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Post by badger on Apr 3, 2014 19:17:57 GMT
Advanced options - I presume the pre-bid and bid options have no effect on completed loans?
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Post by badger on Apr 3, 2014 19:22:32 GMT
Chris On the 'auto-invest mandates' page of my account, can you also add the auction number please. It will help if I need to go back and find it in the list of completed loans
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Post by chris on Apr 3, 2014 20:12:25 GMT
Advanced options - I presume the pre-bid and bid options have no effect on completed loans?
All normal rules for bidding are adhered to, so yes AI checks the status of the loan and chooses the appropriate action.
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Post by chris on Apr 3, 2014 20:14:30 GMT
Chris On the 'auto-invest mandates' page of my account, can you also add the auction number please. It will help if I need to go back and find it in the list of completed loans You can click on the name of the loan and it will take you to the loan details page. On there you can also see the auction ID if you really need it (immediately under the title)
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Post by badger on Apr 3, 2014 22:45:31 GMT
Just looking at B****n bridging loan, which states "lenders will still receive 6 months interest even if the loan repays early". It is a 6 month loan with 3 months paid and 3 months to go.
If I pick this up on the aftermarket, and it is repaid early (say next week) does the current holder of a loan unit get a big bonus or is it shared out between everyone that has ever held it?
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mikes1531
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Post by mikes1531 on Apr 4, 2014 3:13:33 GMT
Just looking at B****n bridging loan, which states "lenders will still receive 6 months interest even if the loan repays early". It is a 6 month loan with 3 months paid and 3 months to go.
If I pick this up on the aftermarket, and it is repaid early (say next week) does the current holder of a loan unit get a big bonus or is it shared out between everyone that has ever held it?
Interesting question, and I too would like to know the answer because I have a bit of it and was considering trading it in for another bridging loan with a later maturity since I'm likely to be on holiday when the B****n loan matures. If that happened, I wouldn't want a lump of cash sitting in my account earning nothing until I return home. Then again, with the new AI option I might be able to arrange for the maturing funds to be reinvested automatically. As for the prospect of an interest windfall if the loan is repaid early, I wouldn't think that's very likely. Why would the borrower pay the loan off early if there would be no interest saving to be had? If I was arranging further financing, I'd set it up to start the day our bridging loan matures. But perhaps I'm being overly simplistic.
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andy2001
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Post by andy2001 on Apr 4, 2014 3:20:49 GMT
Just looking at B****n bridging loan, which states "lenders will still receive 6 months interest even if the loan repays early". It is a 6 month loan with 3 months paid and 3 months to go.
If I pick this up on the aftermarket, and it is repaid early (say next week) does the current holder of a loan unit get a big bonus or is it shared out between everyone that has ever held it?
Interesting question, and I too would like to know the answer because I have a bit of it and was considering trading it in for another bridging loan with a later maturity since I'm likely to be on holiday when the B****n loan matures. If that happened, I wouldn't want a lump of cash sitting in my account earning nothing until I return home. Then again, with the new AI option I might be able to arrange for the maturing funds to be reinvested automatically. As for the prospect of an interest windfall if the loan is repaid early, I wouldn't think that's very likely. Why would the borrower pay the loan off early if there would be no interest saving to be had? If I was arranging further financing, I'd set it up to start the day our bridging loan matures. But perhaps I'm being overly simplistic. Not sure if it's relevant to loan you talking about, but if it's a bridging loan is to arrange a sale of the asset being lent against. As is the case with some loans, then they would not have a choice but to repay when they sell it, and that may not be exactly when the loan is due.
And as for who the possible bonus interest goes to. I've always assumed it would be the current holder of the loan, but it would be good for someone from Assetz to confirm this.
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oldgrumpy
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Post by oldgrumpy on Apr 4, 2014 6:15:55 GMT
I don't think the autoinvest window should be the default option showing on the auction page. I think the window showing should be the straight-forward bid box, with autoinvest and shadow bid as the other tabs available.
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Post by yorkshireman on Apr 4, 2014 10:12:08 GMT
Unless I’m missing something, which is quite possible, the main downside to AI that I can see at present is having money in my account that is not earning anything whilst waiting for units to be offered on the aftermarket.
