alender
Member of DD Central
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Post by alender on Nov 30, 2022 22:37:48 GMT
Wow, not good news for AA investors, could be 1000 (or what ever it is) irate borrowers coming after you!
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Post by Ace on Nov 30, 2022 22:49:23 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." Yes, it's a coincidence. The same warning is appearing on all platforms. I believe its now an FCA requirement to do so. It started appearing on other sights a few weeks back, well before the AC lock-in. To apply the same warning to all platforms is ridiculous in my view. I think it's entirely sensible to have warnings specific to the actual investments, but this blanket warning is nonsense. In many cases its blatantly factually incorrect. Take point 2 " You are unlikely to get your money back quickly". This is not true for Loanpad. Since Loanpad's inception all withdrawal requests have been completed on the requested dates, even through Covid. It would be fair to say that you may not be able to get you cash back quickly, but it's not true to say that it's " unlikely". People will soon get used to seeing these blanket warnings and ignore them once they realise that they are not designed to give true risk advice on the actual investments present. Where are the equivalent statements for crypto and shares? I'm all for sensible correct warnings, but this is nonsense IMO.
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cb25
Posts: 3,520
Likes: 2,665
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Post by cb25 on Nov 30, 2022 22:57:25 GMT
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Post by Ace on Nov 30, 2022 23:10:04 GMT
Yes, that's the reason it's appearing everywhere. Must be displayed from tomorrow onwards. By the way, the link didn't work for me.
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Post by Harland Kearney on Nov 30, 2022 23:10:24 GMT
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." Yes, it's a coincidence. The same warning is appearing on all platforms. I believe its now an FCA requirement to do so. It started appearing on other sights a few weeks back, well before the AC lock-in. To apply the same warning to all platforms is ridiculous in my view. I think it's entirely sensible to have warnings specific to the actual investments, but this blanket warning is nonsense. In many cases its blatantly factually incorrect. Take point 2 " You are unlikely to get your money back quickly". This is not true for Loanpad. Since Loanpad's inception all withdrawal requests have been completed on the requested dates, even through Covid. It would be fair to say that you may not be able to get you cash back quickly, but it's not true to say that it's " unlikely". People will soon get used to seeing these blanket warnings and ignore them once they realise that they are not designed to give true risk advice on the actual investments present. Where are the equivalent statements for crypto and shares? I'm all for sensible correct warnings, but this is nonsense IMO. This is aimed to protect FCA from investors, not investors from the FCA!
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alender
Member of DD Central
Posts: 955
Likes: 645
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Post by alender on Nov 30, 2022 23:12:10 GMT
Yes, it's a coincidence. The same warning is appearing on all platforms. I believe its now an FCA requirement to do so. It started appearing on other sights a few weeks back, well before the AC lock-in. To apply the same warning to all platforms is ridiculous in my view. I think it's entirely sensible to have warnings specific to the actual investments, but this blanket warning is nonsense. In many cases its blatantly factually incorrect. Take point 2 " You are unlikely to get your money back quickly". This is not true for Loanpad. Since Loanpad's inception all withdrawal requests have been completed on the requested dates, even through Covid. It would be fair to say that you may not be able to get you cash back quickly, but it's not true to say that it's " unlikely". People will soon get used to seeing these blanket warnings and ignore them once they realise that they are not designed to give true risk advice on the actual investments present. Where are the equivalent statements for crypto and shares? I'm all for sensible correct warnings, but this is nonsense IMO. The FCA is a farce, it is made up of jobsworth box ticking people and are worse than useless costing us all money. They stop retail investors taking part in a placings because of the risks but allow them to buy the same shares in the market for a higher value. They do nothing to track down insider trading, regularly shares go up or down a lot for no apparently reason and a few days latter the news comes out which caused this, FCA do nothing. I have seen directors pump up the value of the company with things like good will on the books, directors get increased salary and bonuses, truth comes out, directors resign with huge pay outs, share holders shafted, FCA do nothing. Allow funds to lend investors shares for shorting, funds get the money, investors shafted as their share price drops, FCA do nothing.
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dermot
Member of DD Central
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Post by dermot on Dec 1, 2022 0:14:35 GMT
I've run down all my funds in AC apart from the quick access account, which I have set up to deliver monthly interest to my cash account.
It's not clear to me what happens to interest under the new regime, will it still be exported to cash account or locked up with capital?
