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Post by Ace on Jul 26, 2023 19:55:13 GMT
I don't think they'll be bothered about some negative comments about minimum investment value. As soon as they were granted an institutional funding stream, the writing was on the wall for most of the retail investors who supported them while they became established. HNW can join the party, for now.... They havent got an institutional funding stream, they have a bank loan ... I take your point here which I think is probably correct, but this is what Kuflink said in their announcement email: So, it's a bit confusing.
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Post by frank121 on Jul 26, 2023 21:41:13 GMT
Such BS from Kuflink; why are your drip feeding these huge changes to your platform and claiming it's what the invetors want!
Personally I haven't seen any loan which has the quality for me to invest £500 in it. The auto invest product will diverisify but the rates are not much more (esp the 1 year) than you can obtain in a FSCS product.
I only joined a few months ago and I am slowly building my loans. I planned maybe 5K but with no loan amounts larger than £100 with many below £50 to diversify. I have been burned too many to many times before to start investing £500 pieces in select loans. The 1YR product will only offer a 1% premium over a FSCS protected fixed rate bond. The 2YR product at 8.32% is more appealing but both products have no sell out option in the secondary market which isn't ideal.
This is very dissapointing news for P2P; not sure what I will do going forward - this is actually more of headache than it's worth.
Lastly a big thank you to ace for his logical and very concise commentary.
Frank
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jnm21
Posts: 441
Likes: 166
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Post by jnm21 on Jul 26, 2023 22:08:59 GMT
A few comments that suggest folk forget that talking to customers as if they came down in the last shower is not new for them!
Has everyone forgot how they tried to tell us that reducing their 20% first in last out skin in the game investment to just 5% (possibly not even fixed) was to give us more opportunities to invest?
I seem to recall a post that was outrageous on this forum from the CEO.
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Post by Ace on Jul 26, 2023 22:11:48 GMT
Such BS from Kuflink; why are your drip feeding these huge changes to your platform and claiming it's what the invetors want!
Personally I haven't seen any loan which has the quality for me to invest £500 in it. The auto invest product will diverisify but the rates are not much more (esp the 1 year) than you can obtain in a FSCS product.
I only joined a few months ago and I am slowly building my loans. I planned maybe 5K but with no loan amounts larger than £100 with many below £50 to diversify. I have been burned too many to many times before to start investing £500 pieces in select loans. The 1YR product will only offer a 1% premium over a FSCS protected fixed rate bond. The 2YR product at 8.32% is more appealing but both products have no sell out option in the secondary market which isn't ideal.
This is very dissapointing news for P2P; not sure what I will do going forward - this is actually more of headache than it's worth.
Lastly a big thank you to ace for his logical and very concise commentary.
Frank
Thanks Frank. Incase you missed it, Kuflink's new 2 year rate isn't really 8.32% if your comparing it to FSCS products. The true AER equivalent for that account is 8%. See here: p2pindependentforum.com/post/478092/thread.
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Post by frank121 on Jul 27, 2023 0:03:49 GMT
Such BS from Kuflink; why are your drip feeding these huge changes to your platform and claiming it's what the invetors want!
Personally I haven't seen any loan which has the quality for me to invest £500 in it. The auto invest product will diverisify but the rates are not much more (esp the 1 year) than you can obtain in a FSCS product.
I only joined a few months ago and I am slowly building my loans. I planned maybe 5K but with no loan amounts larger than £100 with many below £50 to diversify. I have been burned too many to many times before to start investing £500 pieces in select loans. The 1YR product will only offer a 1% premium over a FSCS protected fixed rate bond. The 2YR product at 8.32% is more appealing but both products have no sell out option in the secondary market which isn't ideal.
This is very dissapointing news for P2P; not sure what I will do going forward - this is actually more of headache than it's worth.
Lastly a big thank you to ace for his logical and very concise commentary.
Frank
Thanks Frank. Incase you missed it, Kuflink's new 2 year rate isn't really 8.32% if your comparing it to FSCS products. The true AER equivalent for that account is 8%. See here: p2pindependentforum.com/post/478092/thread.