This is no different to having money locked up in a loan awaiting drawdown which as many people have rightly observed, is dead money reducing the rate of return.
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mikes1531
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Post by mikes1531 on Apr 4, 2014 10:46:53 GMT
Unless I’m missing something, which is quite possible, the main downside to AI that I can see at present is having money in my account that is not earning anything whilst waiting for units to be offered on the aftermarket.
This is no different to having money locked up in a loan awaiting drawdown which as many people have rightly observed, is dead money reducing the rate of return.
We'll have to wait until we see how often AI actually does anything for us before we can guess how much free cash is appropriate. Is it daily? Or once in a blue moon? I've activated AI for most of the existing loans that don't still have underwriter involvement, and so far AI hasn't bought anything for me at all. Might AC be willing to let us know how the average daily/weekly/monthly amount of AM transactions compares to the capital outstanding? Maybe what we need is an Auto GoCardless function!
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mikes1531
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Post by mikes1531 on Apr 4, 2014 10:56:39 GMT
I don't think the autoinvest window should be the default option showing on the auction page. I think the window showing should be the straight-forward bid box, with autoinvest and shadow bid as the other tabs available. In addition to the above, I'd like for the AI option -- where it hasn't been set yet -- to default to the current holding, rather than zero, to reduce the risk that someone would set a target of zero accidentally and find their entire position in that loan has been sold inadvertently -- instantly! Yes, I know there's a confirmation screen, but I still think it's a risk. Maybe less so in future, when changes will be infrequent, but right now when setting up a lot of AI instructions, I'm confirming a lot of changes and it would be easy to make a mistake. Would having the confirmation screen say something like "This means AI will attempt to buy/sell £XXX of this loan for you" help?
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Post by chris on Apr 4, 2014 11:30:51 GMT
I don't think the autoinvest window should be the default option showing on the auction page. I think the window showing should be the straight-forward bid box, with autoinvest and shadow bid as the other tabs available. In addition to the above, I'd like for the AI option -- where it hasn't been set yet -- to default to the current holding, rather than zero, to reduce the risk that someone would set a target of zero accidentally and find their entire position in that loan has been sold inadvertently -- instantly! Yes, I know there's a confirmation screen, but I still think it's a risk. Maybe less so in future, when changes will be infrequent, but right now when setting up a lot of AI instructions, I'm confirming a lot of changes and it would be easy to make a mistake. Would having the confirmation screen say something like "This means AI will attempt to buy/sell £XXX of this loan for you" help? We're looking at making these UX changes to show more information and default the input box to the current investment, although I don't agree with deprioritising auto-invest just yet. I don't think that, to someone new to P2P investing, having to worry about what pre-bidding, bidding and the managing aftermarket is easier or more simple than setting an investment target. Indeed on the one hand RateSetter / Wellsley are held up as being super simple when they only have very simple investment controls, but AI is criticised as being too complex when it gives a similar control over individual loans. However I freely admit my view is tainted by my own experience in the industry and being a programmer, just as the opinions on this board are likely to be skewed by people being experienced in P2P and have used our site before the changes. To try and get a true read we are organising user focus groups so we can observe how people new to P2P interact with the site. We also have a new UX designer starting in a couple of weeks who will be taking charge of our entire user interface to make sure it's a simple and clean as possible. So I'm not ruling out changing AI's priority in the interface but it will remain as is for now.
