rscal
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Post by rscal on Nov 30, 2022 20:50:09 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. Oh yes, they unilaterally paid out 10% or so in one go - without warning. So they come with a warning label of capriciousness.
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iano
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Post by iano on Nov 30, 2022 20:56:40 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. Oh yes, they unilaterally paid out 10% or so in one go - without warning. So they come with a warning label of capriciousness. I like to think of it as 'maintaining an air of excitement'!
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Post by Harland Kearney on Nov 30, 2022 21:34:26 GMT
I am surprised anybody still had money tied in these accounts. After the last COVID disaster I thought it would be obvious why so many lenders were bailing out at discounts back then. If I was still invested (which I'm not anymore since the first COVID lock in) I would bail at a discount. You maybe able to hold on, but I still have £12 in GBBA from 2018? Maybe dating before then. with the 0.0000012 pennies.
I see some of the same names complaining in COVID about AC actions, complaining again. Did you not sell out or are we waiting for more videos & Q&A's? Don't mean to be rude but the writing has been on the wall for years.
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Post by Harland Kearney on Nov 30, 2022 21:38:35 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. I think the stability of liquidity should be the focual point. Loanpad did not enter these conditions due to institutional relationships with investing partners. What good is any interest rate if you cannot access your money in the wild west of peer to peer. AC seem like the bad guy, but they have been more than clear about their intentions on how they will treat the retail clients remaining after the last debacle.
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Post by df on Nov 30, 2022 21:49:24 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. 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. I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year
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Post by gobuchul on Nov 30, 2022 21:52:42 GMT
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. I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year Interesting. I sold several thousand today at between 0.7 and 1.2% discount so 9.8% seems rather high. Someone was desperate to get out!
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alender
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Post by alender on Nov 30, 2022 21:53:35 GMT
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. The problem is that to get a backup source, like revolving credit you need an asset which is worth more than the amount borrowed to cover black swan events not just rising interest rates, the LTVs on these loans as stated before are meaningless. Look at fixed interest gilts effectively using LDIs 50% of the value of the gilts were granted as loans and it still managed to go wrong in a very short period. AC loans are in a sense like very poor quality fixed interest gilts, both GDP loans, both issued at par, both have interest paid during the period and both redeemed at par at the end of a fixed period, however AC loans are not traded on a market or have anything like the asset backup and can also drop interest rates when they feel like it. I for one would not buy AC loans at par, it would have to be a huge discount even if I was convinced no bad events were going to happen in the short to medium term. AC could put up the loans for say half their par value as security but this would exponentially increase lenders risk, also it is not in the T&Cs but AC will have no trouble changing these when they feel like it. It may be that the P2P sites that have revolving credit got this in better times when it was easier so had more foresight or they have more and better assets than AC or perhaps put themselves up as security. I was in Landbay and they stopped retail lending as it was too costly to meet the new FCA rules, this is when I transferred over to AC and Growth Street. Another great achievement for the FCA, however Growth Street turn out far better for me than AC. I am very surprised that the discounts are so low currently 0.99%, some people must be happy to lock in for a long period during which interest rates look set to rise at least for the first part in a falling economy, property prices are predicted to fall and the interest rate can be reduced at anytime as they did during last lock in. As stated there are better deals with other P2P companies and take a look at REITs with solid assets, higher yields most with rent contracts in place with stable companies for many years with a certain amount of index linking (usually there are some caps at approx. 5% but some with no caps). These REITs are trading with a high discount which IMO was caused by their forced sale by pension funds in trouble with LDIs, these discounts are a good cushion against falling property prices that they own. Also look at VPC Specialty Lending Investments, yield almost 10%, discount 18%, been going for 10 years with no problems or bad history unlike AC with it's failed accounts, no Hokey Cokey lock ins/outs. This is not advice just my opinion on some alternatives that I follow, so if interested DYOR. However no matter what I think of AC I hope all of those invested do not lose money.
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Post by Ace on Nov 30, 2022 22:09:00 GMT
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. I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year Hmm, yes I've left myself a bit of a problem there; investing during my measured rundown. Fortunately, the only loans left in my account before this were in the MLA, I exited the Access Accounts a long time ago. I'll try and keep the rundown figures seperate from the new investment to keep a true record of how the rundown goes.
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alender
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Post by alender on Nov 30, 2022 22:14:53 GMT
I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year Hmm, yes I've left myself a bit of a problem there; investing during my measured rundown. Fortunately, the only loans left in my account before this were in the MLA, I exited the Access Accounts a long time ago. I'll try and keep the rundown figures seperate from the new investment to keep a true record of how the rundown goes. Why not consider selling out now, no ones goes hungry by taking a profit.
