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Post by Ton ⓉⓞⓃ on Nov 30, 2022 14:08:28 GMT
Also don't forget that AC introduced a fee, I guess to discourage Users from being in the queue for long periods etc when in Non-normal.
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Post by gobuchul on Nov 30, 2022 14:13:17 GMT
Question … and please don’t think I’m being smug. But why would anyone invest in AC when you’ve got Loanpad with and impeccable record offering a broadly similar product to the access accounts with a lower LTV with higher interest. If your after an individual loan again head over to SOMO - again never lost investors a penny and offer higher returns (7.2 - 10.2%), with LTVs ranging between 20-70% Is it that investors genuinely felt there was an advantage being invested in AC or is it ignorance of other alternatives ? For auto-invest AC has had better rates than Loanpad. This is changing and Loanpad will soon be better. I was in the process of starting to move over when they locked down. I think this shift if relative rates is what created the issue because I suspect I was not the only one.
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Post by Ace on Nov 30, 2022 14:13:27 GMT
Question … and please don’t think I’m being smug. But why would anyone invest in AC when you’ve got Loanpad with and impeccable record offering a broadly similar product to the access accounts with a lower LTV with higher interest. If your after an individual loan again head over to SOMO - again never lost investors a penny and offer higher returns (7.2 - 10.2%), with LTVs ranging between 20-70% Is it that investors genuinely felt there was an advantage being invested in AC or is it ignorance of other alternatives ? I agree that the Access Accounts currently offer poor value compared to alternatives. I've been exiting AC for some time now, but I'd be happy to invest at certain discounts. I saw 6% discounts offered last night. If you took AC at their word that they expect the lock-in to last about 1 year you could take that discount and treat it as a roughly 1 year bond paying around 10% (~6% discount + ~4% interest). Regardless of the many issues discussed above, many of which I agree with, even through the last lock-in if you sat it out you would have received all capital and interest. All of this assume that it's cash you don't need to get your hands on at any specific time, though even that is possible at a discount in an emergency. It's really just a question of what discount is required for me.
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Post by gobuchul on Nov 30, 2022 14:16:34 GMT
Also don't forget that AC introduced a fee, I guess to discourage Users from being in the queue for long periods etc when in Non-normal. It says " If you choose to create a withdrawal instruction, those funds will remain invested and earn interest at the advertised target rate of interest until a matching invest instruction is found." Says nothing about the fee. I wonder if it still applies.
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Post by davefoz on Nov 30, 2022 14:32:02 GMT
Question … and please don’t think I’m being smug. But why would anyone invest in AC when you’ve got Loanpad with and impeccable record offering a broadly similar product to the access accounts with a lower LTV with higher interest. If your after an individual loan again head over to SOMO - again never lost investors a penny and offer higher returns (7.2 - 10.2%), with LTVs ranging between 20-70% Is it that investors genuinely felt there was an advantage being invested in AC or is it ignorance of other alternatives ? I agree that the Access Accounts currently offer poor value compared to alternatives. I've been exiting AC for some time now, but I'd be happy to invest at certain discounts. I saw 6% discounts offered last night. If you took AC at their word that they expect the lock-in to last about 1 year you could take that discount and treat it as a roughly 1 year bond paying around 10% (~6% discount + ~4% interest). Regardless of the many issues discussed above, many of which I agree with, even through the last lock-in if you sat it out you would have received all capital and interest. All of this assume that it's cash you don't need to get your hands on at any specific time, though even that is possible at a discount in an emergency. It's really just a question of what discount is required for me. Fair call if you don’t need immediate access to capital. Just one word of caution. Fortunately I withdrew everything from Assetz when I could, that said I’ve still got about £7k ish trapped in GBBA 1 & 2. Despite the provision fund I will be lucky to see £500 of that, as AC are reluctant bite the bullet on defaults as regards liquidating assets, given they continue to get fees from loans in default; which they will prioritise over repayment of capital to investors when liquidators are finally called in. (Thieving Bar stewards!) I have no doubt the Access accounts will eventually go the same way, and eventually Assetz will call in the administrators. They got lucky with CBILS, post Covid, but that gravel train has left, and they unlikely to get any further capital investment as it only gets spunked on directors salaries. Good luck I hope everyone gets out unsaved.