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Post by chris on Apr 4, 2014 13:38:54 GMT
@ chris - a few comments that may or may not have already been covered. The thread has got long, and I do not have the time to read it in it's entirety, so I apologise if you are having to reiterate. It appears that Auto-Invest Mandates (AIMs) can be set-up without having the necessary funding to execute them in your account. Firstly, if let's say a user has set-up AIMs to concentrate on the AM, but has insufficient funds in their account to complete the buy requests as or when loan parts come up for sale, do the AIMs get requeued? Secondly, does enabling AIMs to be set-up without having sufficient funding not leave the system open to abuse? For example; I could set-up an AIM for the complete amount of a single loan (or more), knowing that this will stall AM sales and keep me at the front of the queue until such time that I do have the funds that I actually want to invest, and transfer them in. Finally, an observation over and above anything else - AC are currently attempting to accelerate new money being brought onto the platform by offering a cashback deal. Won't introducing AI at this time be counter-productive to that strategy? The majority of lenders will be using AI on the AM, which I understand could free up some cashflow for underwriters and fellow lenders alike, but won't the largest pool of funds just be sitting in people's accounts, uninvested? Think of the AIMs as setting a target for investment in that loan and instructing the system to do what it can, within the existing rules of the platform, to hit that investment target. So they never try something and then switch off, they're constantly being monitored to see if something can be done or adjusted in order to keep the investment level as close to your target level as possible. You can place set up an AIM on a preview loan before bidding or even pre-bidding is allowed, and as and when the time rolls round when the loan opens for investment the system will automatically place pre-bids, bids or shadow bids up to your target level. If the system were unable to place investments up to your target, for example if there were a maximum bid per user set, then once the loan draws down and loan units become available the system will buy them to try and get up to your target level. If you change your mind and adjust your level again the system will do what it can in order to achieve that new total. Using an example of a loan where you have bid but then change your mind, if you adjust your level to zero the system will try and sell all your loan units after the loan is drawn down and the aftermarket opens. So users should be setting their targets on loans at all stages. I would hope this means that all loans, both on the primary and secondary markets, are getting plenty of attention from lenders. The stats show that yesterday activity was pretty evenly split between the two.
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Post by chris on Apr 4, 2014 14:59:07 GMT
Think of the AIMs as setting a target for investment in that loan and instructing the system to do what it can, within the existing rules of the platform, to hit that investment target. So they never try something and then switch off, they're constantly being monitored to see if something can be done or adjusted in order to keep the investment level as close to your target level as possible. - thank you for your detailed response. I understand the above, but does the system queue AIMs dependent on their date/time of instruction? I ask because if the AI system is completely randomised in it's search for 'possibilities', we could end up with new lenders getting their funds away long before lenders that created an AIM prior to them. On the flipside, even if the system does look for all possibilities, if it does it's search on a queued basis, keeping the same lenders at the front of the queue even when they have no funds deposited, it brings us back to my original comment of the system being left open to abuse, at least where the AM is concerned. It's not as simple as having a queue, and different events have different priority orders. AM sales prioritise those with lower current investment levels in a loan, to try and distribute loan units across all lenders who are interested. Once I have more real world data to test against I'll create a more balanced algorithm that combines distribution with a fairer way of dealing with HNWs who want larger stakes and the length of time people have been waiting in queue. Other events, such as when an auction starts, are based solely on the length of time people have been queueing. Until we see how people use the system it's impossible to guarantee a perfect balance but hopefully you guys trust us to be responsive to imbalances and to find a balance that works for as many people as possible.
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j
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Post by j on Apr 4, 2014 15:33:47 GMT
chris - thank you for your detailed response. I understand the above, but does the system queue AIMs dependent on their date/time of instruction? I ask because if the AI system is completely randomised in it's search for 'possibilities', we could end up with new lenders getting their funds away long before lenders that created an AIM prior to them. On the flipside, even if the system does look for all possibilities, if it does it's search on a queued basis, keeping the same lenders at the front of the queue even when they have no funds deposited, it brings us back to my original comment of the system being left open to abuse, at least where the AM is concerned. It's not as simple as having a queue, and different events have different priority orders. AM sales prioritise those with lower current investment levels in a loan, to try and distribute loan units across all lenders who are interested. Once I have more real world data to test against I'll create a more balanced algorithm that combines distribution with a fairer way of dealing with HNWs who want larger stakes and the length of time people have been waiting in queue. Other events, such as when an auction starts, are based solely on the length of time people have been queueing. Until we see how people use the system it's impossible to guarantee a perfect balance but hopefully you guys trust us to be responsive to imbalances and to find a balance that works for as many people as possible. , if I placed an AI order say two days ago for loan X to buy £200 worth, then changed that today to £300 worth, will that push me back again in the queue & lose me my 'earlier' place, even though it's for the same loan (ie will it be treated as wholly new & different AI instruction)?
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