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Post by diversifier on Jun 15, 2020 21:01:52 GMT
People invest in the product without understanding what they investing in and then blame others when they should blame their own naivety. RS haven't helped with their marketing. Not really. You are strawmanning that the problem is that *some people* failed to understand that Access might not be immediate. Indeed *some* people did, but you are missing the point for most people. This isn’t “investor behaviour”, this is RS making decisions that are “allowed” but directly incentivise investors to leave the platform. The numbers matter, and the details matter. You shouldn’t be blaming people for their “naivety”, RS are acting stoopid and poisoning the well. The average outstanding duration claimed is 21 months. Not “up to 5 years”, let’s use the numerical value. Therefore, in the three months since RYI peak, investors received repayments to reinvest of 3/21 = 14% of total assets to allocate =£121m. RS initially claimed to have had only 10% RYI = £85m. They *could* have acted immediately on 12th March, allocated cashflow entirely to RYI, paused new lending, and paid off the entire queue within 2 months! This could all have been over and done with weeks ago! They chose not to, and instead allocated half to new lending. This slowed the queue servicing by 50%, in favour of keeping their lending going. Bad, bad decision. Ok, they are *allowed* to do that by Ts and Cs, but surely you can see that this perpetuated the problem? For as long as everyone can see a massive queue for the exit, doing anything other than joining that queue is illogical. Sure enough, by end April the total RYI had further doubled to around 19%. Remember, if RS had acted promptly, the car-crash would have been basically over by that point. Then, what did RS do? Did they belatedly act to cease new lending, doubling the rate at which the queue is serviced, and get on top of the problem? Maybe even try to incentivise people to re-invest in some way - some improvement in Ts and Cs even if extra interest couldnt be afforded? No, they did not. Instead, they got out their air horns and beating sticks, literally herding people to the exit by halving interest rates. I don’t know how much the queue will grow this month. But I *do* know, that as long as people are waiting 3 months, then 4 months for their money, they will grow increasingly loud on places like Trustpilot giving 1* reviews and protesting that they can’t get their money back. And as long as that continues, there won’t be any new investors, which means that by definition the queue can only grow, not shrink. If RS doesn’t take any action, nothing will change, and then it is mathematically impossible for the queue to do anything but grow without limit. And maybe there isn’t anything that RS can do now. Maybe it had only one chance on March 12th and blew it, or maybe it had a last chance at end of April, and blew that. But either way, it’s RS action (or rather lack of) not investors, who are just responding as direct consequences. Then there’s the value of the duration itself, 21 months. Sure, in March 2020, there’s nothing that could be done to change that. But that itself was RS’s strategic decision that has come back to bite them. Nobody *made* them lend 18-month and even 24-month bullet property loans and fold them into Access (yes, they do exist, I had them). That was their choice. The only choice we had was take-it-or-leave-it, and they weren’t very transparent about it. Take a step back. Every month they lent shorter would have increased cashflow by 5% to manage if the s* hit the fan. Even if they had just restricted their property loans to 12 months, they would now have £5m a week instead of £4m a week RYI. Let that sink in for a moment. Bad, bad, decisions. And finally there’s the forced re-investment in Access. I reckon RS *thought* they were being clever, momentum selling. But they failed to look at it from the investors point of view. In the term accounts, during a crisis like this, I can just turn off reinvestment (and have done). No RYI. But in Access, unless I want to condemn myself to logging in *every day for the next five years to sweep pennies of interest*, I am forced to RYI. If I don’t RYI, I never get the money back. Not in five years, not in twenty. It’s lost, forever “reinvesting” in some weird time-loop like a Terminator movie. It’s just a bank account! That gives me 0.5% more interest than NS&I! That I have to manage daily, to recover just a few quid per day! Literally, it’s a minimum wage job, the time spent doing that. I don’t know what sharper stick RS could have poked us with to force RYI.