Very interesting Ace, and yes i did miss this. Having checked your last two post's it reminded me of someone pointing this out on one of Laurence’s financial things stream a few months back. (Perhaps it was you) Anyhow, I concluded that the asterix and claiming it was compounded rate i.e AER, but seems I was wrong to conclude this. (and surely what they wanted most people to conclude) If it's not AER, is this something that should be reported to the FCA or are their different rules for P2P products vs FSCS protected ones? Personally I always select the monthly interest option in the select loans, so i can re-invest elsewhere and re-diversify the risk. However Kuflink like to point out I am missing out on compounded rates, which is again false as if you were to re-invest manually then the return would be the same or similar. (depending on the rate you manually re-invest in) All of this stuff is very misleading and should be controlled by the FCA in my opinion; all rates should be comparable no matter what platform they are advertised on.
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Post by Ace on Jul 27, 2023 12:44:00 GMT
Thanks Frank. Incase you missed it, Kuflink's new 2 year rate isn't really 8.32% if your comparing it to FSCS products. The true AER equivalent for that account is 8%. See here: p2pindependentforum.com/post/478092/thread.
Very interesting Ace, and yes i did miss this. Having checked your last two post's it reminded me of someone pointing this out on one of Laurence’s financial things stream a few months back. (Perhaps it was you) Anyhow, I concluded that the asterix and claiming it was compounded rate i.e AER, but seems I was wrong to conclude this. (and surely what they wanted most people to conclude) If it's not AER, is this something that should be reported to the FCA or are their different rules for P2P products vs FSCS protected ones? Personally I always select the monthly interest option in the select loans, so i can re-invest elsewhere and re-diversify the risk. However Kuflink like to point out I am missing out on compounded rates, which is again false as if you were to re-invest manually then the return would be the same or similar. (depending on the rate you manually re-invest in) All of this stuff is very misleading and should be controlled by the FCA in my opinion; all rates should be comparable no matter what platform they are advertised on.
Exactly this. We absolutely should be able to assume that the FCA would ensure that this is the case. Shame on them that they do not. Yes, that was me on FT. Despite the seriousness of this issue, I seem to be ploughing a lone furrow. You are not alone in making the assumption that the asterisk and dagger next to the misleading rates are the usual explanations of AERs that you see on many FSCS sites. You are living proof that quoting those rates, with absolutely no mention of the real rates, is misleading. Again, you are not alone. Absolutely everyone I've discussed this with has made the same assumption. Nobody had clicked on the FAQ link by the dagger to find the explanation, and most who I directed to that explanation still incorrectly thought that the higher rate was the AER equivalent. There was a general perception that the regulator would never allow them to use the misleading rates as their most prominent figure. Presumably this is partly learned behaviour from FSCS accounts, where it seems to be true. Of course, they have every right to assume that the regulator would protect them from misleading rates. Unfortunately, that's not the case. I've come to the conclusion that the reason that no-one else is bothered about this issue is that: the majority don't understand it, those that do aren't troubled by it because they know how to calculate the true AERs for their own purposes. I care about it because I have a large number of people that are happy to invest in P2P, but rely on me to keep them informed of any issues that might affect them (because I'm obviously a P2P nerd). I have reported this issue to the platform, the FOS, and the FCA; all to no substantial effect so far. I first reported the issue to the platform. I had protracted discussions with them which eventually led to them putting that explanation of how they calculate the misleading rates in their FAQs. It also led to them stating the true AERs (which they chose to call the "Gross per annum" rate, in a further attempt to mislead by not clearly stating that it's the AER) below the misleading rates on the auto invest page. This was their attempt to appease me so that I would not refer the issue to the FOS and/or FCA. I couldn't agree that what they had done was sufficient to avoid misleading, and they weren't prepared to go further, so... I referred the issue to the FOS. To cut a long story short, the FOS weren't interested in my complaint because I had not invested at the misleading rates, and, therefore, had not suffered any loss. They were sympathetic, but could only suggest that I take the issue to the FCA. I got the impression that had I invested at the misleading rates then my complaint could have been investigated by the FOS on the bases that my returns would not have been as high as I would reasonably expected from the advertised rate at the time. I know a couple of investors who did invest at the misleading rates, and were misled by them, but they are not willing to go through the hassle of making an official complaint. So... I referred the issue to the FCA. Incidentally, I was unable to find a way to make this complaint, as none