toffeeboy
Member of DD Central
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Post by toffeeboy on Apr 6, 2016 13:42:43 GMT
Just in case any of you missed this, seems to be very Ratesetter heavy but the big three are mentioned at the end unfortunately to update that none of them are ready yet, hopefully it will be further updated once they are up and running.
Moneywise - risky new ISA
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Post by propman on Apr 6, 2016 15:37:10 GMT
Not sure where they get 9% as the high risk sites. Also where did they get their info on the PF? While they are correct at the current quoted default rate, the no loss of interest would be 3.2% and loss of capital after 11.5% not 11 & 20% unless they mean all interest ever earned!
A comment of look for 3-6% is truly worrying as it assumes that investors can't do their own risk assessment!
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Post by wiseclerk on Apr 6, 2016 15:54:07 GMT
Not sure where they get 9% as the high risk sites.
I assume they took the 9% they list Abundance for in the table.
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jonah
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Post by jonah on Apr 6, 2016 18:47:58 GMT
The 32.5% of people polled already use P2P stat was interesting... that high for a 'mainstream' site I would have thought?
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james
Posts: 2,205
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Post by james on Apr 6, 2016 20:08:17 GMT
No FSCS protection for the investments automatically makes it high risk for some purposes. Regardless of how smooth the investment returns are there's that chance of losing all money on a platform to fraud or whatever else.
You have to love their table that is titled "Innovative Finance Isas currently available" and which includes RateSetter and Zopa with a column saying not FCA approved yet, so they aren't really available at all, failing both on full approval and lacking ISA manager status.
Look for 3-6% also ignores the simple fact that for borrowers for some types of credit the rates that are normal in that market are way above that, in the 1-2% a month range and even higher sometimes for the borrowers getting competitive deals.
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adrianc
Member of DD Central
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Post by adrianc on Apr 7, 2016 7:01:56 GMT
The 32.5% of people polled already use P2P stat was interesting... that high for a 'mainstream' site I would have thought? 32.5% of 892 people answering the poll on Moneywise's site over the course of a week. So 290 people with an interest in P2P and the willingness to answer a poll on P2P. The 76 people who said "I've never heard of it" clearly didn't even read the article the poll would have gone alongside...
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Post by lb on Apr 7, 2016 8:58:45 GMT
Not sure where they get 9% as the high risk sites. Also where did they get their info on the PF? While they are correct at the current quoted default rate, the no loss of interest would be 3.2% and loss of capital after 11.5% not 11 & 20% unless they mean all interest ever earned!
A comment of look for 3-6% is truly worrying as it assumes that investors can't do their own risk assessment! do you really see 95% of people wanting, or being able, to assess the risk? managed accounts will be for the mainstream and pick your own accounts will always be niche and for any 'reliable' managed account 3-6% is where we are
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Post by propman on Apr 7, 2016 16:58:43 GMT
A comment of look for 3-6% is truly worrying as it assumes that investors can't do their own risk assessment! do you really see 95% of people wanting, or being able, to assess the risk? managed accounts will be for the mainstream and pick your own accounts will always be niche and for any 'reliable' managed account 3-6% is where we are Personally I would be surprised if 25% of professional investors could properly assess risk, but yes I do think that the majority of people lending on P2P should be able to have some comprehension of the risks they are getting into. If this is not the case, the FSA ought to restrict investing to those that have or require independent advice from those that have otherwise they will rightly come down hard to support those that lose money (you can't blame a toddler for chewing a razor blade, you keep them away from them!).
What worries me is that the suggested approach favours an unscrupulous platform offering risky loans at a low rate with glossy marketing to attract the unwary.
Risk assessment is not just about a one dimensional view of likely variability in returns. Investors need to understand the likely loss in a severe down-turn, possibility of losing the vast majority, limited possible upside and likely distribution of returns (with which to evaluate past performance) to name a few. So some may prefer likelihood of consistent high returns but with occasional significant losses (secured property lending?), while others would want a much lower risk of an overall loss (substantial provision buffered loans?).
- PM
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