see that by design (mis-design, over-reliance) the AAs were a liquidity event awaiting to happen were, at best, unfortunately naive.
This begs the question did AC see these as a liquidity event awaiting to happen or are they at best, unfortunately naive, either way they should not have been advertising and offering these accounts to retail investors.
AC have two “get out of jail free cards” - 1) There’ll be suitable wording in T&Cs about “normal” market conditions 2) The actual liquidity event that triggered matters was of “act of god” proportions. The platform and retail lenders are broadly both equally culpable and equally “blameless” in this foreseeable outcome. Any retail lender unhappy can exit with a circa 6% discount which given a minimum 6 month prior holding period will net to about a maximum 4% loss. Many will have held for longer than 6 months and will have smaller losses than 4% and be close to or above breakeven. Anyone who holds on for the exit discount to narrow has to take personal responsibility if it widens. Anyone who doesn’t want to crystallise the discount at any one moment can sell a fraction regularly and get the average discount over the period plus a bit of interest. IMO AC could have managed the situation much better, but equally they could have done a lot worse. AC have two “get out of jail free cards” -
1) There’ll be suitable wording in T&Cs about “normal” market conditions
Where in the T&Cs does it state that AC can bring in a SM for AAs, if I thought that this was even a possibility I would have not have invested in these so called accounts. The information is in the wording, "Access Accounts", they are now neither of these, no real access (to a large extent caused by covid, part caused by AC stopping new money entering because of the SM) and they are no longer accounts (caused by AC) as they are now a financial tradable instrument.
The platform and retail lenders are broadly both equally culpable and equally “blameless” in this foreseeable outcome.
The difference is AC are meant to be a professional organisation who have access to the full financial information in the AAs and the lender is an amateur relying mostly on the limited information provided by AC.
Anyone who holds on for the exit discount to narrow has to take personal responsibility if it widens. Anyone who doesn’t want to crystallise the discount at any one moment can sell a fraction regularly and get the average discount over the period plus a bit of interest.
Firstly this is not true, it is those that chose to sell who will widen the exit discount as they will place more money on the market. This market is the creation of AC so therefore AC should take full responsibility.
The SM is a strange market where you cannot see prices unless you attempt to enter the market, in order to see the discounts you have to cancel your place in the exit queue, if AC revert back to the original system (who knows what they will do as it keeps changing) of FIFO you have lost your place just to see the discount. You may say that you can get an idea of the discounts from this board but most AC investors do not read and probably are not aware of this board.
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Post by davee39 on Aug 17, 2020 9:08:17 GMT
You can see the discount by trying to invest in any account not queued for withdrawal, even if you have zero funds available.
The queue position is not really relevant, it only applies if there are no offerred discounted funds, so a discount of 0.1% would get you to the front.
I have today asked ac what their target is for cash balances, and why repayments have stopped, a reply might be forthcoming within 10 days. If customer services are
so overloaded, perhaps a general update on future plans would help.
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SteveT
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Post by SteveT on Aug 17, 2020 9:17:08 GMT
Where in the T&Cs does it state that AC can bring in a SM for AAs, if I thought that this was even a possibility I would have not have invested in these so called accounts. The information is in the wording, "Access Accounts", they are now neither of these, no real access (to a large extent caused by covid, part caused by AC stopping new money entering because of the SM) and they are no longer accounts (caused by AC) as they are now a financial tradable instrument. See section 21: 21. Altered Circumstances and Changes to The Terms If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website. Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.
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Post by bracknellboy on Aug 17, 2020 9:23:29 GMT
AGREED. Anyone who didn’t see that by design (mis-design, over-reliance) the AAs were a liquidity event awaiting to happen were, at best, unfortunately naive. Anyone who still doesn’t get it, with the benefit of hindsight, ... well, probably best not to comment about them. Whilst the early design can be somewhat forgiven, especially in the early year or two, the over-long and over-reliance AC placed on the AA accounts (particularly the QAA) is less excusable. The 90DAA account should have been introduced a lot earlier and followed up by 180DA and 360DA with corresponding steps in interest rate differentials driven by a much lower and less attractive rate for the short term accounts.
