oldgrumpy
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Post by oldgrumpy on Apr 5, 2016 7:57:57 GMT
QAA is always going to be suspect since it's a all-powerful all-knowing black box controlled by AC. And it's getting a bit irritating that we're not allowed to air an opinion without it being drowned out by AC within 3 seconds... Chris does not drown anybody out and answers (my) questions and observations in detail and sometimes robustly (as does Andrew). That I (we) don't always agree is irrelevant. I hope they carry on doing it!
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Post by reeknralf on Apr 5, 2016 8:15:46 GMT
I like chris' posts. I also expect AC to take decisions which benefit the platform, and that sometimes I will be penalised by these decisions. If we were in some crisis and QAA was allowed to bolt out of the door before anyone else this would seem wrong. I don't sell loans only a couple of months after investing, so am not troubled by QAA preferentially off-loading loans it has underwritten. SteveT suggested a time limit for this privilege. This seem to me, to be a simple and effective remedy. I also think discounts could move in 0.5% increments without the gaming problem chris mentions, and 0.5% might be a more reasonable penalty for someone wanting to jump above QAA in the queue because they need to sell a loan unexpectedly. |
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investibod
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Post by investibod on Apr 5, 2016 14:27:15 GMT
QAA is always going to be suspect since it's a all-powerful all-knowing black box controlled by AC. And it's getting a bit irritating that we're not allowed to air an opinion without it being drowned out by AC within 3 seconds... Chris does not drown anybody out and answers (my) questions and observations in detail and sometimes robustly (as does Andrew). That I (we) don't always agree is irrelevant. I hope they carry on doing it! This pretty much sums up what I was going to say. I for one welcome Chris's input. I might not always agree with everything he says, of indeed with the position that AC in general takes on a particular point. However, I do not see that is a problem. I quite often see heated discussions on here where I manage to find myself disagreeing with both sides. That does not stop me enjoying the debate. More often than not, it is educational and I find myself learning something. Occasionally I might be able to pass on something of the little I have learned to help someone else. I hope that Chris continues to post verbosely and that anyone who disagrees with what he says can do so in a polite (and hopefully fairly friendly) way. Likewise, I hope that Chris is prepared for robust challenges to his views  Regarding the QAA - sometimes its existence will be to the benefit of a particular investor, sometimes to their detriment in a particular situation. It is a fact of like of this platform and something we have to live with. I personally am pleased that the way it operates is being reactively fine tuned and see this as part of the maturing process rather than a sign of instability. I appreciate that others will disagree with my view. I have no problem with that.
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jonah
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Post by jonah on Apr 5, 2016 15:13:22 GMT
Honest and open dialogue is sort of the point of a successful forum. Differing perspectives, raised civilly and with the forum rules are also sort of the point. I wouldn't want anyone to leave due to the issues suggested above, irrespective of being part of a platform or not. Personally I've learnt more from chris posts than I've argued with them, although I have disagreed from time to time. |
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Post by stuartassetzcapital on Apr 5, 2016 21:46:12 GMT
Interesting to read how people believe that the MLIA should have higher sales priority than a lower interest fast access account. Fast access / liquidity earns less return across all markets. No different here. The MLIA offers the highest returns and that is the opposite situation, we deliver quite good to very good liquidity yet shouldn't that account principally be for long term hold for those very high returns ? Unless overall demand from say other MLIA members or ISA etc create liquidity in current market conditions even for that account too ?
Last year we had excess demand that made MLIA super liquid but that isn't a normal situation. Highest returns will be offered for lowest liquidity as it is in all natural markets other than in moments of extreme demand.
I'd be interested to hear more detail from those people who think QAA shouldn't be liquid and shouldn't have sale preference as part of its lower coupon offering - and why they think that. And vice versa how can MLIA having huge liquidity (other than with a discount) alongside its high coupon be reasonable ?
MLIA offers the highest rates but please don't expect us to also make it super highest priority liquid in all market conditions too as (to quote another platform thread on here) some things that are too good to be true are indeed too good to be true.
