ian
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Post by ian on Dec 5, 2020 12:36:48 GMT
Further to the recent communication from AC Ask Our Panel it is apparent AC are planning to start lending Access Account funds despite the accounts clearly not allowing investors access to their capital.
Below is the question & answer ......
Q: Hopefully you would agree, investors in the Access Accounts are entitled to their money back and funds invested in, Quick 30- & 90-Day Access Accounts, should not be treated as had they been invested in perpetuity. Given the longest-term loan on the platform is 56 months; What is the absolute drop-dead date all redeemed capital will be returned to investors rather than used to fund further tranches?
A: Thank you for your question, unfortunately, we are unable to provide a ‘drop-dead’ date to your question. However, we can confirm the substantial drawdowns already paid from the Access Accounts and also the growth in the cash balances of the Access Accounts at present mean that all future tranche funding required is forecast to be covered by current cash balances held and we expect to see that forecast to be proven over coming months. This means that we can now consider accelerating withdrawals in the coming months.
Also, whilst we do agree that investors in the Access Accounts are not invested in perpetuity, we must stress that these accounts are not in ‘run off’ and are very much intended to recommence lending and continue as normal in the future and we have to consider the majority of investors who wish to remain invested.
Therefore, as things continue to normalise, the prospect of new lending can be reconsidered, which is highly desirable for the health of the Access Accounts and also contributions to their Provision Funds on an ongoing basis. This is important in order to keep the loan book fresh, maintain or improve diversification and ensure we are not in any kind of run off situation.
In the meantime, we have introduced the Access Account Marketplace which allows investors to apply a discount to their loan holdings to potentially speed up the withdrawal of their capital based on their personal liquidity needs.
Observation there are two blatant lies/contradictions in Martin Heelam’s response.
“We can confirm the substantial drawdowns already paid from the Access Accounts” - personally I have been able to withdraw less than 10% of my capital invested.
“the majority of investors who wish to remain invested” - if that is the case why don’t AC allow the minority to withdraw their capital.
Maybe AC would care to substantiate the above statement actual numbers rather than such spurious statements.
Please tell us :-
How much has been paid into Access Accounts?
How much borrowers capital has been redeemed?
How much of lenders capital has been redeemed?
How much of Access Accounts funds are set for withdrawal?
When are Assetz Capital going to change the names of the Access accounts to something which more accurately reflects their functionality.
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Post by Ton ⓉⓞⓃ on Dec 5, 2020 13:32:22 GMT
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alender
Member of DD Central
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Post by alender on Dec 5, 2020 13:48:23 GMT
The problem is that once AC have got your money they are very reluctant to give much of it back, they tend to believe it is their money now to do with it what they want.
It was necessary and reasonable to lock down the AAs but it is not necessary or reasonable to hold onto excess funds in Accounts named Access beyond the access time. They are planing to use investors money to start new lending to generate fees for AC against a lot of lenders wishes and instructions, no new lending should start until these accounts have proper access. The SM as I predicted was a plan by AC to say to lenders there is access while keeping hold of investors funds without their permission. This was never stated that AC could do such a thing when I invested.
AC also refuse to give us the data we would like on these accounts, very happy to answer easy questions but ignore any request for solid information and data on what is happening.
These are now the invest in perpetuity accounts and have nothing to do with access.
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Post by Harland Kearney on Dec 5, 2020 14:56:35 GMT
I can see this thread is gonna get heated quickly as normal. However, I have one question. Does anybody have a solution as to how AC could reinstall access to the AAs WITHOUT improving confidence? I understand that is the view of some that lending restarting would be viewed as a deduction to confidence but you will likely find that many more members here have the opposite view. Least that is what I have read by comments across the board these past weeks.
AA's cannot just stay in a state of limbo forever, at that point they might as well freeze the accounts and drawdown (run off) like the GBBA's, we'll be here for 5-7 years but that is the only other solution.
Yes AC not making money from fees is an increase in platform risk, therefore an increase to risk for investors and a lowering of confidence. The only way to resolve this is to originate fees or continue charge lenders. Once AC starts to originate loans we will likely find that lender fees become reduced or removed, leading to a further increase in confidence from lenders.
