JamesFrance
Member of DD Central
Port Grimaud 1974
Posts: 1,323 
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Post by JamesFrance on Jun 20, 2020 16:14:22 GMT
Regulation has not benefited UK platform investors, half the ones I invested with have collapsed with costs involving the FCA consuming large amounts of our money. I have invested with several Euro platforms since 2013 and all have been profitable, far more than most UK platforms, but in the present situation I have withdrawn nearly all my money being concerned about future regulation making the loan originators unprofitable and causing Euro platform defaults. I have been trying to exit Assetz for over 6 months, but that is proving difficult with large unsaleable loans made through their business account which they scrapped.
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Post by wiseclerk on Jun 20, 2020 18:53:48 GMT
Hi everyone, I'm new to the forum and to UK P2P investing, although I've been investing in European P2P sites for a bit more than a year (Mintos, Estateguru, Evoestate, etc). I have been doing some research on UK platforms and I've found that interests are slightly lower. However, they seem more regulated than the European ones, and that's what I'm looking for at the moment.
Hi. I am mainly in European p2p platforms but have used a few UK ones. You are right the UK regulation is "better documented" (at least when you do not compare to heavily regulated markets like Germany, Austria or France). But from an investor's viewpoint the UK regulation has not brought much benefit - or protection. Search the forum here and you'll find hairraising stories around Lendy, Collateral, ...
Therefore even if you do it for geographical or currency diversification I would think twice before starting a new UK p2p lending portfolio in the current economic situation.
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ilmoro
Member of DD Central
'Wondering which of the bu***rs to blame, and watching for pigs on the wing.' - Pink Floyd
Posts: 11,329
Likes: 11,549
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Post by ilmoro on Jun 20, 2020 19:02:24 GMT
Hi everyone, I'm new to the forum and to UK P2P investing, although I've been investing in European P2P sites for a bit more than a year (Mintos, Estateguru, Evoestate, etc). I have been doing some research on UK platforms and I've found that interests are slightly lower. However, they seem more regulated than the European ones, and that's what I'm looking for at the moment.
Hi. I am mainly in European p2p platforms but have used a few UK ones. You are right the UK regulation is "better documented" (at least when you do not compare to heavily regulated markets like Germany, Austria or France). But from an investor's viewpoint the UK regulation has not brought much benefit - or protection. Search the forum here and you'll find hairraising stories around Lendy, Collateral, ...
Therefore even if you do it for geographical or currency diversification I would think twice before starting a new p2p lending portfolio in the current economic situation.
Remember that most of the issues with the UK regulation predated the changes at the end of the year. P2P is now quite highly regulated, with investor classification & suitability, detailed risk & loan pricing information disclosure etc mandatory.
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Post by wiseclerk on Jun 20, 2020 19:29:18 GMT
But still? A company that can change it's own record at the regulatory's body register and the regulatory body is not aware of it?
And the self certification suitability quizzes are a joke in my opinion (if the goal is to prohibit any investors from carrying risks that are not suitable for them - a prime example is Seedrs - I know it is not p2p lending but is an obvious example. I love Seedrs but just spend 10 minutes reading the discussions on the forums and you'll easily find multiple examples of investors that have no clue what they invested in and how equity funding for startups works in the first place). And they all passed the classification.
Yes the regulation has been stepped up, but does this provide more security for investors or just a false sense of security? Personally I am not convinced. My past investments on UK platforms did mostly well but on the other hand I fared even better on several Euro p2p lending sites and felt none of this was correlated to level of regulation.
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Post by nooneere on Jun 20, 2020 20:19:41 GMT
The obvious "fix" I can see would be for a platform to be a lender in its own right needing to offer say at least 10% in ever loan issued. This is very close to the Loanpad model actually. verunce I understand you cannot invest with LP. CP look the safest of the platforms you mention, and this news item on them would be worth reading www.altfi.com/article/6715_crowdproperty-reaches-75m-lending-milestone (I haven't invested with CP yet, but will probably do so in the future.)
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Post by verunce on Jun 21, 2020 8:29:20 GMT
That's good to know. I've definitely read in the past about how good CP is doing. However, for now I'll stay away from UK p2p. I'll see how things develop and may consider investing in it in the future, as I'm surely keeping part of my portfolio in GPB (although it will be in a savings account for now).
