corto
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Post by corto on Apr 29, 2021 21:04:32 GMT
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Post by df on Apr 30, 2021 20:27:57 GMT
So instead of properly vetting the providers FCA will focus further on vetting retail investors. Wasn't it FCA who gave Lendy full authorisation when their loan book was in crisis (it gave retail investors a false glimpse of confidence), wasn't it FCA who is responsible for the "COL" mess (most retail investors believed Col had interim authorisation)? I don't mind tests, but I fear FCA might be approaching the issue from the wrong end of the stick.
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corto
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Post by corto on May 1, 2021 10:55:57 GMT
So instead of properly vetting the providers FCA will focus further on vetting retail investors. Wasn't it FCA who gave Lendy full authorisation when their loan book was in crisis (it gave retail investors a false glimpse of confidence), wasn't it FCA who is responsible for the "COL" mess (most retail investors believed Col had interim authorisation)? I don't mind tests, but I fear FCA might be approaching the issue from the wrong end of the stick. I share your point to a good degree. However, I also think the FCA has a defendable position. It does not want to regulate the p2p market (too) much but still protect "naive" investors. People that read this blog probably are less naive about the p2p wild west than everyday Billie who wants to get higher than bank rates and may get lured into p2p by fancy web pages or TV advertisements. The FCA has admitted it made mistakes. Not sure what else they could do than setting up some hurdles. Similar hurdles do exist in the wider financial market already, which you find out if you try to invest into something more complex than shares or bonds. My brokers sometimes asked me questions when I wanted to buy certain products that are considered too complex to evaluate by non-expert retail investors. In most cases I did not make the investment. I am with three S&S brokers: Fidelity doesn't offer complex instruments in the first place; iWeb automatically asks a few questions which one must pass; and Fidelity only warns about the risk but lets you buy anyway. I'd envisage something like this may come for p2p as well.
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aju
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Post by aju on May 3, 2021 8:43:40 GMT
So instead of properly vetting the providers FCA will focus further on vetting retail investors. Wasn't it FCA who gave Lendy full authorisation when their loan book was in crisis (it gave retail investors a false glimpse of confidence), wasn't it FCA who is responsible for the "COL" mess (most retail investors believed Col had interim authorisation)? I don't mind tests, but I fear FCA might be approaching the issue from the wrong end of the stick. I share your point to a good degree. However, I also think the FCA has a defendable position. It does not want to regulate the p2p market (too) much but still protect "naive" investors. People that read this blog probably are less naive about the p2p wild west than everyday Billie who wants to get higher than bank rates and may get lured into p2p by fancy web pages or TV advertisements. The FCA has admitted it made mistakes. Not sure what else they could do than setting up some hurdles. Similar hurdles do exist in the wider financial market already, which you find out if you try to invest into something more complex than shares or bonds. My brokers sometimes asked me questions when I wanted to buy certain products that are considered too complex to evaluate by non-expert retail investors. In most cases I did not make the investment. I am with three S&S brokers: Fidelity doesn't offer complex instruments in the first place; iWeb automatically asks a few questions which one must pass; and Fidelity only warns about the risk but lets you buy anyway. I'd envisage something like this may come for p2p as well. That's' just what i did last year with Zopa and with Ratesetter and their new statements of knowledge level. I'm not sure it stopped me though but then i knew a lot more about p2p than most did at the time and had been in this arena since almost the start of Zopa. Thing is though just looking at the difference that the newly revamped front end for Zopa now affords me compared to what I could do prior to the changes does make me somewhat more uncomfortable that Zopa is being economical with the data available and also the things they now report on their front end is not catering for everything in its portfolio. I'm speaking from a perspective of missing loans since the changes and being unable to check monthly statements fully for errors etc. The defaults reported only apply to the newer products we still have quite a bit of older products left too - they are aware of this since i accused them of misleading info but as yet nearly 5 weeks later nothing has yet to appear on headline defaults. Being aware that others will have a different perspective, once i am fully out i'm not i'd come back to Zopa anyway. Many will not notice the worst aspects of defaults until they start withdrawing or worse paying for incomplete withdrawals - of course at present with covid there are more defaults any way. Personally I'm very fortunate in that we built up a very good head of steam before the current situation arose and should have held my nerve and not paid to sell loans i could but you live and learn i guess. At least we didn't lose anything with RS and we are on target to not lose any capital with Zopa but if i had been later and just in the ISA's products then for us it would definitely be a considerable capital loss and still falling for both our ISA accounts. Of course had I only been in the ISA I might have made different decision on selling who knows. The MRA was much higher but the objective was to release as much as possible and to be fair one will never know how many of the loans that were sellable might have eventually defaulted too. It is what it is and i thought I always knew the defaults might overrun the interest at some point and as the saying goes it isn't really over until the fat lady sings. We still have 4 figures locked in and now the returns are not enough to counteract the defaults so it looks quite worrying - I'm more concerned now that the returns we have really made over the last 8 years are going to be somewhat less than those we were getting at the time. All in all we are still up but not sure the money might have been more productive in a bank at the going rates of the whole period. Anyway that's my take, not sure the statements one has to sign to get the wall cut it for most investors though in these very lean bank rates times. One positive to the earlier pull out is that the bank rates we got are way better than those available now (but still not better than the Zopa rates posted today even).