of the options available on the FCA website appeared to cover this situation (another major FCA failing IMO). I eventually resorted to calling them on a number that was supposed to be used for other purposes according to the description on the website. Fortunately, they were happy to transfer me to someone who was prepared to listen to my complaint. I felt that the agent fully understood the issue and was sympathetic to it, and he assured me that the issue would be investigated. However, he informed me that he would not be able to give me any details of the investigation, would not be able to give me any updates, and would not be able to inform me of any conclusions (another major FCA failing IMO). He said that I could call them periodically to ask if there had been any judgements against Kuflink, but would be unable to tell me whether any were related to my complaint, though that would presumably have been fairly obvious. I lost the will to follow it up further and resigned myself to watching Kuflink's advertising to see if they changed their ways. Needless to say, that hasn't happened. So, I don't know whether the investigation is ongoing or whether it concluded that there was no rule that was broken. Regardless of whether a specific rule was broken, I would have expected that it could have been covered by a general requirement to treat customers fairly. Part of my complaint was that, if they allowed this sharp practice, it could bring the whole industry into (further) disrepute. There would be nothing to stop the likes of Loanpad, for instance and no disrespect to them, from advertising their upcoming 6.2% as 8.6% with a dagger next to it explaining that was the "Gross annual equivalent interest rate if you remained invested for 10 years", which would be equally preposterous as Kuflink's stated rates. Fortunately, no-one else has resorted to this sharp practice to date, that I'm aware of, but it's only a matter of time unless the FCA do the decent thing and actually take reasonable steps to protect investors. It's such a pity that the FCA are so ineffective at protecting investors. It's no secret that I'm a big fan of P2P. I completely agree with 4thWay that P2P is a great middle ground between FSCS savings and S&S investments. It's much better suited to middle term investments (e.g. 1 to 9 years) than S&S. In fact its even proven to be more profitable that S&S global trackers for me over the past 5.5 years, so I'm now intending to use it for longer term investments as well. I believe that the worst of the fraudulent and incompetent platforms have already been wedded out, but we need an effective regulator to prevent future occurrences of these. Making a start by outlawing these misleading rates would be a great start, but there is also much more for them to do.
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ozboy
Member of DD Central
Mine's a Large One! (Snigger, snigger .......)
Posts: 3,156
Likes: 4,830
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Post by ozboy on Jul 27, 2023 13:02:11 GMT
"It's such a pity that the FCA are so ineffective at protecting investors"
More Grossly Incompetent, and Arrogant with it I would say.
MPs and The Teasury Committee MUST be educated about this, and we need to hammer it home to them. Constantly.
Or NOTHING will change.
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deltron
Member of DD Central
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Post by deltron on Jul 27, 2023 13:42:40 GMT
Would it be possible to take a £500 stake in a new loan and then sell, say, £400 of it on the SM after the first month in order to circumvent the new minimum investment rule?
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Post by Ace on Jul 27, 2023 14:02:40 GMT
Would it be possible to take a £500 stake in a new loan and then sell, say, £400 of it on the SM after the first month in order to circumvent the new minimum investment rule? You can only sell whole stakes currently. They have promised to update to be able to sell partial stakes in future, but I expect that they would now put a £500 minimum on that unless the size of your whole stake was smaller. No harm in asking them though.
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easynow
Member of DD Central
Popcorn anyone?
Posts: 178
Likes: 147
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Post by easynow on Jul 27, 2023 15:04:30 GMT
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Post by frank121 on Jul 27, 2023 21:41:23 GMT
Very interesting Ace, and yes i did miss this. Having checked your last two post's it reminded me of someone pointing this out on one of Laurence’s financial things stream a few months back. (Perhaps it was you) Anyhow, I concluded that the asterix and claiming it was compounded rate i.e AER, but seems I was wrong to conclude this. (and surely what they wanted most people to conclude) If it's not AER, is this something that should be reported to the FCA or are their different rules for P2P products vs FSCS protected ones? Personally I always select the monthly interest option in the select loans, so i can re-invest elsewhere and re-diversify the risk. However Kuflink like to point out I am missing out on compounded rates, which is again false as if you were to re-invest manually then the return would be the same or similar. (depending on the rate you manually re-invest in) All of this stuff is very misleading and should be controlled by the FCA in my opinion; all rates should be comparable no matter what platform they are advertised on.