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dermot
Member of DD Central
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Post by dermot on Dec 1, 2022 0:24:31 GMT
I've run down all my funds in AC apart from the quick access account, which I have set up to deliver monthly interest to my cash account. It's not clear to me what happens to interest under the new regime, will it still be exported to cash account or locked up with capital? Replying to myself: Interest appeared in my ISA cash account as normal, transferred to standard account and request to withdraw to bank has gone through as usual. Be interesting to see if it takes longer than usual to hit my bank.
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dermot
Member of DD Central
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Post by dermot on Dec 1, 2022 15:28:34 GMT
I've run down all my funds in AC apart from the quick access account, which I have set up to deliver monthly interest to my cash account. It's not clear to me what happens to interest under the new regime, will it still be exported to cash account or locked up with capital? Replying to myself: Interest appeared in my ISA cash account as normal, transferred to standard account and request to withdraw to bank has gone through as usual. Be interesting to see if it takes longer than usual to hit my bank. And talking to myself yet again, I made the request to withdraw a few minutes after midnight; cash was in my bank at 13.01 today, so not bad at all. By comparison, I made my monthly withdrawal of interest earned from UB at the same time and it was in my bank at 10:16 - so not unhappy with that.
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Post by Ton ⓉⓞⓃ on Dec 1, 2022 15:36:40 GMT
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.
I think you can do two different things (i.e. buying & selling) with ISA and non-ISA accounts
similarly
You can do different things between the QAA verses the 30DAA verses 90DAA
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mogish
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Post by mogish on Dec 1, 2022 16:08:12 GMT
I'm kidding myself im now £4.39 better off. Po@@ T@l$#& loan recovered , let's see if I can but a jar of coffee with it.
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benaj
Member of DD Central
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Post by benaj on Dec 1, 2022 16:14:55 GMT
May be all high risk investments are just a game from the FCA perspective. 👾 FCA just licenses the products like Sony and Nintendo, doesn’t protect customers. Has FCA demonstrated any successful exit with failed platform went down with administration? Unlike BBFC, which provides age rating for any movie shown on the market, FCA doesn’t give the risk rating for any product they license.
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m2btj
Member of DD Central
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Post by m2btj on Dec 1, 2022 16:28:01 GMT
May be all high risk investments are just a game from the FCA perspective. 👾 FCA just licenses the products like Sony and Nintendo, doesn’t protect customers. Has FCA demonstrated any successful exit with failed platform went down with administration? Unlike BBFC, which provides age rating for any movie shown on the market, FCA doesn’t give the risk rating for any product they license. And to think that the clown who presided over so many FCA failures, Andrew Bailey, is the head of the BoE!
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Post by nooneere on Dec 1, 2022 20:31:07 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. Which makes today's P2P Finance News article very interesting: p2pfinancenews.co.uk/2022/12/01/assetz-chief-institutions-will-drive-us-towards-2bn-of-lending/Stuart claims institutional investors will drive AC to their next £billion of lending, and that the AA have been "a very modest part of our overall funding sources for the last few years". He says, “We have already agreed successfully partnerships with institutions like Aros Kapital and Aeon Investments this year, and are continuing to see good demand from new institutional partners for our lending. We expect more announcements shortly and institutional partners will continue to play a key role in driving us towards our second billion of lending.” So presumably this last claim is not yet significant or certain enough to follow the route outlined in my post, or there is some contractual reason they can't just allow AA investors to withdraw and use these institutional funds to cover the existing loan commitments. Surely they could sort this out, or are they trying to soft close retail investment after all?
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Post by Ace on Dec 1, 2022 21:20:34 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. Which makes today's P2P Finance News article very interesting: p2pfinancenews.co.uk/2022/12/01/assetz-chief-institutions-will-drive-us-towards-2bn-of-lending/Stuart claims institutional investors will drive AC to their next £billion of lending, and that the AA have been "a very modest part of our overall funding sources for the last few years". He says, “We have already agreed successfully partnerships with institutions like Aros Kapital and Aeon Investments this year, and are continuing to see good demand from new institutional partners for our lending. We expect more announcements shortly and institutional partners will continue to play a key role in driving us towards our second billion of lending.” So presumably this last claim is not yet significant or certain enough to follow the route outlined in my post, or there is some contractual reason they can't just allow AA investors to withdraw and use these institutional funds to cover the existing loan commitments. Surely they could sort this out, or are they trying to soft close retail investment after all? Perhaps the institutions would be willing to lend on the higher paying AA loans but not the many lower paying ones. If AC allowed that there may not be sufficient income to fund the PFs. They're already poorly funded for the capital they need to protect.
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