pikestaff
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Post by pikestaff on Sept 21, 2015 7:36:56 GMT
gnasher It would have taken about 1 second longer to send the money via the MLIA, but never mind! I don't know how long the queue is, but there will be a bit of churn this week as there are 2 small loans (total £333.75k) due to draw with underwriting called. It might pay you to move some cash out of the QAA now. Having said that, if you've put in more than about 2x your average loan size, and you have cash elsewhere that you could move to the MLIA when needed, it may never pay you. That's just an aspect of the poor product design. I think the cap should have been set on a per lender basis with a cap and floor, along the lines of: 3 x lender's average loan size, subject to minimum: £1,000 maximum: £10,000 Those might not be quite the right parameters but it would have ensured the QAA did its intended job.
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bigfoot12
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Post by bigfoot12 on Sept 21, 2015 8:05:10 GMT
gnasher It would have taken about 1 second longer to send the money via the MLIA, but never mind! I don't know how long the queue is, but there will be a bit of churn this week as there are 2 small loans (total £333.75k) due to draw with underwriting called. It might pay you to move some cash out of the QAA now. Having said that, if you've put in more than about 2x your average loan size, and you have cash elsewhere that you could move to the MLIA when needed, it may never pay you. That's just an aspect of the poor product design. I think the cap should have been set on a per lender basis with a cap and floor, along the lines of: 3 x lender's average loan size, subject to minimum: £1,000 maximum: £10,000 Those might not be quite the right parameters but it would have ensured the QAA did its intended job. I think it is just one of those things about getting to know a system. Have you tried to move £5? It seems to me that having a queue of money waiting to enter is part of the liquidity strategy.
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Post by chris on Sept 21, 2015 9:09:14 GMT
gnasher It would have taken about 1 second longer to send the money via the MLIA, but never mind! I don't know how long the queue is, but there will be a bit of churn this week as there are 2 small loans (total £333.75k) due to draw with underwriting called. It might pay you to move some cash out of the QAA now. Having said that, if you've put in more than about 2x your average loan size, and you have cash elsewhere that you could move to the MLIA when needed, it may never pay you. That's just an aspect of the poor product design. I think the cap should have been set on a per lender basis with a cap and floor, along the lines of: 3 x lender's average loan size, subject to minimum: £1,000 maximum: £10,000 Those might not be quite the right parameters but it would have ensured the QAA did its intended job. Who says the QAA is not doing the job it's intended to do? We'll be making some changes this week to aid with the churn but I fundamentally do not understand all these random cap formulas being bandied around. They all seem to bias the cap towards those with deeper pockets and larger investments which would make the problem worse not better, and your suggested formula (if I understand it correctly) penalises well diversified portfolios for some reason. The cap as implemented is designed to prevent any one lender creating a liquidity crisis by pulling out a large percentage of the invested funds in one go. There will always be some clumping of withdrawals around events on the platform, such as loan drawdown, and there are strategies in place to cope with those but the cap is there to stop one investor making up too large a percentage of the overall pot. That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be.
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Post by chris on Sept 21, 2015 9:11:29 GMT
It seems to me that having a queue of money waiting to enter is part of the liquidity strategy. It is part of the strategy and is one of the ways we guard against large withdrawals around loan drawdowns, underwriter funds being called, etc.
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bigfoot12
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Post by bigfoot12 on Sept 21, 2015 9:25:12 GMT
That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. How about a 30 day notice account? Perhaps paying 4.5%. Investors have to give 30 days notice to get their money back. If there is a queue waiting to enter the withdrawer gets the option of having their money straight away. If there are more people wanting to exit than the fund can liquidate in time, everyone is pro rated back, until withdrawal can be made. Then drop the rate on the QAA to 3%
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Post by chris on Sept 21, 2015 9:29:40 GMT
That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. How about a 30 day notice account? Perhaps paying 4.5%. Investors have to give 30 days notice to get their money back. If there is a queue waiting to enter the withdrawer gets the option of having their money straight away. If there are more people wanting to exit than the fund can liquidate in time, everyone is pro rated back, until withdrawal can be made. Then drop the rate on the QAA to 3% It's one of the options we're considering. We have a short term solution to help but may yet split the account. One of the things to remember is that the direct investors and swept investors have different withdrawal patterns which is desirable to prevent sudden surges in withdrawals. So I'm keen to keep a blend but perhaps offload some of the excess demand into another account.