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Post by scotty on Nov 30, 2022 15:13:56 GMT
Looks like you currently exit at under 3%.
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easynow
Member of DD Central
Popcorn anyone?
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Post by easynow on Nov 30, 2022 15:16:22 GMT
Also don't forget that AC introduced a fee, I guess to discourage Users from being in the queue for long periods etc when in Non-normal. Which portrays itself as an additional penalty. We have gone from a situation only 2 to 3 months ago where cash was sat in a queue at their (AC's) disposal earning 0% interest, to a situation where those wishing to withdraw have to accept a reduction in the value of their investment (offering a discount) in any hope of getting access to their money, and then being penalised further for any time it is sat in said queue. Provision funds have been plundered at the expense of current investors to fund repayments on other accounts where AC have accepted that they f**cked up. I wonder how it would stand with the FOS?
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Post by Ace on Nov 30, 2022 15:20:44 GMT
Question … and please don’t think I’m being smug. But why would anyone invest in AC when you’ve got Loanpad with and impeccable record offering a broadly similar product to the access accounts with a lower LTV with higher interest. If your after an individual loan again head over to SOMO - again never lost investors a penny and offer higher returns (7.2 - 10.2%), with LTVs ranging between 20-70% Is it that investors genuinely felt there was an advantage being invested in AC or is it ignorance of other alternatives ? I agree that the Access Accounts currently offer poor value compared to alternatives. I've been exiting AC for some time now, but I'd be happy to invest at certain discounts. I saw 6% discounts offered last night. If you took AC at their word that they expect the lock-in to last about 1 year you could take that discount and treat it as a roughly 1 year bond paying around 10% (~6% discount + ~4% interest). Regardless of the many issues discussed above, many of which I agree with, even through the last lock-in if you sat it out you would have received all capital and interest. All of this assume that it's cash you don't need to get your hands on at any specific time, though even that is possible at a discount in an emergency. It's really just a question of what discount is required for me. I just noticed that my offer to buy in at a 9.8% discount was satisfied last night. So I effectively now have a 1 year bond paying ~14% with a PF! EDIT: Actually is just over 15%. The 9.8% discount converts to a 10.86% instant profit ( 1/(1 - 0.098) = 1.1086... ), which then earns 3.9% over a year in the QA, so 1.1086 * 1.039 = 1.1518...%, I.e. a 15.1% profit over a year.
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Post by scotty on Nov 30, 2022 15:56:44 GMT
Exit down to 2%, erm.
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Post by nbk on Nov 30, 2022 16:57:00 GMT
I agree that the Access Accounts currently offer poor value compared to alternatives. I've been exiting AC for some time now, but I'd be happy to invest at certain discounts. I saw 6% discounts offered last night. If you took AC at their word that they expect the lock-in to last about 1 year you could take that discount and treat it as a roughly 1 year bond paying around 10% (~6% discount + ~4% interest). Regardless of the many issues discussed above, many of which I agree with, even through the last lock-in if you sat it out you would have received all capital and interest. All of this assume that it's cash you don't need to get your hands on at any specific time, though even that is possible at a discount in an emergency. It's really just a question of what discount is required for me. Fair call if you don’t need immediate access to capital. Just one word of caution. Fortunately I withdrew everything from Assetz when I could, that said I’ve still got about £7k ish trapped in GBBA 1 & 2. Despite the provision fund I will be lucky to see £500 of that, as AC are reluctant bite the bullet on defaults as regards liquidating assets, given they continue to get fees from loans in default; which they will prioritise over repayment of capital to investors when liquidators are finally called in. (Thieving Bar stewards!) I have no doubt the Access accounts will eventually go the same way, and eventually Assetz will call in the administrators. They got lucky with CBILS, post Covid, but that gravel train has left, and they unlikely to get any further capital investment as it only gets spunked on directors salaries. Good luck I hope everyone gets out unsaved. So, looks like Assetz are continuing to get investment from institutional investors. This note from Stuart Law yesterday on Seedrs:.. 'On Monday we signed another significant institutional investor that will further support our push into becoming the dominant funder for housebuilders in the U.K. There is presently no approved publicity on this investor but we expect to have some in due course.' Not sure they will be calling in the administrators anytime soon - which is a good thing.