Exactly this. We absolutely should be able to assume that the FCA would ensure that this is the case. Shame on them that they do not. Yes, that was me on FT. Despite the seriousness of this issue, I seem to be ploughing a lone furrow. You are not alone in making the assumption that the asterisk and dagger next to the misleading rates are the usual explanations of AERs that you see on many FSCS sites. You are living proof that quoting those rates, with absolutely no mention of the real rates, is misleading. Again, you are not alone. Absolutely everyone I've discussed this with has made the same assumption. Nobody had clicked on the FAQ link by the dagger to find the explanation, and most who I directed to that explanation still incorrectly thought that the higher rate was the AER equivalent. There was a general perception that the regulator would never allow them to use the misleading rates as their most prominent figure. Presumably this is partly learned behaviour from FSCS accounts, where it seems to be true. Of course, they have every right to assume that the regulator would protect them from misleading rates. Unfortunately, that's not the case. I've come to the conclusion that the reason that no-one else is bothered about this issue is that: the majority don't understand it, those that do aren't troubled by it because they know how to calculate the true AERs for their own purposes. I care about it because I have a large number of people that are happy to invest in P2P, but rely on me to keep them informed of any issues that might affect them (because I'm obviously a P2P nerd). I have reported this issue to the platform, the FOS, and the FCA; all to no substantial effect so far. I first reported the issue to the platform. I had protracted discussions with them which eventually led to them putting that explanation of how they calculate the misleading rates in their FAQs. It also led to them stating the true AERs (which they chose to call the "Gross per annum" rate, in a further attempt to mislead by not clearly stating that it's the AER) below the misleading rates on the auto invest page. This was their attempt to appease me so that I would not refer the issue to the FOS and/or FCA. I couldn't agree that what they had done was sufficient to avoid misleading, and they weren't prepared to go further, so... I referred the issue to the FOS. To cut a long story short, the FOS weren't interested in my complaint because I had not invested at the misleading rates, and, therefore, had not suffered any loss. They were sympathetic, but could only suggest that I take the issue to the FCA. I got the impression that had I invested at the misleading rates then my complaint could have been investigated by the FOS on the bases that my returns would not have been as high as I would reasonably expected from the advertised rate at the time. I know a couple of investors who did invest at the misleading rates, and were misled by them, but they are not willing to go through the hassle of making an official complaint. So... I referred the issue to the FCA. Incidentally, I was unable to find a way to make this complaint, as none of the options available on the FCA website appeared to cover this situation (another major FCA failing IMO). I eventually resorted to calling them on a number that was supposed to be used for other purposes according to the description on the website. Fortunately, they were happy to transfer me to someone who was prepared to listen to my complaint. I felt that the agent fully understood the issue and was sympathetic to it, and he assured me that the issue would be investigated. However, he informed me that he would not be able to give me any details of the investigation, would not be able to give me any updates, and would not be able to inform me of any conclusions (another major FCA failing IMO). He said that I could call them periodically to ask if there had been any judgements against Kuflink, but would be unable to tell me whether any were related to my complaint, though that would presumably have been fairly obvious. I lost the will to follow it up further and resigned myself to watching Kuflink's advertising to see if they changed their ways. Needles to say, that hasn't happened. So, I don't know whether the investigation is ongoing or whether it concluded that there was no rule that was broken. Regardless of whether a specific role was broken, I would have expected that it could have been covered by a general requirement to treat customers fairly. Part of my complaint was that, if they allowed this sharp practice, it could bring the whole industry into (further) disrepute. There would be nothing to stop the likes of Loanpad, for instance and no disrespect to them, from advertising their upcoming 6.2% as 8.6% with a dagger next to it explaining that was the "Gross annual equivalent interest rate if you remained invested for 10 years", which would be equally preposterous as Kuflink's stated rates. Fortunately, no-one else has resorted to this sharp practice to date, that I'm aware of, but it's only a matter of time unless the FCA do the decent thing and actually take reasonable steps to protect investors. It's such a pity that the FCA are so ineffective at protecting investors. It's no secret that I'm a big fan of P2P. I completely agree with 4thWay that P2P is a great middle ground between FSCS savings and S&S investments. It's much better suited to middle term investments (e.g. 1 to 9 years) than S&S. In fact its even proven to be more profitable that S&S global trackers for me over the past 5.5 years, so I'm now intending to use it for longer term investments as well. I believe that the worst of the fraudulent and incompetent platforms have already been wedded out, but we need an effective regulator to prevent future occurrences of these. Making a start by outlawing these misleading rates would be a great start, but there is also much more for them to do.