The team has done well to deliver high volume and high quality, high coupon loans to our cherished retail lenders and long may it continue. We have losses currently expected of c £1m on over £100m of lending to date since April 2013 and that has to be a good thing as it barely affects interest income never mind capital. We'll be publishing detailed stats and indeed our stress tests shortly and they make good reading and could perhaps be the benchmark for all platforms showing their anticipated performance through the next cycle.
Thanks for everyone's feedback, it makes interesting reading and is always welcome.
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Post by Butch Cassidy on Apr 6, 2016 7:37:45 GMT
stuartassetzcapital : I assumed MLIA investors got the highest return as they took the highest risk?
I would like equality of opportunity for all accounts in buying & selling, as that not only is by definition the fairest & most equitable way to treat every investor but is generally the most efficient. Investors are concerned about the opaque working of the algorithms behind these accounts as it is unclear who at AC is responsible for deciding or changing the priorities & what the exact rationale is for thinking you can improve on Adam Smith's invisible hand, in each & every occasion over time?
Reading between the lines these biased algorithms were used in the short term to establish the accounts, which seems fair enough, but even chris seems to concede it is not a desirable situation in the longer term - "In an ideal world everything would operate at parity and as we scale we should be trending towards that, rather than the marginalisation of the MLIA."
I have no real issue with the way QAA operates at present but given it's size & prominence to your offering going forward I would have major concerns about continued market priority because it could effectively lock MLIA holders into enforced losses to generate sales in any liquidity squeeze. It was possible to factor this in whilst rates of 12%+ were available but looking at the pipeline there are only 4/39 loans in double figures so effectively future MLIA investors are facing maximum 9% gross rates less 1% sales tax less X% default loss making the benefits over say GBBA at 7% with PF negligible. I am sure their are plans to offer rates to suit all but MLIA prospects are bleak if current trends continue.
I simply don't subscribe to the argument that because a low interest product is popular MLIA investors should be punished for wanting higher risk/returns, in the same way that those who advocated the gold standard, ERM & Euro were wrong to think that they could manipulate the market & succeed.
DISCLAIMER: AC is my largest p2p holding, I am soon to be a shareholder, I like what they do, rate their management & see them as a long term winner in this marketplace.
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oldgrumpy
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Post by oldgrumpy on Apr 6, 2016 8:05:58 GMT
"Interesting to read how people believe that the MLIA should have higher sales priority than a lower interest fast access account"
Not higher sales priority, equal priority.
If not, then place a marker of some sort on the loans where MLIA is disadvantaged.
That we can unknowingly place a loan part on sale at par in the secondary market where QAA is quietly making sure it is not currently saleable is wrong. An indicator should appear informing investors of the (temporary) situation so that they can make alternative arrangements for liquidation of cash for other investments.
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Post by lynnanthony on Apr 6, 2016 10:52:37 GMT
QAA is always going to be suspect since it's a all-powerful all-knowing black box controlled by AC. And it's getting a bit irritating that we're not allowed to air an opinion without it being drowned out by AC within 3 seconds... You would rather AC did not reply? Or only replied in a way you agreed with? This is a forum. A disussion group. I don't want to agree with everything, to like everything. I do want the maximum amount of information that can reasonably be posted. I and other members can and will make our own decisions as to what to take on board.
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bigfoot12
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Post by bigfoot12 on Apr 6, 2016 19:36:18 GMT
QAA is always going to be suspect since it's a all-powerful all-knowing black box controlled by AC. And it's getting a bit irritating that we're not allowed to air an opinion without it being drowned out by AC within 3 seconds... I've no idea why someone would make such a foolish complaint. It's not the first time I've been accused of "shutting down conversation" where I've tried to put the platform's point of view across. I am very pleased with your engagement with this forum. I think that would go for most people, on this forum, and would be extended to other AC staff and directors. Please continue to post at will.
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jonah
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Post by jonah on Apr 6, 2016 19:38:41 GMT
QAA limit now 15m... That's a sizeable jump!