This begs the question did AC see these as a liquidity event awaiting to happen or are they at best, unfortunately naive, either way they should not have been advertising and offering these accounts to retail investors.
The magic words "normal market conditions" were of course always there. Whether one chose to read, digest, think through those words or let your eye and brain skip over them is of course another matter.
Whether they should ever have been marketed to retail investors is a valid question to ask: as it is of any of the P2P offerings on the market. However, given the quantum of money I believe you have indicated you had/have in AC, I doubt you are the normal "retail investor". I wonder how you categorised yourself / answered the questions with regard to ACs fitness to invest questions ? Or other platforms standardised tests of HNW/Sophisticated investor. I think those tests were introduced sometime before C19 hit the air circulatory device. So presumably sufficient time for anyone to have taken the required suitability test and think ummm maybe I don't in fact know enough about what I'm doing and to press the withdraw button.
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alender
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Post by alender on Aug 17, 2020 9:37:51 GMT
Anyone who didn’t see that by design (mis-design, over-reliance) the AAs were a liquidity event awaiting to happen were, at best, unfortunately naive.
This begs the question did AC see these as a liquidity event awaiting to happen or are they at best, unfortunately naive, either way they should not have been advertising and offering these accounts to retail investors.
The magic words "normal market conditions" were of course always there. Whether one chose to read, digest, think through those words or let your eye and brain skip over them is of course another matter.
Whether they should ever have been marketed to retail investors is a valid question to ask: as it is of any of the P2P offerings on the market. However, given the quantum of money I believe you have indicated you had/have in AC, I doubt you are the normal "retail investor". I wonder how you categorised yourself / answered the questions with regard to ACs fitness to invest questions ? Or other platforms standardised tests of HNW/Sophisticated investor. I think those tests were introduced sometime before C19 hit the air circulatory device. So presumably sufficient time for anyone to have taken the required suitability test and think ummm maybe I don't in fact know enough about what I'm doing and to press the withdraw button.
The magic words "normal market conditions" were of course always there. Whether one chose to read, digest, think through those words or let your eye and brain skip over them is of course another matter.
The original posts I quoted did not mention "normal market conditions", I am responding to them so this is a no more than a straw man argument.
Why are you so interested in which type of investor I am, this is irrelevant to the point being made, my point is AC are professional and for the recored I am like so many other AC investors, retail.
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alender
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Post by alender on Aug 17, 2020 10:33:38 GMT
Where in the T&Cs does it state that AC can bring in a SM for AAs, if I thought that this was even a possibility I would have not have invested in these so called accounts. The information is in the wording, "Access Accounts", they are now neither of these, no real access (to a large extent caused by covid, part caused by AC stopping new money entering because of the SM) and they are no longer accounts (caused by AC) as they are now a financial tradable instrument. See section 21: 21. Altered Circumstances and Changes to The Terms If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website. Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.HMRC are relevant to changes to terms and conditions which affect the Tax status, the FCA and Office of fair trading is relevant to changes in terms and conditions which affect the investor.
I suggest you check the OFT Unfair contract terms guidance and the FCA guidance on variation of terms in financial service consumer contracts and look in particular on whether the customer will have "freedom to exit", contractually and practically.
It does not matter what AC state it is the OFT and FCA that control the regulations.
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iRobot
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Post by iRobot on Aug 17, 2020 10:42:54 GMT
Why are you so interested in which type of investor I am, this is irrelevant to the point being made, my point is AC are professional and for the recored I am like so many other AC investors, retail. Strictly speaking, I think, all Access lenders are "retail" inasmuch as it's a retail product. The question is how each lender chose to self-certify themselves in the platform's appropriateness test. From AC's email 06/12/19: High Net Worth Investor – This is an investor with significant income (£100,000 p.a or more) or significant net assets (£250,000 or more). Sophisticated Investor – An investor who has made more than one peer-to-peer investment in the last two years or who meets certain other criteria relating to investment experience. Restricted Investor – An investor who has not invested more than more than 10% of their net assets into peer-to-peer lending in the last year and undertakes to not invest more than 10% in the next year. The full definitions are here.
