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Post by westonkevRS on Dec 17, 2013 8:05:34 GMT
Sorry of this sounds a bit like Marketing, but the RateSetter 1-yr bond is now at 3.7%.
I know it hasn't brought the excitement of potential 99% returns.... But still is market beating and near matches competitor 3-yr offerings.
I think this is available because we do have exceptional demand on this 1-yr product on the borrowing side, e.g. giffgaff and other initiatives. Potentially this is causing a distortion that our lenders can take advantage of....
....I'm filling my boots as a P2P Lender irrespective of my professional position.
What do the noticeboarders think? Why wouldn't lenders take advantage, and I ask that in the spirit of getting some feedback or constructive criticism?
Kevin.
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Post by davee39 on Dec 19, 2013 17:55:44 GMT
Monthly Income. I like to see 3 & 5 year payments coming in regularly, and a 3 year bond is 50% repaid in 18 months.
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mikes1531
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Post by mikes1531 on Dec 19, 2013 21:01:48 GMT
Why wouldn't lenders take advantage, and I ask that in the spirit of getting some feedback or constructive criticism? How about because competition from other P2P platforms is getting rather stiff these days? For example, 12% on 6-month (or less) money from SS, or 5.5% on 18-month money from Wellesley. (From RS's point of view, I don't think SS is much of a worry because they have only £100k of capacity at the moment.)
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mikes1531
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Post by mikes1531 on Dec 22, 2013 1:58:35 GMT
Sorry of this sounds a bit like Marketing, but the RateSetter 1-yr bond is now at 3.7%. Having been to the RS website to look at the above and other opportunities, I find that Google is targeting me for RS adverts. (That's not a complaint, it's just an observation. It shows that Google's system works, and I'd much rather see relevant adverts than irrelevant ones.) I do find the adverts slightly puzzling, though. The line at the top says "Earn up to 6.0% on your Savings", but the individual rates shown are 3.4% for 1-year, 4.1% for 3-year, and 5.6% 5-year. I presume the rate on the 1-year option has come down from the 3.7% noted above from a few days ago, but I've not heard anyone recently saying that 6.0% was available at RS -- presumably that's for the 5-year option. Is there an option that pays a higher return than the 5-year option? If not, when was the last time that 6.0% actually was available for the 5-year option?
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Post by westonkevRS on Dec 22, 2013 10:45:25 GMT
Mike,
I'm no expert on cookie tracking or banner ads, but my understanding is that the advertising controlling banner adds needs to choose what it thinks will be the most effective advert for each web site visitor. So every viewer of a web page with banner adds gets a different advert. As you had presumably visited the RateSetter web site previously, the banner decided you would benefit most from a reminder.....
.... The issue is that the banners are not clever enough to know the current market rates. So the old marketing "up to" phrase is used, and is true. In the past few months the 5-returns have hit 5.9% market rate and some lucky (or adventurous) ratesetters would have got a higher rate.
To clarify, at the moment we just have the four markets. And these are the same for new and existing customers. There isn't a secret 6% return.... Other than those that time and rateset the 5-yr money....
Happy festivities,
Kevin.
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mikes1531
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Post by mikes1531 on Dec 22, 2013 16:49:38 GMT
The issue is that the banners are not clever enough to know the current market rates. So the old marketing "up to" phrase is used, and is true. In the past few months the 5-returns have hit 5.9% market rate and some lucky (or adventurous) ratesetters would have got a higher rate. Thanks for your reply. In general, the adverts I'm being presented with do seem to be quite up to date, showing rates for the 1-, 3-, & 5-year markets (currently 3.4%, 4.1% & 5.6%) that I believe have changed since I first started seeing those adverts a few days ago. Perhaps I'm misremembering things, but you might bring this thread to the attention of the people who designed the adverts. If the individual market rates shown in the adverts indeed are being updated reasonably frequently, then perhaps the "up to" line at the top of the advert also should be updated at the same time so as to present a consistent story to the reader. Anyone who sees "up to 6.0%" and clicks on the advert only to find that 6.0% isn't in fact available is unlikely to be pleased, and might feel that they've been misled. That won't do RS's reputation any good at all.
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bugs4me
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Post by bugs4me on Dec 22, 2013 17:45:18 GMT
The issue is that the banners are not clever enough to know the current market rates. So the old marketing "up to" phrase is used, and is true. In the past few months the 5-returns have hit 5.9% market rate and some lucky (or adventurous) ratesetters would have got a higher rate. Thanks for your reply. In general, the adverts I'm being presented with do seem to be quite up to date, showing rates for the 1-, 3-, & 5-year markets (currently 3.4%, 4.1% & 5.6%) that I believe have changed since I first started seeing those adverts a few days ago. Perhaps I'm misremembering things, but you might bring this thread to the attention of the people who designed the adverts. If the individual market rates shown in the adverts indeed are being updated reasonably frequently, then perhaps the "up to" line at the top of the advert also should be updated at the same time so as to present a consistent story to the reader. Anyone who sees "up to 6.0%" and clicks on the advert only to find that 6.0% isn't in fact available is unlikely to be pleased, and might feel that they've been misled. That won't do RS's reputation any good at all. I've never been particularly impressed with the accuracy of Google tracking, or any of the search engines come to think of it. Some of the ads are of some relevance and others just way off the mark. Click on the odd one here and there and you may get taken to the advertised site or get a 404 error where the site is dead. Takes Google a while to notice they're not going to get paid their pennies due per click as the site is no longer functioning. But that's what happens when your tracker is reliant upon relevant words and/or phrases. Also of course it tracks your IP address unless you're hiding behind a proxy - you can get adverts from just about anywhere.