I also don't think the SM was a "plan" by AC to say, hey you have liquidity now! Rather it was a reaction to the demands of many on here for a way out in the early days and they granted it. TBH the SM is one of the few ways right now we can gauge investors confidence and currently the rates are 3-4%. It is not unbelievable that as bad loans are repaid, and new loans are originated this number would REDUCE as the health of the loan book would increase not decrease.
These are my views and I respect everyone who disagrees, as I have sold at a discount already showing that I have lost ALOT of confidence in AC overall since March. I strongly dislike some of the lack of data as Alender pointed out and it points to a stink or wanting to prevent investor decisions based on it.
I have a limit for my investments in AC, and my overall view of their system is not great, despite my defence above. I have some IFSA funds that I just don't see the worthwhile removing so they are staying/plus investor bonus in March. However I am not adding new capital, and I like to share many of the frustrations of the OP & other detractors. I however, don't believe that halting lending will benefit long term investors overall. Assuming that the lending is strict in nature in this environment ofc, something which we can't trust AC on entirely.
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dead-money
Rocket to the Moon
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Post by dead-money on Dec 5, 2020 15:45:14 GMT
So rather than a monthly email which either doesn't get delivered or ends up in spam, now it's just an obscure page on their website eh?! Customer Comms...
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ian
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Post by ian on Dec 5, 2020 17:09:16 GMT
There are 2 issues here :- 1. The restart of lending - which we may have differing views on the merits of; and 2.The blatant lies in the response the question. Substantial drawdowns have not been paid from the Access Accounts and quite frankly the majority of investors do not who wish to remain invested, if that was the case the majority of us would not be in a situation where we haven’t had access to 90% of our capital.
In response to your question HARLAND - if the Martin Heelam is telling the truth and majority do wish to remain invested - then AC allow the minority to withdraw their capital. If that means the funds need to be reduced to 80/70/60/51% of their previous size. AC like any business needs to adjust its business model to operate with a reduced level of loan capital.
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Post by Harland Kearney on Dec 5, 2020 17:21:11 GMT
There are 2 issues here :- 1. The restart of lending - which we may have differing views on the merits of; and 2.The blatant lies in the response the question. Substantial drawdowns have not been paid from the Access Accounts and quite frankly the majority of investors do not who wish to remain invested, if that was the case the majority of us would not be in a situation where we haven’t had access to 90% of our capital. In response to your question HARLAND - if the Martin Heelam is telling the truth and majority do wish to remain invested - then AC allow the minority to withdraw their capital. If that means the funds need to be reduced to 80/70/60/51% of their previous size. AC like any business needs to adjust its business model to operate with a reduced level of loan capital. I wish the cash existed to allow a "minority" of the lenders to exit, however a minority of the lenders only own a minority of the cash. You cannot take cash from other lenders who are long term investors, to pay out those who wish to exit at PAR and bypass the SM. There a number of issues right now with the withdrawal process, even I am in the queue for withdrawals but I have no intention of withdrawing, I am simply taking up discounts with repayments. I imagine if you paid out all that cash, a large chunk will come right back in at a discount, rinse and repeat. That isn't tangible, I am struggling to understand the question. The situation is not ideal, but its far from terrible. For longer term investors the exit plan to normalisation has been said now in those Q&A's, AC intend to maintain the AA's product and stand by its future. Maybe it will end up fool harty, maybe it won't. But an answer is a answer non the less. " Therefore, as things continue to normalise, the prospect of new lending can be reconsidered, which is highly desirable for the health of the Access Accounts and also contributions to their Provision Funds on an ongoing basis. This is important in order to keep the loan book fresh, maintain or improve diversification and ensure we are not in any kind of run off situation." Depending how much you trust AC answer here, basically answers everything we need to know. They do not intend to enter run-off they intend to maintain the product and continue its growth. You purchase a stake in the AA's, they are not holding the "cash" in the intention you are seeing it. Just like how a fund managers cash allocation is not belonging to a small minority, it is everyones equally. I myself, believe that if AC do not recommence lending, the discounts will gradually rise and then we will be in run off. AC would have a chance of keeling over in that situation and I wouldn't wanna be around when it does. TL:DR The health of the loan book takes precedence over short term cash payouts to a minority of lenders.
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Post by westcountryfunder on Dec 6, 2020 10:16:04 GMT
The accuracy or otherwise of AC's response shown at the start of this thread I do not wish to comment upon.