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Post by df on Nov 30, 2022 22:17:06 GMT
I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year Interesting. I sold several thousand today at between 0.7 and 1.2% discount so 9.8% seems rather high. Someone was desperate to get out! I had a go at it couple of hours ago and sold something at -1.99%. I'm not desperate, just wanted to try this game IIRC at the start of covid crisis there were several -25% offers and quite a few at very generous discounts.
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Post by nooneere on Nov 30, 2022 22:18:54 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. May be coincidence, but the Loanpad website has just inserted the following warning popup (all below is quotation): "Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be high risk. What are the key risks? 1. You could lose the money you invest # Many peer-to-peer (P2P) loans are made to borrowers who can’t borrow money from traditional lenders such as banks. These borrowers have a higher risk of not paying you back. # Advertised rates of return aren’t guaranteed. If a borrower doesn’t pay you back as agreed, you could earn less money than expected. A higher advertised rate of return means a higher risk of losing your money. # These investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money. It only means that any potential gains from your investment will be tax free. 2. You are unlikely to get your money back quickly # Some P2P loans last for several years. You should be prepared to wait for your money to be returned even if the borrower repays on time. # Some platforms may give you the opportunity to sell your investment early through a ‘secondary market’, but there is no guarantee you will be able to find someone willing to buy. # Even if your agreement is advertised as affording early access to your money, you will only get your money early if there is sufficient money available not invested in loans. If there is insufficient money available not invested in loans, it could take longer to get your money back. 3. Don’t put all your eggs in one basket # Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. # A good rule of thumb is not to invest more than 10% of your money in high-risk investments. 4. The P2P platform could fail # If the platform fails, it may be impossible for you to collect money on your loan. It could take years to get your money back, or you may not get it back at all. Even if the platform has plans in place to prevent this, they may not work in a disorderly failure. 5. You are unlikely to be protected if something goes wrong # The Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover investments in P2P loans. You may be able to claim if you received regulated advice to invest in P2P, and the adviser has since failed. Try the FSCS investment protection checker here. # Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here. 6. More general economic risks # Your investment may be affected by various factors beyond the platform’s control, including (but not limited to): # Changes in general economic, political or local conditions # Changes in the supply of or demand for property # Changes in interest rates # The financial condition of borrowers and of tenants, buyers and sellers of property # Changes in property or corporate tax rates and other operating expenses # Global pandemics # Acts of terrorism # Natural disasters If you are interested in learning more about how to protect yourself, visit the FCA’s website. For further information about peer-to-peer lending (loan-based crowdfunding), visit the FCA’s website."
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Post by Ace on Nov 30, 2022 22:24:17 GMT
I think that a brilliant move (i.e. get it from the beginning of the panic). You probably won't get the same offer again as this normally gets settled pretty quickly. 15.1% is worth what's on the plate (the risk of loss in this case is quite low, I think). I'm looking forward to see your update on p2pindependentforum.com/thread/19452/account-rundown-example-ac?page=2 at this time next year Interesting. I sold several thousand today at between 0.7 and 1.2% discount so 9.8% seems rather high. Someone was desperate to get out! My assumption is that it was someone with a large holding that wanted out. They probably got the majority out at a very low discount but the total on offer at low discounts wasn't enough to satisfy their request, so they accepted a small fraction at a higher discount. They probably aren't aware of the underlying discounts. I think they would just be presented with a single average discount figure. As a simple example, if there were £10k of bids; £9,900 at 1%, and £100 at 10%, the seller would be presented with you can currently sell £10k at a 1.09% discount. If the seller wanted to sell £10k or more they might well be happy to sell £10k worth at 1.09% discount without being aware of the underlying offers. I'm not really sure if this is exactly how it works, but it seems to me that it would work something like that, so I though I'd have a punt.
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Post by nooneere on Nov 30, 2022 22:25:01 GMT
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Post by Ace on Nov 30, 2022 22:29:59 GMT
Hmm, yes I've left myself a bit of a problem there; investing during my measured rundown. Fortunately, the only loans left in my account before this were in the MLA, I exited the Access Accounts a long time ago. I'll try and keep the rundown figures seperate from the new investment to keep a true record of how the rundown goes. Why not consider selling out now, no ones goes hungry by taking a profit. I may well do that in time, just as I did during the last lock-in. I currently have other bids in place at various discount rates. It's not possible to be a buyer and a seller at the same time, so I can't currently sell, which I think is reasonable.
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blender
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Post by blender on Nov 30, 2022 22:34:05 GMT
The problem with AC is that non-normal market conditions have become the normal condition of AC.
Situation Normal, Assetz Fouled Up.
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