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robski
Member of DD Central
Posts: 772 
Likes: 462
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Post by robski on Jun 16, 2020 6:58:42 GMT
People invest in the product without understanding what they investing in and then blame others when they should blame their own naivety. RS haven't helped with their marketing. Not really. You are strawmanning that the problem is that *some people* failed to understand that Access might not be immediate. Indeed *some* people did, but you are missing the point for most people. This isn’t “investor behaviour”, this is RS making decisions that are “allowed” but directly incentivise investors to leave the platform. The numbers matter, and the details matter. You shouldn’t be blaming people for their “naivety”, RS are acting stoopid and poisoning the well. The average outstanding duration claimed is 21 months. Not “up to 5 years”, let’s use the numerical value. Therefore, in the three months since RYI peak, investors received repayments to reinvest of 3/21 = 14% of total assets to allocate =£121m. RS initially claimed to have had only 10% RYI = £85m. They *could* have acted immediately on 12th March, allocated cashflow entirely to RYI, paused new lending, and paid off the entire queue within 2 months! This could all have been over and done with weeks ago! They chose not to, and instead allocated half to new lending. This slowed the queue servicing by 50%, in favour of keeping their lending going. Bad, bad decision. Ok, they are *allowed* to do that by Ts and Cs, but surely you can see that this perpetuated the problem? For as long as everyone can see a massive queue for the exit, doing anything other than joining that queue is illogical. Sure enough, by end April the total RYI had further doubled to around 19%. Remember, if RS had acted promptly, the car-crash would have been basically over by that point. Then, what did RS do? Did they belatedly act to cease new lending, doubling the rate at which the queue is serviced, and get on top of the problem? Maybe even try to incentivise people to re-invest in some way - some improvement in Ts and Cs even if extra interest couldnt be afforded? No, they did not. Instead, they got out their air horns and beating sticks, literally herding people to the exit by halving interest rates. I don’t know how much the queue will grow this month. But I *do* know, that as long as people are waiting 3 months, then 4 months for their money, they will grow increasingly loud on places like Trustpilot giving 1* reviews and protesting that they can’t get their money back. And as long as that continues, there won’t be any new investors, which means that by definition the queue can only grow, not shrink. If RS doesn’t take any action, nothing will change, and then it is mathematically impossible for the queue to do anything but grow without limit. And maybe there isn’t anything that RS can do now. Maybe it had only one chance on March 12th and blew it, or maybe it had a last chance at end of April, and blew that. But either way, it’s RS action (or rather lack of) not investors, who are just responding as direct consequences. Then there’s the value of the duration itself, 21 months. Sure, in March 2020, there’s nothing that could be done to change that. But that itself was RS’s strategic decision that has come back to bite them. Nobody *made* them lend 18-month and even 24-month bullet property loans and fold them into Access (yes, they do exist, I had them). That was their choice. The only choice we had was take-it-or-leave-it, and they weren’t very transparent about it. Take a step back. Every month they lent shorter would have increased cashflow by 5% to manage if the s* hit the fan. Even if they had just restricted their property loans to 12 months, they would now have £5m a week instead of £4m a week RYI. Let that sink in for a moment. Bad, bad, decisions. And finally there’s the forced re-investment in Access. I reckon RS *thought* they were being clever, momentum selling. But they failed to look at it from the investors point of view. In the term accounts, during a crisis like this, I can just turn off reinvestment (and have done). No RYI. But in Access, unless I want to condemn myself to logging in *every day for the next five years to sweep pennies of interest*, I am forced to RYI. If I don’t RYI, I never get the money back. Not in five years, not in twenty. It’s lost, forever “reinvesting” in some weird time-loop like a Terminator movie. It’s just a bank account! That gives me 0.5% more interest than NS&I! That I have to manage daily, to recover just a few quid per day! Literally, it’s a minimum wage job, the time spent doing that. I don’t know what sharper stick RS could have poked us with to force RYI. Too much fail to really unpick, but You started wrong right at the beginning with the RS could have used £121M to clear the queue. Only if they disregarded everyones settings, some of those same people in the queue requesting RYIs would have needed their money to clear RYIs And those like me passively withdrawing for some time, should my money have been forced to support RYIs. Clearly no in both cases.