All this debate really boils down to is how urgently do you need your money out of AC? Personally, although I would prefer not to be locked in (other than by accepting a discount), I am much more concerned about the longer term safety of my remaining funds than past misjudgements the consequences of which have not yet played out. I reckon that AC is more likely to come out of the current unforseen economic catastrophe relatively intact than any of its remaining P2P competitors.
It is clear that AC has been far more reliable than the likes of COL FS OR L, and how I rue putting anything into those platforms! I wish AC well, although it will be some time, if ever, before I actually add any further funds.
I do agree though that "Access Accounts" is a grotesque misnomer.
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ian
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Post by ian on Dec 6, 2020 11:02:04 GMT
The accuracy or otherwise of AC's response shown at the start of this thread I do not wish to comment upon. All this debate really boils down to is how urgently do you need your money out of AC? Personally, although I would prefer not to be locked in (other than by accepting a discount), I am much more concerned about the longer term safety of my remaining funds than past misjudgements the consequences of which have not yet played out. I reckon that AC is more likely to come out of the current unforseen economic catastrophe relatively intact than any of its remaining P2P competitors. It is clear that AC has been far more reliable than the likes of COL FS OR L, and how I rue putting anything into those platforms! I wish AC well, although it will be some time, if ever, before I actually add any further funds. I do agree though that "Access Accounts" is a grotesque misnomer. Misnomer - it’s a blatant lie! I spoke to advertising standards ... they informed me if they advertised their products in the press / TV they would take action however as it stood it was outside their remit. They did say however it was a matter for the FCA.
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iRobot
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Post by iRobot on Dec 6, 2020 12:28:48 GMT
<snip>I do agree though that "Access Accounts" is a grotesque misnomer. Misnomer - it’s a blatant lie! I spoke to advertising standards ... they informed me if they advertised their products in the press / TV they would take action however as it stood it was outside their remit. They did say however it was a matter for the FCA. Did the ASA / CAP go into specifics as to why it was outside their remit? From their own website: " The Code also applies to claims on a marketer’s own website and in other non-paid for space online under their control (e.g. their social media accounts and apps) if they are directly connected with the supply of goods or services, opportunities, prizes or gifts." Additionally, I took Lendy to task for some misleading on-line material(s) when it launched a couple of new products; the ASA responded promptly and decisively. (Not that it did any good in the long term, but ... ) My 'view' on "Access" is that it suggests something which isn't a fixed term product and can be cashed in albeit it with possible restrictions and penalties attached; the onus would be on me to understand the specific nature of those penalties or restrictions. Even if a financial product (which returned Interest / Dividends / Coupons / etc) were labelled as "Instant Access", I'd still expect there to be restrictions and penalties. Nothing is for nothing.
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Post by Harland Kearney on Dec 6, 2020 13:48:04 GMT
The FCA will do a load of nothing, and if they do do anything, its at the detriment to lenders.
As for the "access" argument, I guess if the lender FCA approved test, the massive "CAPITAL AT RISK" "LIQUIDIDTY/REDEPTION NOT GURRANTEED" is anything to go by, there is a element of risk involved for beating FSCS secure rates by over double.
I hold Loan Pad in high reguard currently, yet they still use the "access" term on their quick >1 day accounts. I decided not to park cash I need in the short term (within 180 days), as this account is not a bank account. I suggest others do the same.
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Post by westcountryfunder on Dec 6, 2020 15:46:18 GMT
I hold Loan Pad in high reguard currently, yet they still use the "access" term on their quick >1 day accounts. I decided not to park cash I need in the short term (within 180 days), as this account is not a bank account. I suggest others do the same.Yes, this is the nub of the matter. I know nothing about Loan Pad, but for the AC "Access Accounts" to my knowledge it never has been the case that instant access has been guaranteed; only under "normal market conditons" and all that. Not a bank account. We became used to the experience that funds could be withdrawn with very little delay, and I enjoyed this as well. Very nice indeed with a fully acceptable return. If anyone has invested in the "Access Accounts" without reading the conditions then there is not much that can be said. I suggest that some comments here are very overstated. It will do us no good to rock AC's boat too severely.