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Post by Deleted on Sept 21, 2015 9:45:21 GMT
Afer reading everyone's feedback over the last 24 hours, thanks to everyone BTW, "me thinks" that AC are developing all kinds of IT solutions to a basic problem that... the loans are not coming through at a consistent rate and the draw down dates keep moving out.... if the effort that is going into providing these recent changes went into solving the basic problem..... That is not to say that I do not appreciate Chris's efforts but AC do seem to be fixing the wrong problem. While it lets the lenders dance around an ever reducing pool of attractive available loans there needs to be a real focus on the core problem. Still, I don't suppose FC's move to banded loans is helping AC's commercial borrowers proposition. Any news on invoice factoring for example? Is HSBC offering up a nice steady stream of rejected loans? How is institutional lending working out for you? I just feel AC board meetings must be an interesting place at the moment, I wish AC loads of luck in finding the right path forward.  |
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pikestaff
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Post by pikestaff on Sept 21, 2015 11:12:07 GMT
...I think the cap should have been set on a per lender basis with a cap and floor, along the lines of: 3 x lender's average loan size, subject to minimum: £1,000 maximum: £10,000 Those might not be quite the right parameters but it would have ensured the QAA did its intended job. Who says the QAA is not doing the job it's intended to do? We'll be making some changes this week to aid with the churn but I fundamentally do not understand all these random cap formulas being bandied around. They all seem to bias the cap towards those with deeper pockets and larger investments which would make the problem worse not better, and your suggested formula (if I understand it correctly) penalises well diversified portfolios for some reason. The cap as implemented is designed to prevent any one lender creating a liquidity crisis by pulling out a large percentage of the invested funds in one go. There will always be some clumping of withdrawals around events on the platform, such as loan drawdown, and there are strategies in place to cope with those but the cap is there to stop one investor making up too large a percentage of the overall pot. That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. The assumption behind my proposal was that the intended job is to provide some kind of reward/return on funds awaiting investment. My idea was that each lender would have a personal cap broadly proportionate to what they might wish/need to hold on the platform for that purpose. I don't see that as penalising anybody. It's apparent that my assumption was wrong and that you want the account to hold a substantial proportion of direct funds. So be it.
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Post by chris on Sept 21, 2015 11:15:53 GMT
Afer reading everyone's feedback over the last 24 hours, thanks to everyone BTW, "me thinks" that AC are developing all kinds of IT solutions to a basic problem that... the loans are not coming through at a consistent rate and the draw down dates keep moving out.... if the effort that is going into providing these recent changes went into solving the basic problem..... That is not to say that I do not appreciate Chris's efforts but AC do seem to be fixing the wrong problem. While it lets the lenders dance around an ever reducing pool of attractive available loans there needs to be a real focus on the core problem. Still, I don't suppose FC's move to banded loans is helping AC's commercial borrowers proposition. Any news on invoice factoring for example? Is HSBC offering up a nice steady stream of rejected loans? How is institutional lending working out for you? I just feel AC board meetings must be an interesting place at the moment, I wish AC loads of luck in finding the right path forward. I appreciate how it can seem that the QAA and other changes are window dressing, but whilst they are aimed at helping lenders they're also addressing problems that affect borrowers and borrower origination. I really don't want to give away too much to the competition but the accounts are part of a bigger jigsaw puzzle aimed at increasing origination. IT aren't holding back any part of the origination side of the business so it's not a case of resources being used in this way hindering the business elsewhere.