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Post by diversifier on Jun 16, 2020 8:56:00 GMT
Not really. You are strawmanning that the problem is that *some people* failed to understand that Access might not be immediate. Indeed *some* people did, but you are missing the point for most people. This isn’t “investor behaviour”, this is RS making decisions that are “allowed” but directly incentivise investors to leave the platform. The numbers matter, and the details matter. You shouldn’t be blaming people for their “naivety”, RS are acting stoopid and poisoning the well. The average outstanding duration claimed is 21 months. Not “up to 5 years”, let’s use the numerical value. Therefore, in the three months since RYI peak, investors received repayments to reinvest of 3/21 = 14% of total assets to allocate =£121m. RS initially claimed to have had only 10% RYI = £85m. They *could* have acted immediately on 12th March, allocated cashflow entirely to RYI, paused new lending, and paid off the entire queue within 2 months! This could all have been over and done with weeks ago! They chose not to, and instead allocated half to new lending. This slowed the queue servicing by 50%, in favour of keeping their lending going. Bad, bad decision. Ok, they are *allowed* to do that by Ts and Cs, but surely you can see that this perpetuated the problem? For as long as everyone can see a massive queue for the exit, doing anything other than joining that queue is illogical. Sure enough, by end April the total RYI had further doubled to around 19%. Remember, if RS had acted promptly, the car-crash would have been basically over by that point. Then, what did RS do? Did they belatedly act to cease new lending, doubling the rate at which the queue is serviced, and get on top of the problem? Maybe even try to incentivise people to re-invest in some way - some improvement in Ts and Cs even if extra interest couldnt be afforded? No, they did not. Instead, they got out their air horns and beating sticks, literally herding people to the exit by halving interest rates. I don’t know how much the queue will grow this month. But I *do* know, that as long as people are waiting 3 months, then 4 months for their money, they will grow increasingly loud on places like Trustpilot giving 1* reviews and protesting that they can’t get their money back. And as long as that continues, there won’t be any new investors, which means that by definition the queue can only grow, not shrink. If RS doesn’t take any action, nothing will change, and then it is mathematically impossible for the queue to do anything but grow without limit. And maybe there isn’t anything that RS can do now. Maybe it had only one chance on March 12th and blew it, or maybe it had a last chance at end of April, and blew that. But either way, it’s RS action (or rather lack of) not investors, who are just responding as direct consequences. Then there’s the value of the duration itself, 21 months. Sure, in March 2020, there’s nothing that could be done to change that. But that itself was RS’s strategic decision that has come back to bite them. Nobody *made* them lend 18-month and even 24-month bullet property loans and fold them into Access (yes, they do exist, I had them). That was their choice. The only choice we had was take-it-or-leave-it, and they weren’t very transparent about it. Take a step back. Every month they lent shorter would have increased cashflow by 5% to manage if the s* hit the fan. Even if they had just restricted their property loans to 12 months, they would now have £5m a week instead of £4m a week RYI. Let that sink in for a moment. Bad, bad, decisions. And finally there’s the forced re-investment in Access. I reckon RS *thought* they were being clever, momentum selling. But they failed to look at it from the investors point of view. In the term accounts, during a crisis like this, I can just turn off reinvestment (and have done). No RYI. But in Access, unless I want to condemn myself to logging in *every day for the next five years to sweep pennies of interest*, I am forced to RYI. If I don’t RYI, I never get the money back. Not in five years, not in twenty. It’s lost, forever “reinvesting” in some weird time-loop like a Terminator movie. It’s just a bank account! That gives me 0.5% more interest than NS&I! That I have to manage daily, to recover just a few quid per day! Literally, it’s a minimum wage job, the time spent doing that. I don’t know what sharper stick RS could have poked us with to force RYI. Too much fail to really unpick, but You started wrong right at the beginning with the RS could have used £121M to clear the queue. Only if they disregarded everyones settings, some of those same people in the queue requesting RYIs would have needed their money to clear RYIs And those like me passively withdrawing for some time, should my money have been forced to support RYIs. Clearly no in both cases. No, sorry, you need to do your maths analysis properly and re-read the Ts and Cs. I’ve already done the calculations elsewhere on the forum, working out cashflow allowing for people passively withdrawing. You are correct that those people (RYIs plus passive withdraws) can’t have their money used for RYI. RS’s March performance data can be analysed to give 11%. Indeed, RS would have “only” had discretionary £108m over 3 months. That’s a lot more than the “less than £85m”. Even now, RS still divide 50/50 between RYI and new lends. That is their discretion and choice. They could choose split 0/100, 25/75, 50/50, or 100/0. They’ve picked 50/50, and that’s all on them. Show me on the Ts and Cs where it says that as an investor you are somehow entitled to buy new loans rather than secondhand? You can’t. Today, RS *still* generate £34m per month cashflow over which they have free choice, on a queue that should be a lot less than £85m, but has (definitely, by calculation of their financials) now grown to at least double that. They started with a two month backlog, and have grown it to *best case* backlog of 7 months remaining after 3 months elapsed. Slow handclap. Their choice, their consequence.