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Post by Harland Kearney on Dec 6, 2020 16:09:03 GMT
I think because liquidity had largely been untested (from the lenders view) until March on AC, we had 4 years of good within 1 second access to cash. This most likely relaxed alot of peoples woes and I think many investors found themselves swimming nakid when the tide came in, so to speak. I made alot of interest over those years on cash that would have made a negtive return, even after I take my discounts into account. I can admit openly, that I fall into that catagory of somewhat naieve risk management in the lead upto COVID with substantial QAA holdings. (hence the reason I sold at a discount to bring my exposure down, even at a cost it was cost effective risk wise)
The QAA goldilocks is over, and I think moving forwards investors will treat all P2P products in this catagory with a sense of new found caution, that will most likely reduce the amount of investors treating these accounts as a near-cash substitute.
Still, I agree with all lenders, many P2P platforms have been dancing a very thin ice line with this "quick" type of advertising, and many continue to do so.
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alender
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Post by alender on Dec 6, 2020 18:59:09 GMT
I wish the cash existed to allow a "minority" of the lenders to exit, however a minority of the lenders only own a minority of the cash. You cannot take cash from other lenders who are long term investors, to pay out those who wish to exit at PAR and bypass the SM. If there is spare cash in the AAs which looks like the case then AC should pay this out pro rata to investors wishing to withdraw funds, there is no excuse to hold onto this excess cash in accounts described as ACCESS and deny access to these funds. If investors wish to stay they either do not request withdrawals or buy back in on the SM. One of the main reasons for lack of confidence in these accounts is that we cannot trust AC to pay investors back their money when it is available. Investors have every right to bypass the SM, there was not even a hint that AC would create an SM before the lock in. I think it is AC who are using the SM as a way to get investors to bypass the exit at par.
There a number of issues right now with the withdrawal process, even I am in the queue for withdrawals but I have no intention of withdrawing, I am simply taking up discounts with repayments. I imagine if you paid out all that cash, a large chunk will come right back in at a discount, rinse and repeat. This is what I said would happen if an SM is created, I was told many times on this board I was wrong. The SM has encourage people to withdraw, rinse and repeat, also some interest payments before the SM were being used to reinvest in AAs at par and there were some new investments therefore increasing the funds in the AAs, not any more. The SM therefore reduced the funds in the AAs and repayments resulting in less confidence for a number of lenders.Comments in blue.
If AC do not pay excess funds back to investors who wish to withdraw therefore denning investors rightful access to their funds the AAs are locked in not by a run caused by covid but a wilful act by AC to hold onto investors funds against there wishes and instructions.
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Post by Harland Kearney on Dec 6, 2020 19:30:17 GMT
I'm sure somebody else can reply with a more concrate answer, but it is my understanding the large portion of cash right now sitting on the AA's book are for two things. Note these are not my "emotional" views, this is just how the logic/story is looking so far.
1. To fulfill current commitments on tranche based loans (of which there are many)
2. To prepare the accounts to begin relending (this thread)
Ignoring 2. for a second, if 1. is not met, what is it you think happens to your loans? They won't magically repay without the funding, therefore they become effectively worthless and any valuation is gonna be smacked down by firstly a pressured sale and secondly the big ol COVID BS will be used too, to fleace lenders further.
At worst, some borrowers may legally see themselves out of repaying entirely in court, by stating that the borrower did not meet drawdown agreements in the first place, something which has happened on Lendy and FS resulting in 100% capital loss for investors. So no, I don't want 5% of my cash to put the rest of my portfilio at greater risk, if not certain jeapody due to lack of funding. That isn't reasonble or fair.
I imagine that not all drawdowns are 100% of the cash held on accounts, so the rest is most likely to start funding new loans. Now there are many reasons that this is benefical to lenders at least in the medium term. Firstly, it puts less stress on the PF by not needing to use its balances to pay the target interest rate from bad performing loans. Instead this lands on the newly generated loans. Secondly, as has been the entire discussion here, the AA's will avoid "run down" in all effects other than name currently. Thirdly, we can top up the PF though good performing loans, as intended.
I really understand that a minority of lenders may want fully out right now, and want access to their rightful part of the cash. But this will put the product as a whole in jeapody, this seems to be AC's argument and they are marching forward under that assumption. There is a aftertaste of self-preservation in all this for AC, which is bitter sweet to some lenders. They have to pick one or the other, they can't sit on the fence forever and they have clearly picked.
This is just my understanding, I'm not trying to cause a emotional response, but thats the logic I'm seeing so far. We'll see if it works out, AC is not out of the forest yet.
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