Thanks for taking the time to explain this in great detail Ace. I should have known better thinking that you wouldn't have reported it! Such a shame the FCA are not actively policing this. You are absolutely right, I just thought the figure shown was the AER but having just re-checked the FAQ see that they call it the "gross annual interest equivalent rate" - are they just making up new terminology as they see fit! When I check the FAQ link - i can see the table on how they calculate this so called GAIER but as far as I understand AER is actually calculated per year and not over the whole term hence the inaccurate percentage figure shown and implied as yearly. (which I think is the point you are making) You can only achieve that percentage if you stay invested until the term ends and that figure cannot be compared with other platforms who quote the AER. (this IMO makes a big mockery of the FCA if they don't enforce these rules for all - AER is AER and should be calculated and presented in the same way)
I am new to Kuflink but it's becoming clear to me that they are the masters of spin and sadly seem to lack transparency.
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Post by frank121 on Jul 27, 2023 22:01:24 GMT
Just another thought, will re-terms be treated as new investments and de-minimis holdings be divested? And on a similar note, will be be able to sell holdings under £500 on the secondary market, or are we effectively tied in to those deals until they mature?
Hi Firedog. Lisa from Kuflink confirmed with me today that the minimum amount will not apply on the secondary market for existing loan holdings; therefore you will be able sell smaller holdings before maturity. However this will be shortlived as the minimum will naturally rise to £500 once the older loans have been repaid. I have asked whenever there are plans to allow partial resale of loans in the secondary market below £500. If indeed there are, it would have been good to bundle all these changes into one email to soften the impact and the improve the bad taste I have about Kuflink right now! However I am not sure they will allow this; as ultimately you could invest £500 into a loan and then sell say £400 of it the following month leaving you with only £100 in the loan. This will no doubt go against what they are trying to achieve. (scaring away smaller retail investors lol)
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Post by df on Jul 27, 2023 23:57:26 GMT
And on a similar note, will be be able to sell holdings under £500 on the secondary market, or are we effectively tied in to those deals until they mature?
Hi Firedog. Lisa from Kuflink confirmed with me today that the minimum amount will not apply on the secondary market for existing loan holdings; therefore you will be able sell smaller holdings before maturity. However this will be shortlived as the minimum will naturally rise to £500 once the older loans have been repaid. I have asked whenever there are plans to allow partial resale of loans in the secondary market below £500. If indeed there are, it would have been good to bundle all these changes into one email to soften the impact and the improve the bad taste I have about Kuflink right now! However I am not sure they will allow this; as ultimately you could invest £500 into a loan and then sell say £400 of it the following month leaving you with only £100 in the loan. This will no doubt go against what they are trying to achieve. (scaring away smaller retail investors lol) That's what I thought will be the case, thank you for confirming. 3 new loans went live since the announcement and I've invested in all three as usual. I didn't get scared by the change, I'll carry on doing what I was doing before the change until Friday 18th August, have no intension rushing for the exit. One part of me is saying - you've been through bitter experiences with Lendy, Collateral, FS, MT, BondMason, ABL, AC etc. and should learn that whenever it start smelling bad you should make every effort to get out. I see this move to get rid of small investors as a potential damage to the business (assuming KUF is honest about their commitment to stay as p2p platform). AC used to assure their commitment to retail investors - it turned to be the opposite. Can't dismiss the fact that BM and FS upped their minimums prior to collapse. The other part is saying - don't compare Lendy with KUF. I had decent returns from a number of p2p platforms. Some are crystallised gains, some are still at the stage of ongoing repayments. CL, GS, LB, RS, FO and Z ended up profitable and some other platforms that are still in wind down mode will definitely end in profit. Time will show if my KUF exit strategy is right or wrong, it will be interesting to see the result.
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firedog
Member of DD Central
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Post by firedog on Jul 28, 2023 7:24:32 GMT
I suppose one tactic might be to buy small chunks of loans now while you can – I expect they'll be in some demand in the SM after the changes.
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Post by Ace on Jul 28, 2023 8:44:07 GMT
I suppose one tactic might be to buy small chunks of loans now while you can – I expect they'll be in some demand in the SM after the changes. Yes, it was clear that some decided to do that yesterday as the majority of smaller chunks got hoovered up. Lots available again today. Presumably from smaller investors who have decided to sell up. We'll probably see this ebb and flow for a few days.
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