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Post by honda2ner on Jun 16, 2020 9:04:03 GMT
People invest in the product without understanding what they investing in and then blame others when they should blame their own naivety. RS haven't helped with their marketing. Not really. You are strawmanning that the problem is that *some people* failed to understand that Access might not be immediate. Indeed *some* people did, but you are missing the point for most people. This isn’t “investor behaviour”, this is RS making decisions that are “allowed” but directly incentivise investors to leave the platform. The numbers matter, and the details matter. You shouldn’t be blaming people for their “naivety”, RS are acting stoopid and poisoning the well. The average outstanding duration claimed is 21 months. Not “up to 5 years”, let’s use the numerical value. Therefore, in the three months since RYI peak, investors received repayments to reinvest of 3/21 = 14% of total assets to allocate =£121m. RS initially claimed to have had only 10% RYI = £85m. They *could* have acted immediately on 12th March, allocated cashflow entirely to RYI, paused new lending, and paid off the entire queue within 2 months! This could all have been over and done with weeks ago! They chose not to, and instead allocated half to new lending. This slowed the queue servicing by 50%, in favour of keeping their lending going. Bad, bad decision. Ok, they are *allowed* to do that by Ts and Cs, but surely you can see that this perpetuated the problem? For as long as everyone can see a massive queue for the exit, doing anything other than joining that queue is illogical. Sure enough, by end April the total RYI had further doubled to around 19%. Remember, if RS had acted promptly, the car-crash would have been basically over by that point. Then, what did RS do? Did they belatedly act to cease new lending, doubling the rate at which the queue is serviced, and get on top of the problem? Maybe even try to incentivise people to re-invest in some way - some improvement in Ts and Cs even if extra interest couldnt be afforded? No, they did not. Instead, they got out their air horns and beating sticks, literally herding people to the exit by halving interest rates. I don’t know how much the queue will grow this month. But I *do* know, that as long as people are waiting 3 months, then 4 months for their money, they will grow increasingly loud on places like Trustpilot giving 1* reviews and protesting that they can’t get their money back. And as long as that continues, there won’t be any new investors, which means that by definition the queue can only grow, not shrink. If RS doesn’t take any action, nothing will change, and then it is mathematically impossible for the queue to do anything but grow without limit. And maybe there isn’t anything that RS can do now. Maybe it had only one chance on March 12th and blew it, or maybe it had a last chance at end of April, and blew that. But either way, it’s RS action (or rather lack of) not investors, who are just responding as direct consequences. Then there’s the value of the duration itself, 21 months. Sure, in March 2020, there’s nothing that could be done to change that. But that itself was RS’s strategic decision that has come back to bite them. Nobody *made* them lend 18-month and even 24-month bullet property loans and fold them into Access (yes, they do exist, I had them). That was their choice. The only choice we had was take-it-or-leave-it, and they weren’t very transparent about it. Take a step back. Every month they lent shorter would have increased cashflow by 5% to manage if the s* hit the fan. Even if they had just restricted their property loans to 12 months, they would now have £5m a week instead of £4m a week RYI. Let that sink in for a moment. Bad, bad, decisions. And finally there’s the forced re-investment in Access. I reckon RS *thought* they were being clever, momentum selling. But they failed to look at it from the investors point of view. In the term accounts, during a crisis like this, I can just turn off reinvestment (and have done). No RYI. But in Access, unless I want to condemn myself to logging in *every day for the next five years to sweep pennies of interest*, I am forced to RYI. If I don’t RYI, I never get the money back. Not in five years, not in twenty. It’s lost, forever “reinvesting” in some weird time-loop like a Terminator movie. It’s just a bank account! That gives me 0.5% more interest than NS&I! That I have to manage daily, to recover just a few quid per day! Literally, it’s a minimum wage job, the time spent doing that. I don’t know what sharper stick RS could have poked us with to force RYI. Whilst I agree with most of what you have said, RS's behaviour shouldn't come as any surprise. RS has a long and colourful history of bad, bad decisions that smack of desperation and carelessness, how they kept any investors simply amazed me. The wholesale lending disaster when they had to take bankrupt car finance firms onto their books or it would swallow the PF whole and eat into lender interest. HUGE red flag & this was when 2018? A rolling market that doesn't roll. Wow, that's nuts. A company called RateSetter that doesn't allow setting of rates. Pure bonkers. Automatic reinvestment of funds at paltry rates that can't be controlled. Dangerous & desperate. Company never made a profit and up for sale. Basket case that even the current board don't want anything to do with. IMO, any investor faced with this lot needs their brains testing for keeping money in RS. I kept only a few hundred quid of 5 year loans paying in excess of 7% on drawdown and decided they weren't worth the risk at the end of March. Yes, this mess has been 99% caused by RS with 1% covid tipping it over the edge but it was all out in the open for everyone to see.
