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Post by henders on Jul 29, 2016 6:20:35 GMT
My first £1k (at 2% chunks) was lent out very quickly (approx 10 days I think); on the back of this I deposited a second £1K which landed in my account about a week ago.
There is still over £950 of that sitting in my account as cash (earning nothing).
I may be surprised and it may all be lent out over the next couple of weeks (I would then be happy), but at current burn rate it will take a lot longer.
I was hoping to drip feed in to BM a significant amount of cash (I'm running my Ratesetter account down) but am now concerned about the "cash drag" impacting significantly on my rate.
Maybe, BM have become too popular too quickly.
Are others experiencing the same situation?
Any comment from BM would be appreciated, thanks.
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fp
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Post by fp on Jul 29, 2016 7:53:20 GMT
I'm in a similar situation, only one loan each on both of my accounts so far this week, over £1400 sat idle in one, but only £200 in the other, although if I am to understand stevefindlay correctly, they are working on a fix for this. |
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guff
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Post by guff on Jul 29, 2016 9:11:34 GMT
Similar experience and concerns here.
Thinking (a long way?) ahead, will the IFISA have to be started from scratch, or will there be a mechanism for transferring investments from existing accounts into the IFISA?
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Post by eascogo on Jul 29, 2016 11:08:57 GMT
I'm in a similar situation, only one loan each on both of my accounts so far this week, over £1400 sat idle in one, but only £200 in the other, although if I am to understand stevefindlay correctly, they are working on a fix for this. Cash drag is likely to remain BM's long-term problem. Can we investors expect quick investment when we dump lump sums into their laps but demand a high level of security at the same time. It has been suggested that the stated headline rate should be adjusted down to take account of the 1% fee. I support that. In the interest of honesty one could perhaps go further and also request that the headline rate be adjusted to account for cash drag. Ouch!
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fp
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Post by fp on Jul 29, 2016 11:58:16 GMT
I'm in a similar situation, only one loan each on both of my accounts so far this week, over £1400 sat idle in one, but only £200 in the other, although if I am to understand stevefindlay correctly, they are working on a fix for this. Cash drag is likely to remain BM's long-term problem. Can we investors expect quick investment when we dump lump sums into their laps but demand a high level of security at the same time. It has been suggested that the stated headline rate should be adjusted down to take account of the 1% fee. I support that. In the interest of honesty one could perhaps go further and also request that the headline rate be adjusted to account for cash drag. Ouch! I can see where you are coming from... sort of, but I tend to work with a common sense approach, which tells me not to try and push the car more than I know its capable of. I'm in agreement with the headline rate, it is a little misleading if you're not savvy... then again, you have two weeks or more drag on the likes of FC when you take everything in to consideration, I doubt their numbers are truly accurate on the dashboard.
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Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
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Post by Neil_P2PBlog on Jul 29, 2016 14:43:58 GMT
I'm in a similar situation, only one loan each on both of my accounts so far this week, over £1400 sat idle in one, but only £200 in the other, although if I am to understand stevefindlay correctly, they are working on a fix for this. Cash drag is likely to remain BM's long-term problem. Can we investors expect quick investment when we dump lump sums into their laps but demand a high level of security at the same time. It has been suggested that the stated headline rate should be adjusted down to take account of the 1% fee. I support that. In the interest of honesty one could perhaps go further and also request that the headline rate be adjusted to account for cash drag. Ouch! That may be difficult if the fee is post-tax, just subtracting 1% would be missleading for those that pay higher tax on the ~8% earnings
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Post by stevefindlay on Jul 30, 2016 7:40:15 GMT
Please excuse if I repost a response on this from another thread on this forum from July 12 regarding cash drag:
"We are disappointed. We are disappointed that we've not been able to allocate your new loans as quickly as we hoped, or as quickly as normal. Please accept our apologies. Sorry.
What has happened
Since the Brexit vote (and we hate using that as a reason) two key things have happened:
(1) We've seen a significant growth in the number of new investors coming to BondMason; and
(2) We've tightened some of our lending criteria - i.e. max 65% LTV for property-backed lending (75% LTV when compared to 90 day sale value)
What this means
We've spread fewer new loans across more new investors; which has impacted the allocation rate and cash drag. Put simply, recent investors are being allocated at c.10% per week as opposed to 25%-40% per week; which simply isn't good enough. This impacts any new investors since c. mid June (as our allocation algorithm cycles through all under-invested investors fairly).
What we are doing to fix it
(1) New platforms: We are bringing on 3 new platforms (2 of which aren't actually P2P platforms; but are specialist lenders that we've established a relationship with). The first is making their loan book available to us this week (c.10-20 new loans should come from this). The other 2 will take another 2-4 weeks, but should be able to offer very good loan volumes, and good risk-adjusted investment opportunities. We will continue to expand our platform (loan provider) relationships in this way.
(2) Release of improved loan allocation algorithm: This will enable our largest investors (who are 100% invested) to diversify further when new loans come in, and swap out smaller portions of existing loan positions to new investors. This is a win-win situation. Existing investors get more diversified; new investors have less cash drag. This is being worked on and tested. The full release should occur this month.