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mikes1531
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Post by mikes1531 on Dec 23, 2013 16:43:02 GMT
The issue is that the banners are not clever enough to know the current market rates. So the old marketing "up to" phrase is used, and is true. In the past few months the 5-returns have hit 5.9% market rate and some lucky (or adventurous) ratesetters would have got a higher rate. Thanks for your reply. In general, the adverts I'm being presented with do seem to be quite up to date, showing rates for the 1-, 3-, & 5-year markets (currently 3.4%, 4.1% & 5.6%) that I believe have changed since I first started seeing those adverts a few days ago. Perhaps I'm misremembering things, but you might bring this thread to the attention of the people who designed the adverts. If the individual market rates shown in the adverts indeed are being updated reasonably frequently, then perhaps the "up to" line at the top of the advert also should be updated at the same time so as to present a consistent story to the reader. Anyone who sees "up to 6.0%" and clicks on the advert only to find that 6.0% isn't in fact available is unlikely to be pleased, and might feel that they've been misled. That won't do RS's reputation any good at all. Having been presented with the adverts again today, I can confirm that the specific term rates do change -- the one I saw a few minutes ago showed rates for the 1-, 3-, & 5-year markets of 3.3%, 4.0% & 5.5%, respectively -- while the 'up to' rate is stuck at 6.0%.
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Post by westonkevRS on Dec 23, 2013 22:21:43 GMT
Mike,
I wasn't personally that worried about the "up to" marketing speal, but actually after discussing in the office you are right. Better to under promise and over deliver than advertise 6% and disappoint with 5.5%. That isn't the RateSetter way.
So we're going to change the banner rates as you've said they should, but this might take a few days (or more with Xmas holidays). And actually were moving away from these adverts and banner types.
Although it did raise an interesting philosophical question. Although our lenders might want 6% do we? This could be considered an undeserved "Risk Premium" that our lenders demand from us rather than the safer and far lower returns from "safe" banks. I think this required risk premium is underserved, and although we're unlikely to ever get away with instant access at 0.1% or 1% bonds, 6% is not fair. Is RateSetter really that risky as an investment lender proposition. I don't think so, although I'm obviously biased. As we mature (e.g. FCA regulation, larger provision fund), it will be interesting to see if this premium reduces.... So enjoy the high whilst you can.... Or perhaps the banks will be required to raise their rates...
Kevin.
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mikes1531
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Post by mikes1531 on Dec 23, 2013 22:53:25 GMT
Better to under promise and over deliver than advertise 6% and disappoint with 5.5%. That isn't the RateSetter way. So we're going to change the banner rates... I think that's a good move. Although it did raise an interesting philosophical question. Although our lenders might want 6% do we? This could be considered an undeserved "Risk Premium" that our lenders demand from us rather than the safer and far lower returns from "safe" banks. I think this required risk premium is underserved, and although we're unlikely to ever get away with instant access at 0.1% or 1% bonds, 6% is not fair. Is RateSetter really that risky as an investment lender proposition. I don't think so, although I'm obviously biased. As we mature (e.g. FCA regulation, larger provision fund), it will be interesting to see if this premium reduces.... So enjoy the high whilst you can.... Or perhaps the banks will be required to raise their rates... Interesting point. But at the moment you're dealing with a free market, and rates are being set by supply and demand. And it's best to leave it that way. When lenders decide that the rates on offer are good and bring in more funds, the competition will bring rates down, and the lower rates will bring in more borrowers, which will be good for RS. What you don't want to do is follow Zopa's example and abandon the free market by dictating lender's returns and putting them in a 'take it or leave it' situation. As a long-time watcher/contributor on Zopa's forum (and Zopa lender), it looks like a lot of their long-time supporters are choosing the 'leave it' option, and it appears that the resulting lack of funds on offer is restricting the lending they can do.