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Post by honda2ner on Jun 21, 2020 11:09:21 GMT
Always nervous about following crowds, CP does seem to be doing nicely and I wish them well but they are in their goldilocks moment where they are just starting to grow rapidly as money floods in. This is the key moment in time that decides if they are going to stumble or thrive.
As a general rule of thumb if dumb money is piling in (not suggesting anyone here is dumb, the fact that you're reading this forum shows a tiny bit of due diligence) then I'm considering piling out as the risk of a platform being overwhelmed by deposits increases the pressure to get those deposits leant and that's where mistakes happen. Only time will tell if they pull it off so what I'm looking for is complaints of cash drag that demonstrate they are struggling to find enough good borrowers and are NOT being tempted to lend to slightly riskier borrowers just to use that mountain of lenders cash.
Been through the goldilocks moment with so many platforms now it feels like a Bond movie (Bond meets girl, girl killed by bad guy, Bond meets another girl & goes on to defeat bad guy, rinse, repeat). Playing P2P is 50% about deciding which platform to invest in and 50% which platforms to escape from. I review all platforms every 3 months and try to be as cold and unemotional as possible, just because a platform has a good website or good customer service that doesn't make the borrowers better, the platform is just the greasy salesman putting borrower and lender together for a fee.
Personally I'm way too heavy in property loans so am looking for diversification into completely different market segments so CP isn't for me at the moment.
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Post by Ace on Jun 21, 2020 12:07:50 GMT
Always nervous about following crowds, CP does seem to be doing nicely and I wish them well but they are in their goldilocks moment where they are just starting to grow rapidly as money floods in. This is the key moment in time that decides if they are going to stumble or thrive. As a general rule of thumb if dumb money is piling in (not suggesting anyone here is dumb, the fact that you're reading this forum shows a tiny bit of due diligence) then I'm considering piling out as the risk of a platform being overwhelmed by deposits increases the pressure to get those deposits leant and that's where mistakes happen. Only time will tell if they pull it off so what I'm looking for is complaints of cash drag that demonstrate they are struggling to find enough good borrowers and are NOT being tempted to lend to slightly riskier borrowers just to use that mountain of lenders cash. Been through the goldilocks moment with so many platforms now it feels like a Bond movie (Bond meets girl, girl killed by bad guy, Bond meets another girl & goes on to defeat bad guy, rinse, repeat). Playing P2P is 50% about deciding which platform to invest in and 50% which platforms to escape from. I review all platforms every 3 months and try to be as cold and unemotional as possible, just because a platform has a good website or good customer service that doesn't make the borrowers better, the platform is just the greasy salesman putting borrower and lender together for a fee. Personally I'm way too heavy in property loans so am looking for diversification into completely different market segments so CP isn't for me at the moment. If you look at their stats page you will see that they've strongly resisted the temptation to grow too rapidly. They claim that they only accept a very very small percentage of requests for funding, don't know to verify that though. The biggest problem from a lender's perspective is indeed cash drag and has been throughout the two years I've been with them. I often receive only 20 to 30% of my requested loan amount via the AutoInvest and find that my fingers are far too slow for self select. I've adjusted to drip feeding my money in slowly to manage this. As you say, it's a sign of very good management that this is the main problem. More deals have appeared lately at slightly lower rates. They claim that this is to allow them to accept more secure loans that don't merit the full 10% charge rate (8% to lenders). I believe them as the number of full rate loans doesn't seem to have reduced, but again, impossible to verify. This really does appear to be a quality outfit IMO.
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cwah
Member of DD Central
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Post by cwah on Jun 21, 2020 20:42:07 GMT
The UK regulatiors (aka the FCA) are the REASON you don't want to invest in the Uk.
The FCA adds many layers of regulations, cost to all the new P2P institutions. And on top of that they limit their ability to get finance.
It's like giving them penalties for doing business here.
That's why Mintos never got approved in the uk because it'd be too costly to do.
And that's why Lendy / fundingsecure and many other collapsed.
And cherry on the top, the FCA can't be sued for mismanagement and loss of investors money.
They are good for sending fines to big banks who get saved by the BoE. But for smaller companies it just end up in bankruptcy as no one save the small one. Investors end up paying for the FCA mismanagement.
Don't invest in p2p uk unless you want to lose your money
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