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gg
Posts: 83
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Post by gg on Jun 16, 2020 10:01:02 GMT
My loan book in the 5 year market averaged 5.6% when I started the RYI and it cost me 1.5% often pot to do so. I don’t know if the 1.5% went to RS’s Christmas Party fund or to the RYI queuers.
In order to sell these loans to new investors, RS needed to match to people willing to accept 5.6% (or up to a higher percentage if they used some or all of the 1.5% fee to sweeten the deal).
Those selling Access loan books probably average nearer 3%. To sell these on to new investors, RS would need to find people willing to invest at 3% (and there was no exit penalty to allow for any sweetening if the deal).
gg
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Post by diversifier on Jun 16, 2020 10:54:40 GMT
My loan book in the 5 year market averaged 5.6% when I started the RYI and it cost me 1.5% often pot to do so. I don’t know if the 1.5% went to RS’s Christmas Party fund or to the RYI queuers. In order to sell these loans to new investors, RS needed to match to people willing to accept 5.6% (or up to a higher percentage if they used some or all of the 1.5% fee to sweeten the deal). Those selling Access loan books probably average nearer 3%. To sell these on to new investors, RS would need to find people willing to invest at 3% (and there was no exit penalty to allow for any sweetening if the deal). gg Indeed. And since that would be a  deal for new investors, there are few takers, and the Access RYI queue moves very slowly. But. There’s a very simple alternate action open to RS. They could just re-open the interest rate adjustment on Access, available as used to be. It can be an *option*. If they float the Access interest rate, and *ask* RYI’ers whether they want to *opt in* to pay a market rate adjustment - equivalent to a capital haircut in return for liquidity. The different account types operate with separate queues, so it doesn’t affect term accounts. The interest rate will float to a free market value, there will be an inrush of risk-seeking capital, and those who want to exit do so with haircut. Those who don’t accept a haircut, remain in the queue until things free up - which will probably take a year or more. But that’s no different to today. Offering an opt-in contract change doesn’t violate any Ts and Cs.
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robski
Member of DD Central
Posts: 772
Likes: 462
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Post by robski on Jun 16, 2020 10:58:28 GMT
My loan book in the 5 year market averaged 5.6% when I started the RYI and it cost me 1.5% often pot to do so. I don’t know if the 1.5% went to RS’s Christmas Party fund or to the RYI queuers. In order to sell these loans to new investors, RS needed to match to people willing to accept 5.6% (or up to a higher percentage if they used some or all of the 1.5% fee to sweeten the deal). Those selling Access loan books probably average nearer 3%. To sell these on to new investors, RS would need to find people willing to invest at 3% (and there was no exit penalty to allow for any sweetening if the deal). gg I believe the fee goes to RS not the queue. To got the queue it would need to belong to "someone" thats not lender nor the PF, the only logical place is the RS pot I dont have any issues with this, putting it in the RS pot means more chance of platform survival
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deal for new investors, there are few takers, and the Access RYI queue moves very slowly.