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Post by highlevel on Aug 17, 2020 10:46:43 GMT
Agreed on the points re the suitability, risk warning ect of AC’s offerings – However the Access Accounts have undeniably been morphed into something that is now materially different from what the product was pre-CV19. The way this has been handled from a PR perspective has been very poor to date, and I hope AC are using this saga to look at how they communicate with its retail lender base. I’m not advocating minute-by-minute justification of how AC are running their operations. But get the basics right for a start: Platform updates / FAQs are sparse, poorly worded and ambiguous. Live Chat / Support appear to be out of the loop on changes. The lender bulletins are poorly written and verging on rambling. The Poor coms to date give the impression of very little strategic direction and more akin to arranging the deckchairs on the Titanic – How many spooked retail investors have pushed the button on SM sales based off fear factor alone? It’s a difficult situation all round but clear and concise (and version controlled!) updates would have gone a long way. To the pro-rata pay-out on queued withdrawals: AC were paying out pro-rata on queued withdrawals when the uninvested cash element of the AA was ~2%* It is now ~11.8%* and there has been no pay-out on queued withdrawals since the new secondary market went live. [*not my figs, but taken from those more knowledgeable on these boards.] During the period of the SM implementation ~£15m* was repaid, with only a single pro-rota payment (calculated to be £82.25* per £10k invested) made to date. Was this a roll up payment covering the suspension period? A ‘run’ post SM code release to test functionality? or something else? Are AC building a ‘war chest’ to fund future additional tranches? If so what’s the pipeline forecast for this? What’s the tippling point for it to be seen as unethical to be withholding repayments from distribution to lenders under a blanket ‘future provisions’ exemption? Are there technical issues currently impacting pro-rata distributions? Regardless, some hefty repayments have been made which (save for a single pay-out in the minutes before the SM went live) have not been distributed to lenders with queued withdrawals so something has changed. Only AC have the answers and they don’t appear to be providing a clear steer in their site updates/ FAQs, the official support channels, or on these boards where they frequently engage with lenders. At the end of the day AC have an obligation to its retail lenders and the implementation of the SM should not treated as get out of jail card. Edited: No sooner do I hit create on this post the following is posted on another thread: (https://p2pindependentforum.com/thread/17734/forthcoming-loan-redemptions-ac) #745 has made a principal repayment, credited to MLA, again nothing to AAs
chris is there an issue with principal repayments to access accounts not occurring? It's frozen as part of the roll out plan for the marketplace, we need to test putting through a large number of reinvestments through the marketplace with real world data to make sure it runs smoothly. Plan is to continue distributions from Wednesday, although that is subject to change, where it will catch up with the redemptions made since launch. The above really highlights the lack of clear communication from AC for me - Speculation since SM go live last Wednesday with no official update from AC, yet their Technical Director posting in a personal capacity has provided a concise insight into matters (thanks for this chris ) |
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SteveT
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Post by SteveT on Aug 17, 2020 11:38:30 GMT
See section 21: 21. Altered Circumstances and Changes to The Terms If there is a change in circumstances or a change in the law, HM Revenue & Customs practice or regulations or the interpretation of them, or if any Assetz Capital Company wishes to make changes to the services which it provides on the Network or Website, the Assetz Capital Companies may amend these Terms from time to time as they think fit.