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Post by mfaxford on May 3, 2021 10:35:07 GMT
Thing is though just looking at the difference that the newly revamped front end for Zopa now affords me compared to what I could do prior to the changes does make me somewhat more uncomfortable that Zopa is being economical with the data available and also the things they now report on their front end is not catering for everything in its portfolio. I'm speaking from a perspective of missing loans since the changes and being unable to check monthly statements fully for errors etc. The defaults reported only apply to the newer products we still have quite a bit of older products left too - they are aware of this since i accused them of misleading info but as yet nearly 5 weeks later nothing has yet to appear on headline defaults. I'm starting to think the same way. Whilst I've not been doing the level of analysis you do (there probably shouldn't be much need to with the limited investment choices we now have) I can see that you're raising some real problems. Having had a month where defaults were almost equal to interest (my earnings were negative at one point close to the end of the month). I emailed to see if they had any useful insights, particularly if any modelling they had suggested whether it might be a one off or might continue. The only response seemed to be that my current annual average is within the predicted range and that as I've had auto-invest turned off since November I should expect to have more defaults. They seemed to ignore the comments that I made about feeling I was overinvested (hence withdrawing repayments) and just continued to suggest that I should keep re-investing the capital and interest. They also ignored that I was asking about the number of defaults (not just the value) as the number was much higher than the average for the last few months based on the available data*. Overall it did feel like the person who responded to me should also take an investing test so they can understand the risks as well as some of us do. As a company it does feel like Zopa might be losing their way (or maybe it's just that their way has diverged from where it started and why we all invested). * Of course the available data probably doesn't give a true picture for comparison these days, but it's all they provide now.
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Post by moonraker on May 8, 2021 9:43:56 GMT
Various warnings in today's Daily Telegraph "Money" that an advertising ban could force some platformsto close, with investors having their money trapped for years. The Campaign for Fair Finance says that P2P needs further scrutiny: "Peer-to-Peer is the wild west. There have been too many crashes and too much money lost."
Just as I was wondering whether to dip my toe back into the water, following the demise of Ratesetter leaving me only investing in Zopa.
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aju
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Post by aju on May 8, 2021 15:03:16 GMT
Various warnings in today's Daily Telegraph "Money" that an advertising ban could force some platforms to close, with investors having their money trapped for years. The Campaign for Fair Finance says that P2P needs further scrutiny: "Peer-to-Peer is the wild west. There have been too many crashes and too much money lost."
Just as I was wondering whether to dip my toe back into the water, following the demise of Ratesetter leaving me only investing in Zopa.
I've read a few of the docs in the FCA website concerning this area of concern and it will be interesting to see what the final outcome might think of leading players like Zopa and more importantly where it finally places them in terms of risk levels one has to accept to even carry on lending with them. Whilst I have been in Zopa almost since the start, over the last few months i've become less and less comfortable over and above the effects of the last year or so. Whilst myself and Mrs Aju still have a fair amount locked in Zopa (I'm not prepared to pay anymore to have funds sold off as the earlier sales last year do eat into quite a bit of returns earnt so far) we are in the fortunate position of being able to weather the storm. We are running off rather than reinvesting at this point in time so thankfully we are no longer in the dangerous position of losing capital as the effect of defaults will rise as the funds are withdrawn. In reality though we have made very good returns in the past it's less clear that this will be maintained for us going forward. I have full access to the Telegraph on my PC using chrome but could i see the article above on the browser access, no!. Fortunately Mrs Aju has a Samsung tablet and the daily newspaper app version showed the article on page 206 of todays paper. (I did eventually figure out how to get the article on the chrome version by sending the app version url to myself as an email and using some slight changes to the url it was possible to read it on the chrome browser too. (not before searching high and low on the ordinary PC version of the telegraph). I think there is more work that the telegraph has to do for users the likes of me to carry on subscribing to their systems though especially as i like to read the conventional newspaper versions of their websites for a much easier scan reading.
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