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Post by chris on Sept 21, 2015 11:19:59 GMT
Who says the QAA is not doing the job it's intended to do? We'll be making some changes this week to aid with the churn but I fundamentally do not understand all these random cap formulas being bandied around. They all seem to bias the cap towards those with deeper pockets and larger investments which would make the problem worse not better, and your suggested formula (if I understand it correctly) penalises well diversified portfolios for some reason. The cap as implemented is designed to prevent any one lender creating a liquidity crisis by pulling out a large percentage of the invested funds in one go. There will always be some clumping of withdrawals around events on the platform, such as loan drawdown, and there are strategies in place to cope with those but the cap is there to stop one investor making up too large a percentage of the overall pot. That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. The assumption behind my proposal was that the intended job is to provide some kind of reward/return on funds awaiting investment. My idea was that each lender would have a personal cap broadly proportionate to what they might wish/need to hold on the platform for that purpose. I don't see that as penalising anybody. It's apparent that my assumption was wrong and that you want the account to hold a substantial proportion of direct funds. So be it. We want a blend. There were substantial idle funds on the platform prior to the account launching the QAA (> £1m) so we're not really using the account to draw in more of that. It serves multiple purposes, including providing that return on funds awaiting investment which helps boost MLIA returns, so I don't want either direct investment or swept investment to dominate the other, a 50/50 or 60/40 split would be ideal. It's still just about in that region so we just need to nudge it back a little bit towards 50/50 to make sure it stays balanced.
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gnasher
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Post by gnasher on Sept 21, 2015 11:24:40 GMT
That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. Well as I reported above I want my money as swept investment from MLIA, not as direct investment. It is only there because I did not understand the ramifications of sending it directly to QAA on day one; I would not do that again. However I cannot move it now without it dropping out of the QAA. Can I suggest that a simple way of rebalancing would be to allow lenders to move funds from "direct investment" to "MLIA swept" directly without dropping out of the QAA. That would result in 17k from me to help towards a better ratio.
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Post by chris on Sept 21, 2015 11:27:59 GMT
That said there has been a steady trend whereby direct investment in the QAA is slowly squeezing out the swept investment from other accounts so there'll be some tweaks this week to stabilise the ratio between them to roughly where we want it to be. Well as I reported above I want my money as swept investment from MLIA, not as direct investment. It is only there because I did not understand the ramifications of sending it directly to QAA on day one; I would not do that again. However I cannot move it now without it dropping out of the QAA. Can I suggest that a simple way of rebalancing would be to allow lenders to move funds from "direct investment" to "MLIA swept" directly without dropping out of the QAA. That would result in 17k from me to help towards a better ratio. We're mulling an increase in the global investment cap which would exceed the amount currently queued. If that goes through, which is likely to be this week, then you'd be able to switch without penalty.
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Post by yorkshireman on Sept 21, 2015 12:25:35 GMT
Watching this from the sidelines I can only conclude that the QAA is unnecessarily complicated if it warrants so many questions.
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Neil
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Post by Neil on Sept 21, 2015 13:00:00 GMT
The most "staggering" thing about this thread is the fact it's reached 39 pages. Somewhat of a sensationalist thread subject in my opinion ... Watching this from the sidelines I can only conclude that the QAA is unnecessarily complicated if it warrants so many questions. It really isn't. It currently pays 3.75% gross per annum (rate confirmed at the start of each month). Protected by a provision fund. Current limit of £25k per investor and £1million in total. Total amount likely to be raised in the future. Money over that £1million is queued until there is room. You can invest directly into it or by having your idle money "swept up" from the other investment accounts. "Swept" up money will be automatically released back to the other investment accounts when they need it. The end. I'm a simpleton and I can understand it. Mountains are being made out of molehills. (Those molehills are loans that are trying to drawdown  ) |
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Post by yorkshireman on Sept 21, 2015 13:22:38 GMT
The most "staggering" thing about this thread is the fact it's reached 39 pages. Somewhat of a sensationalist thread subject in my opinion ... Watching this from the sidelines I can only conclude that the QAA is unnecessarily complicated if it warrants so many questions. Mountains are being made out of molehills. (Those molehills are loans that are trying to drawdown ) That’s the point I was making! I do understand it, my statement was ironic.  And I agree, 39 pages is staggering, some people must have a lot of time on their hands.
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