Where a change to these Terms does not affect existing Micro Loans and does not disadvantage existing Lending Members or where the changes are reasonably believed by the Assetz Capital Companies to be in the interests of the Lending Members, the Assetz Capital Companies may make any amendments to these Terms at any time with immediate effect. Where it is necessary or desirable to make changes to these Terms which affect existing Micro Loans or may disadvantage existing Lending Members, the Assetz Capital Companies will endeavour to provide 30 days notice before any changes take effect. Any such notice shall be posted on the Website. Any amendments will be posted on the Website as soon as reasonably practicable. By continuing to use the Website, by either logging in or leaving investments within Investment Accounts or Access Accounts on a daily basis, each Lending Member agrees to be bound by the amended Terms.HMRC are relevant to changes to terms and conditions which affect the Tax status, the FCA and Office of fair trading is relevant to changes in terms and conditions which affect the investor.
I suggest you check the OFT Unfair contract terms guidance and the FCA guidance on variation of terms in financial service consumer contracts and look in particular on whether the customer will have "freedom to exit", contractually and practically.
It does not matter what AC state it is the OFT and FCA that control the regulations. Yawn. You asked a question, I answered it. Over to you.
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iRobot
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Post by iRobot on Aug 17, 2020 11:57:32 GMT
... The way this has been handled from a PR perspective has been very poor to date, and I hope AC are using this saga to look at how they communicate with its retail lender base. ... The above really highlights the lack of clear communication from AC for me - Speculation since SM go live last Wednesday with no official update from AC, yet their Technical Director posting in a personal capacity has provided a concise insight into matters (thanks for this chris ) Great post, highlevel and I agree with much of what you say. Whilst it's great to have chris (and stuartassetzcapital, in more reasoned times) making contributions to the forum, I am concerned by the asymmetry of information being communicated. Fantastic for us to know that there's a disbursement planned for Wednesday, but what about those who may be inclined to use the SM (and take a discount hit) over the next couple of days, because they aren't aware? IIRC, AC customers haven't yet received July's Lender Bulletin. That would be an ideal opportunity to bring everybody up to speed on any number of topics. (And for those that don't bother reading the Bulletin, that's their problem.)
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blender
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Post by blender on Aug 17, 2020 13:17:12 GMT
Excellent logic, iRobot , but let us not shoot the messenger who brings good news. All have access to this forum, if they can be bothered. |
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blender
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Post by blender on Aug 17, 2020 14:46:36 GMT
Many of the AC investors will have lives outside of p2p and will not even have noticed the SM. Sad but true.
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dead-money
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Post by dead-money on Aug 17, 2020 15:06:32 GMT
... Edited: No sooner do I hit create on this post the following is posted on another thread: (https://p2pindependentforum.com/thread/17734/forthcoming-loan-redemptions-ac) It's frozen as part of the roll out plan for the marketplace, we need to test putting through a large number of reinvestments through the marketplace with real world data to make sure it runs smoothly. Plan is to continue distributions from Wednesday, although that is subject to change, where it will catch up with the redemptions made since launch. The above really highlights the lack of clear communication from AC for me - Speculation since SM go live last Wednesday with no official update from AC, yet their Technical Director posting in a personal capacity has provided a concise insight into matters (thanks for this chris )
FYI, at the same time Chris posted this, the AC live chat support stance changed to provide verbatim the same statement. Prior to that it was "they are just with the accounts department to be redistributed in due course."
I agree it would have been better for all concerned if the 'pause' in repayments was communicated from the outset.
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cb25
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Post by cb25 on Aug 17, 2020 15:09:09 GMT
... Edited: No sooner do I hit create on this post the following is posted on another thread: (https://p2pindependentforum.com/thread/17734/forthcoming-loan-redemptions-ac) The above really highlights the lack of clear communication from AC for me - Speculation since SM go live last Wednesday with no official update from AC, yet their Technical Director posting in a personal capacity has provided a concise insight into matters (thanks for this chris )
FYI, at the same time Chris posted this, the AC live chat support stance changed to provide verbatim the same statement. Prior to that it was "they are just with the accounts department to be redistributed in due course."
I agree it would have been better for all concerned if the 'pause' in repayments was communicated from the outset.
Would be even better imho if AC learnt to test their code on a parallel high-volume system, e.g. a copy of the live customer system.
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