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bugs4me
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Post by bugs4me on Dec 24, 2013 9:30:04 GMT
Better to under promise and over deliver than advertise 6% and disappoint with 5.5%. That isn't the RateSetter way. So we're going to change the banner rates... I think that's a good move. Although it did raise an interesting philosophical question. Although our lenders might want 6% do we? This could be considered an undeserved "Risk Premium" that our lenders demand from us rather than the safer and far lower returns from "safe" banks. I think this required risk premium is underserved, and although we're unlikely to ever get away with instant access at 0.1% or 1% bonds, 6% is not fair. Is RateSetter really that risky as an investment lender proposition. I don't think so, although I'm obviously biased. As we mature (e.g. FCA regulation, larger provision fund), it will be interesting to see if this premium reduces.... So enjoy the high whilst you can.... Or perhaps the banks will be required to raise their rates... Interesting point. But at the moment you're dealing with a free market, and rates are being set by supply and demand. And it's best to leave it that way. When lenders decide that the rates on offer are good and bring in more funds, the competition will bring rates down, and the lower rates will bring in more borrowers, which will be good for RS. What you don't want to do is follow Zopa's example and abandon the free market by dictating lender's returns and putting them in a 'take it or leave it' situation. As a long-time watcher/contributor on Zopa's forum (and Zopa lender), it looks like a lot of their long-time supporters are choosing the 'leave it' option, and it appears that the resulting lack of funds on offer is restricting the lending they can do. I've got funds sitting at RS waiting to find a home but at least I can set the rate. I could get them loaned out today but it's my choice not to lower the return. Unfortunately on the other platform that choice has effectively been removed and I feel they are geared more for the passive lender although the odd one may be in for a shock when they eventually check how things are going. So the supply and demand principle always seems to work. There's no point in chasing headline grabbing lowest borrower rates as this impacts on the lenders as the only way to achieve this is to remove their choice IMO.
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Post by westonkevRS on Dec 24, 2013 9:57:58 GMT
Please don't misunderstand my "rate premium" post. I don't think we'd ever lose the market and set your rate philosophy.
What I mean is that currently the free market rate and our lender ratesetters are demanding a premium to give us their money. our returns are higher than banks and Zopa. And maybe rightly so, as the P2P industry is not fully tested or mature and is currently unregulated by the FCA.
But will our market rates and the lender requirements drop as the risk premium disappears over time? In time well be seen as the safest P2P lebeer and lenders won't demand such a risk premium over the banks. Lenders will rateset a market requirement differential lower than the gap today. I think it will, and that is market forces not any thing RateSetter will do other than continued demonstration of strength, honesty, transparency and fair returns.
Kevin.
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bugs4me
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Post by bugs4me on Dec 24, 2013 10:45:15 GMT
Please don't misunderstand my "rate premium" post. I don't think we'd ever lose the market and set your rate philosophy. What I mean is that currently the free market rate and our lender ratesetters are demanding a premium to give us their money. our returns are higher than banks and Zopa. And maybe rightly so, as the P2P industry is not fully tested or mature and is currently unregulated by the FCA. But will our market rates and the lender requirements drop as the risk premium disappears over time? In time well be seen as the safest P2P lebeer and lenders won't demand such a risk premium over the banks. Lenders will rateset a market requirement differential lower than the gap today. I think it will, and that is market forces not any thing RateSetter will do other than continued demonstration of strength, honesty, transparency and fair returns. Kevin. This is and can only be crystal ball glazing stuff Kevin - who knows what will happen in 2014. There are so many factors which come into play. IMO the most important thing is to just keep things simple. One of the problems which has 'blackened' the traditional saving institutions is they complicate matters. I had a relatively high earning bond which matured a few months back. Yes, there was a new bond albeit at a slightly lower rate of interest. Fine, just roll the maturing bond into the new one. "Can't do that" was the reply. You have to transfer the maturing bond into a current account then effectively apply again to join the new bond. The other alternative was to leave things as they were and conveniently the original high earning teaser rate bond dropped to a 0.1% return. Why keep things simple when you can deliberately complicate them? 
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mikes1531
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Post by mikes1531 on Dec 24, 2013 12:01:09 GMT
You have to transfer the maturing bond into a current account then effectively apply again to join the new bond. Why keep things simple when you can deliberately complicate them? Actually, this is an improvement over the common practice of a few years ago -- hopefully less common now -- whereby those new bonds were available only for 'new' money -- you couldn't invest funds that already were within the institution. So you had to transfer the money out to an external account and then transfer it back in again.  I wonder whether that practice has faded away because of the bad press it got? Or was its demise the result of the introduction of the Faster Payment system, which means funds can be moved out and back in a matter of minutes rather than the week it used to take when the only free option was BACS?
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bugs4me
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Post by bugs4me on Dec 24, 2013 12:07:34 GMT
You have to transfer the maturing bond into a current account then effectively apply again to join the new bond. Why keep things simple when you can deliberately complicate them? Actually, this is an improvement over the common practice of a few years ago -- hopefully less common now -- whereby those new bonds were available only for 'new' money -- you couldn't invest funds that already were within the institution. So you had to transfer the money out to an external account and then transfer it back in again. I wonder whether that practice has faded away because of the bad press it got? Or was its demise the result of the introduction of the Faster Payment system, which means funds can be moved out and back in a matter of minutes rather than the week it used to take when the only free option was BACS? An improvement Mike!!! - my goodness what I was being asked to do was so ridiculous that you really couldn't have made it up. Maybe the paper exercise was a way of them treating the money as being new. Totally balmy. I bailed out anyway.
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