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bigfoot12
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Post by bigfoot12 on Apr 6, 2016 19:47:00 GMT
Interesting to read how people believe that the MLIA should have higher sales priority than a lower interest fast access account. Fast access / liquidity earns less return across all markets. No different here. I would like equality of opportunity for all accounts in buying & selling, as that not only is by definition the fairest & most equitable way to treat every investor but is generally the most efficient. Investors are concerned about the opaque working of the algorithms behind these accounts as it is unclear who at AC is responsible for deciding or changing the priorities & what the exact rationale is for thinking you can improve on Adam Smith's invisible hand, in each & every occasion over time? DISCLAIMER: AC is my largest p2p holding, I am soon to be a shareholder, I like what they do, rate their management & see them as a long term winner in this marketplace. "Interesting to read how people believe that the MLIA should have higher sales priority than a lower interest fast access account"
Not higher sales priority, equal priority.
If not, then place a marker of some sort on the loans where MLIA is disadvantaged.
That we can unknowingly place a loan part on sale at par in the secondary market where QAA is quietly making sure it is not currently saleable is wrong. An indicator should appear informing investors of the (temporary) situation so that they can make alternative arrangements for liquidation of cash for other investments.
I think that far too many people seem to be trying to 'game' the system. Buy loans that you want to hold; if you need money to invest in something better then sell some if you can. Don't buy loans that you want to sell in a few days or weeks. Liquidity has a price; ask Lehman. Anyone who expects the relative liquidity of the second half of last year is likely to be in for a nasty shock in the next few years. By accepting a lower yield the QAA is promising higher liquidity, that promise is made to us who are offered the QAA. If you value liquidity then use it (or your bank account which is even more liquid). However, I would like the rules in a FAQ somewhere on the site, rather than having to refer to a (possibly out of date) post by chris on this forum.
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Post by chris on Apr 6, 2016 19:58:43 GMT
QAA limit now 15m... That's a sizeable jump! There's a large marketing campaign starting in the next few days which is promoting each of the various investment accounts. We were about to hit the £10m cap which wouldn't have been ideal if a proportion of new lenders were signing up expecting to invest in it, so we've upped the limit as high as we're able to this month to give us plenty of headroom.
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Post by driain on Apr 14, 2016 8:59:19 GMT
Hi guys, I am a bit new to AC so wanted to clarify something. If I deposit say £20k in the cash account then AC automatically sweeps it into the QAA alongside any other uninvested funds (say no more than £5k) and pays 4.25%. As the £20k is on deposit in Barclay's, then this is covered by the FCS and therefore not subject to platform risk.
Am I understanding things correctly?
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Post by lynnanthony on Apr 14, 2016 9:31:22 GMT
Hi guys, I am a bit new to AC so wanted to clarify something. If I deposit say £20k in the cash account then AC automatically sweeps it into the QAA alongside any other uninvested funds (say no more than £5k) and pays 4.25%. As the £20k is on deposit in Barclay's, then this is covered by the FCS and therefore not subject to platform risk. Am I understanding things correctly? I think not. This is P2P, the FSC does not apply. Your £20k is not on deposit in Barclays. Some of the QAA may be at Barclays, but most will be invested in loans. (I'm open to correction).
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ilmoro
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'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 Apr 14, 2016 10:35:25 GMT
Hi guys, I am a bit new to AC so wanted to clarify something. If I deposit say £20k in the cash account then AC automatically sweeps it into the QAA alongside any other uninvested funds (say no more than £5k) and pays 4.25%. As the £20k is on deposit in Barclay's, then this is covered by the FCS and therefore not subject to platform risk. Am I understanding things correctly? Im waiting for a reply from AC enquiries on exactly what the level of protection, if any, is, £75 or £50k, and how cash swept from cash to QAA is treated. Is it held only as cash or some invested in loans. Remember FSCS cover is by institution so if you have other money in Barclays or any link institutions that share same FSCS protection that will count as part of the allowance.
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