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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
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Post by ilmoro on Nov 30, 2022 18:12:26 GMT
Also don't forget that AC introduced a fee, I guess to discourage Users from being in the queue for long periods etc when in Non-normal. Which portrays itself as an additional penalty. We have gone from a situation only 2 to 3 months ago where cash was sat in a queue at their (AC's) disposal earning 0% interest, to a situation where those wishing to withdraw have to accept a reduction in the value of their investment (offering a discount) in any hope of getting access to their money, and then being penalised further for any time it is sat in said queue. Provision funds have been plundered at the expense of current investors to fund repayments on other accounts where AC have accepted that they f**cked up. I wonder how it would stand with the FOS? Good question. The one published FOS verdict that partially went against AC in relation to the last lockin related to the fee but I suspect that the fact that it has been applicable for more than 18months probably covers them. The absence of any prominent mention of it might be considered unfair.
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Post by nooneere on Nov 30, 2022 19:05:08 GMT
This is really bad quite honestly. My AC account has been empty since Covid, but as a Loanpad fan I am worried about this new AC situation causing the FCA to re-activate its previous concerns about P2P quick-access accounts in general. AC could be muddying the water for everyone.
Surely a better commercial solution for AC would be to dilute their commitment to retail lenders, with a revolving credit facility from some institutional lender(s). Not a good time to arrange this due to high interest rates, of course; they should have acted sooner.
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alender
Member of DD Central
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Post by alender on Nov 30, 2022 20:08:39 GMT
The basic problem for these accounts is they get funds on a short term basis and lend them for much longer periods at a fixed rate. Fine if everything goes well and interest rates are not rising but flawed if a negative event occurs or interest rates rise.
This was essentially the Northern Rock model except this had less exposure to interest rates (we all know what happened to them) but these accounts are made worse by commitments to future tranches and there is a bit of a Ponzi scheme here in the sense that for one person to get out another has to invest as these are not time limited accounts so AC will carry on lending until they are out of money.
Given the history of this type of model including these accounts during lockdown I am surprised that the FCA allows these especially for retail investors, but then again the FCA seem incapable of policing Financial products, they allowed the LDIs (even when warned against then) which caused the recent crisis but they keen to stop private investors getting the same deals as instructions when there is money to be made. Still they help protect us by making us and tick boxes and passing silly tests.
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Post by nooneere on Nov 30, 2022 20:24:52 GMT
The basic problem for these accounts is they get funds on a short term basis and lend them for much longer periods at a fixed rate. Fine if everything goes well and interest rates are not rising but flawed if a negative event occurs or interest rates rise. This was essentially the Northern Rock model except this had less exposure to interest rates (we all know what happened to them) but these accounts are made worse by commitments to future tranches and there is a bit of a Ponzi scheme here in the sense that for one person to get out another has to invest as these are not time limited accounts so AC will carry on lending until they are out of money. Exactly right, but if AC had a backup source of capital (i.e. a revolving credit facility from a third party) that would be substituted for the retail lenders at times of need. That would require AC to obtain commercial credit for itself at a lower rate than it charges the borrowers (possibly this is a problem but I don't know). It must be possible because platforms like Landbay and Funding Circle followed this mixed model and eventually dropped retail lending completely. Anyway, you are right and the current AC model is obviously not working well.
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iano
Member of DD Central
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Post by iano on Nov 30, 2022 20:27:20 GMT
Folks, I think you're worrying over nothing! Just wait a few months for the cash levels to build up and they'll throw your money out of those accounts whether you requested it or not - just like last time.
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