(3) Investment in our investment team: we are delighted with the client feedback and growth so far this year. We appointed 4 new members to the team over the last month, including a dedicated Chief Investment Officer who started 3 weeks ago (and we've known personally for about 10 years). Updates to follow on our team page (About Us) in the coming week or so.
Please note, we are not proposing to loosen our investment criteria to approve more new loans and solve cash drag. This is isn't the appropriate response.
What happens next
This hurts us and we are working hard to solve it: we are working hard to build our reputation, so client experience is our #1 priority. Minimising Cash Drag is the biggest issue we are facing right now.
We are aligned: we only charge fees on invested capital, so we don't earn anything on uninvested cash. It is in our interests to minimise your cash drag. We monitor your return as a ratio of our fee income - we aim for this to be at least 8:1 for all clients (which means you are getting a minimum gross 8% return vs. our 1% fee). Because daily rounding to the nearest 1p may impact the smallest investors (£1,000-2,000) who are not fully invested, we will monitor the situation more closely during July, and may waive / refund portions of our fee if rounding has created any undesirable outcomes.
We are available: we pride ourselves on customer service. If you have any questions or concerns, please contact a member of the team using our central email (invest@bondmason.com) or number (020 3126 6705) and we will aim to answer your call immediately and/or respond within 24-48 hours. Most likely, I will respond personally as this is a very important issue for us.
Once again, please accept our sincere apologies. We are very grateful for the candid feedback from this forum, and I hope to reassure you that your comments are important to us, and we are on top of this issue"
As an update to this post, we've added 2 new platforms and started to invest across these on Friday.
The allocation algorithm update is in final testing, and we are looking forward to releasing this soon.
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Post by henders on Aug 5, 2016 14:15:47 GMT
My first £1k (at 2% chunks) was lent out very quickly (approx 10 days I think); on the back of this I deposited a second £1K which landed in my account about a week ago. There is still over £950 of that sitting in my account as cash (earning nothing). I may be surprised and it may all be lent out over the next couple of weeks (I would then be happy), but at current burn rate it will take a lot longer. I was hoping to drip feed in to BM a significant amount of cash (I'm running my Ratesetter account down) but am now concerned about the "cash drag" impacting significantly on my rate. Maybe, BM have become too popular too quickly. Are others experiencing the same situation? Any comment from BM would be appreciated, thanks. So a week on from my post above and I still have just over £700 held as cash. I do appreciate stevefindlay's regular and re-assuring input but I am thinking that the plan to drip-feed in my large RS monies as they repay may not be feasible. I will review how much longer it takes to get the rest of this chunk invested and then decide. I assume others are in the same boat with regard to slow lending?
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dave
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Post by dave on Aug 5, 2016 15:44:53 GMT
I set up my BM account last weekend. I got 9 parts Monday/Tuesday (at £40). Nothing showing since, but display does say it could be 3 days out of date. BM still investing faster than the GBBA did  Dave |
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guff
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Post by guff on Aug 5, 2016 15:59:26 GMT
Likewise, but having spoken to stevefindlay I am willing to wait until their new systems are in place before deciding whether to invest more. |
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jw01
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Post by jw01 on Aug 5, 2016 16:58:24 GMT
I've had nothing in three weeks except for some repayments! Not so much cash drag, more cash death.
I'll wait for the new systems but, if there's no improvement, there are other places to go.
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Greenwood2
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Post by Greenwood2 on Aug 6, 2016 7:10:13 GMT
That doesn't sound right, whenever I've had cash available it's been lending fast over the last week or so. I'd contact Steve.
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Post by stevefindlay on Aug 6, 2016 8:07:06 GMT
I've had nothing in three weeks except for some repayments! Not so much cash drag, more cash death. I'll wait for the new systems but, if there's no improvement, there are other places to go. That doesn't sound right at all - it sounds like one of your settings is switched off. Please can you contact us ASAP with your account details: invest@bondmason.com and we'll look into it. The only other possibility, is that you've had lots of repayments vs. your new allocations. But even that feels unlikely. Many thanks
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Post by stevefindlay on Aug 6, 2016 8:18:48 GMT
henders dave We added a few loans last week, but most importantly the long-awaited allocation upgrade will be released at some point next week. We finished primary testing this week, and the results are very encouraging: full allocation of investors with less than £5-10k in 2-5 days. We're now ensuring that we've thought through every 'corner-case', before releasing. But we are almost there...one last push. On loan purchasing, we have been a little slower than usual, but in conjunction with the upgrade above, we are at a good rate. I can't wait to have this released and get everyone invested promptly!
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dermot
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Post by dermot on Aug 6, 2016 23:26:20 GMT
had a sudden flurry of loans in £110 chunks and so my uninvested amount fell to less than 10% so bunged another chunk in.
As soon as that clears think I'd better get some more in before everyone else gets in on the act - new algorithms not withstanding.
I still have quite a bit waiting for GBBA in AC and think BM is a good home for much of that, though certainly not selling down anything already invested in GBBA.
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