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Post by pepperpot on Apr 14, 2016 10:49:47 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. Some is definitely held in loans, regardless of if swept or direct. Trouble is, if they tell you how much is held in Barclays (as you point out, a reasonable question for personal FSCS exposure levels) the amount can be extrapolated out to how much of the QAA is invested, making the account slightly less 'black box' than intended.
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Post by lb on Apr 14, 2016 10:54:24 GMT
Surely if Barclays were to go bust then AC (as a whole) would have £75k protection in total - to be divided up between all lenders in some proportion (not just QAA holders) meaning pennies to everyone
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ilmoro
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Post by ilmoro on Apr 14, 2016 11:17:10 GMT
Surely if Barclays were to go bust then AC (as a whole) would have £75k protection in total - to be divided up between all lenders in some proportion (not just QAA holders) meaning pennies to everyone No, each lender has a separate client account. From AC T&C When your application has been approved Assetz SME Capital will open a client account for you. Any funds that you transfer to the client account will be held by Assetz SME Capital entirely separate from the assets and funds of the Assetz Capital Companies.
Each client account will be held by Assetz SME Capital with the Account Bank.
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Post by lb on Apr 14, 2016 11:44:18 GMT
Surely if Barclays were to go bust then AC (as a whole) would have £75k protection in total - to be divided up between all lenders in some proportion (not just QAA holders) meaning pennies to everyone No, each lender has a separate client account. From AC T&C When your application has been approved Assetz SME Capital will open a client account for you. Any funds that you transfer to the client account will be held by Assetz SME Capital entirely separate from the assets and funds of the Assetz Capital Companies.
Each client account will be held by Assetz SME Capital with the Account Bank.AFAIK this is not a separate BANK account. AC have one client account with all clients money in it and total protection of £75,000 (maybe less) Be very happy for chris to confirm otherwise ...
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sl75
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Post by sl75 on Apr 14, 2016 12:29:29 GMT
AFAIK this is not a separate BANK account. AC have one client account with all clients money in it and total protection of £75,000 (maybe less) Be very happy for chris to confirm otherwise ... Astonishingly, this part has been discussed before (as the answer is equally relevant to all P2P platforms, and indeed to firms of solicitors etc.) - and it was stated that the client money rules extend the FSCS protection to the clients (as it is their money) rather than to the organisation operating the account on behalf of those clients. (in effect, it is as if the platform had opened a separate account in each investor's name with the bank, but without the additional administrative overhead of actually doing that!) QAA investment is at best ambiguous though - whose money is the uninvested cash in the QAA? (presumably not ours, as we have no visibility of it, and are being paid interest on it by someone else, and presumably not AC's as they are not a licensed deposit-taker...)
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Post by chris on Apr 14, 2016 12:33:12 GMT
No, each lender has a separate client account. From AC T&C When your application has been approved Assetz SME Capital will open a client account for you. Any funds that you transfer to the client account will be held by Assetz SME Capital entirely separate from the assets and funds of the Assetz Capital Companies.
Each client account will be held by Assetz SME Capital with the Account Bank.AFAIK this is not a separate BANK account. AC have one client account with all clients money in it and total protection of £75,000 (maybe less) Be very happy for chris to confirm otherwise ... All client money sits within a single account within Barclays and we then virtually segregate those funds within our system into individual accounts for each lender and each lender's investment accounts. I think I understand how that interacts with FSCS but do not have enough confidence to be able to publicly state. However I know the customer services team sent an email round to the exec earlier to ask for input on this matter so they should be reporting back soon I would hope.
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Post by chris on Apr 14, 2016 12:34:46 GMT
AFAIK this is not a separate BANK account. AC have one client account with all clients money in it and total protection of £75,000 (maybe less) Be very happy for chris to confirm otherwise ... Astonishingly, this part has been discussed before (as the answer is equally relevant to all P2P platforms, and indeed to firms of solicitors etc.) - and it was stated that the client money rules extend the FSCS protection to the clients (as it is their money) rather than to the organisation operating the account on behalf of those clients. (in effect, it is as if the platform had opened a separate account in each investor's name with the bank, but without the additional administrative overhead of actually doing that!) QAA investment is at best ambiguous though - whose money is the uninvested cash in the QAA? (presumably not ours, as we have no visibility of it, and are being paid interest on it by someone else, and presumably not AC's as they are not a licensed deposit-taker...) The system constantly rebalances all QAA accounts so that all lender holdings are the same. As I understand it the cash component remains the property of the lenders, so all lender will have an equal percentage of their QAA holdings held as cash in the client money account.
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Post by crabbyoldgit on Apr 14, 2016 13:16:38 GMT
Its all a bit of a farce really the only time i know of when a state had to face up to fcfs type underwritting, Iceland, it did a runner leaving the guarantee about as much use as a chocolate soldier in a fire storm.Well thats as i remember it anyway stand to be corrected.  |
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sl75
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Post by sl75 on Apr 14, 2016 13:27:24 GMT
Its all a bit of a farce really the only time i know of when a state had to face up to fcfs type underwritting, Iceland, it did a runner leaving the guarantee about as much use as a chocolate soldier in a fire storm.Well thats as i remember it anyway stand to be corrected. Northern Rock?
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ilmoro
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Post by ilmoro on Apr 14, 2016 13:34:02 GMT
Its all a bit of a farce really the only time i know of when a state had to face up to fcfs type underwritting, Iceland, it did a runner leaving the guarantee about as much use as a chocolate soldier in a fire storm.Well thats as i remember it anyway stand to be corrected. The FSCS has been repaid all the money (from Landsbanki asset sales) it had to fork out to compensate Icesave customers and has in turn repaid the govt which lent it the money in the first place. Not sure if it has recovered the interest it had to pay the govt which members of the FSCS had to cover through higher fees. ISTM Uk protection system worked beyond how it was supposed to, nobody lost any money at all. Check the website to see how much work it is doing. In 2011 it had paid out 23bn since 2001 to 4m people. Not sure that can be described as a farce. Edit talking of FSCS www.fscs.org.uk/news/2016/april/advice-to-invest-in-peer-to-peer-lending-may-now-be-covered-by-fscs/
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jonah
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Post by jonah on Apr 14, 2016 20:13:08 GMT
Its all a bit of a farce really the only time i know of when a state had to face up to fcfs type underwritting, Iceland, it did a runner leaving the guarantee about as much use as a chocolate soldier in a fire storm.Well thats as i remember it anyway stand to be corrected. Northern Rock? Bradford and bingley, abbey national, rbs, hbos... All were rescued in part by direct or indirect state support (some via encouraging other banks to take them over) and that's just the uk. The list in parts of Europe is quite a bit longer.
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registerme
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Post by registerme on Apr 14, 2016 20:24:53 GMT
It also bailed out everybody who had funds with any of the Icelandic banks that went under.I stand corrected, see the post from bracknellboy below  .
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Post by bracknellboy on Apr 14, 2016 20:47:11 GMT
registerme : not I think actually as true as the statement suggests. The fscs paid out for those icelandic banks that were covered e.g. Kaupthing Edge. But it was the uk government that rescued savers in the non-FSCS covered IceSave - I'm pretty sure. And that is a major distinction. Teh original comment from crabbygit has a small element of truth: as I recall IceSave (or the ultimate G..... entity) was meant to have some cover under I think a Danish mutual cover arrangement for retail deposits: which I am pretty sure they found a 'reason' to walk away from/not honour). All done from memory, caveated may be subject to senility. Oh, and I had exposure to nearly all of those mentioned in both this post and the ones above. So apart from Northern Rock, B&B, Abbey, Kaupthing Edge.....what has the FSCS ever done for us ? EDIT: It may have only be NR & B&B & KE that had FSCS payments. Abbey was taken over by Santander as I recall and I think it was taken over as a going concern. All a bit hazy now.
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jonah
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Post by jonah on Apr 14, 2016 21:11:12 GMT
You are correct re abbey. I was thinking of alliance and Leicester
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Post by bracknellboy on Apr 14, 2016 21:21:30 GMT
You are correct re abbey. I was thinking of alliance and Leicester oh of course. i had money with them as well. Forgot about them. I went through a period of being somewhat traumatised to rather blaise: another one's gone pop, what the hell........
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