james
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Post by james on Oct 11, 2016 5:17:32 GMT
A few questions come to mind after reading the site's descriptions:
1. "The asset: we conduct thorough due diligence on the underlying assets – including, where necessary, an independent professional valuation". So who does the rest of the valuations and how are they done?
2. Are the loans simple debts? If not, what are they? Does the accrued interest scheme apply when buying and selling loan parts? If the loans start out as simple debts are they still simple debts if a loan part is purchased that was previously held by another investor? Are sales "disposals" for capital gains tax purposes?
3. There's a FAQ question asking about when the interest is paid and the answer is "monthly". Leaving the question unanswered. So when is the interest paid? Same day each month for all loan parts combined, if so, which day? Monthly anniversary of when each loan part was acquired? Something else?
4. What other products does Octopus offer to retail investors with similar investment types but possibly more advantageous tax treatment?
5. How can I find a disclosure of fees, charges, transaction costs and all of the other things that are becoming standard for managed investment products? It appears that for this product there are quite large deductions of fees and such between what the borrower pays and what is paid to investors, so where are those disclosed? In the HOW DO YOU MAKE YOUR MONEY FAQ entry a charge of up to 0.35% a month to borrowers is mentioned. Is that the only charge, such that if a borrower is paying 1.5% a month that is quite common on bridging loans, investors will be receiving at least 1.15% a month? Are borrowers charged any set up or other costs and how are those reflected in the rates to borrowers and lenders, if at all?
6. There is a FAQ question and answer: "CAN I USE A CREDIT CARD? Unfortunately we don’t accept credit cards, as we’re not allowed to accept investments made with borrowed money." Are you allowed to accept investments made with borrowed money when the payment into the account is not being made with a credit card? How will you seek to determine whether the money being invested is borrowed?
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Post by vanessaiman on Oct 11, 2016 8:04:32 GMT
Hi ilmoro, I hope you’re well. You're quite right – 'loan parts' are bought and sold automatically every hour, Monday to Friday, 8am-3pm, and investments that are requested ‘out of hours’ will be tackled on a first-come, first-served basis once trading resumes. But, though it’s true that some loans could be filled by investments made over the weekend, it’s not necessarily the true that the rate will be lower. We don’t allocate investors’ money to loans based on the interest rate that they pay, but instead according to how well funded the loans are (we start with the loan that, proportionally, has the least money allocated to it, and work backwards to the loan that is most well funded). So it could be that a lower rate loan gets filled up – giving a higher overall rate. In time, we may well look to increase the frequency of our trading so that we can process investments on the weekend – and we’ll be adding to the richness and sophistication of the information we share with our investors all the time. I hope that helps! Vanessa
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bigfoot12
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Post by bigfoot12 on Oct 11, 2016 8:09:54 GMT
Hi ilmoro , I hope you’re well. You're quite right – 'loan parts' are bought and sold automatically every hour, Monday to Friday, 8am-3pm, and investments that are requested ‘out of hours’ will be tackled on a first-come, first-served basis once trading resumes. But, though it’s true that some loans could be filled by investments made over the weekend, it’s not necessarily the true that the rate will be lower. We don’t allocate investors’ money to loans based on the interest rate that they pay, but instead according to how well funded the loans are (we start with the loan that, proportionally, has the least money allocated to it, and work backwards to the loan that is most well funded). So it could be that a lower rate loan gets filled up – giving a higher overall rate. In time, we may well look to increase the frequency of our trading so that we can process investments on the weekend – and we’ll be adding to the richness and sophistication of the information we share with our investors all the time. I hope that helps! Vanessa Thanks for replying Vanessa, unfortunately my experience so far hasn't been good. Each time I see available loans averaging 5.1% and yet the loans I get average below 4.9%. I don't expect to be trying a fourth time.
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Post by pedz14 on Oct 11, 2016 9:19:15 GMT
Unfortunately I have to agree here. I do like the site but the fact that I can't get close to the available rates doesn't inspire me to invest more.
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Post by vanessaiman on Oct 11, 2016 9:41:47 GMT
Again same experience! If the moving advertised rate is supposed to be an average does anyone have a rate above the average? Hi keystone, I hope you are well. The target rate is created daily by using the available loans and it is possible to have a rate above the average. As the available loans change over time, the rate changes too. This has meant that some users have rates as high as 6% while others have rates as low as 3.79% – this is due to your investment being spread over a maximum of 40 loans. Vanessa
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james
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Post by james on Oct 11, 2016 12:06:28 GMT
Based on current activity, roughly how long might it take for a withdraw request of say £50,000 to be fully fulfilled? A commitment not required, just ballpark generalisation.
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Post by vanessaiman on Oct 11, 2016 14:32:31 GMT
Based on current activity, roughly how long might it take for a withdraw request of say £50,000 to be fully fulfilled? A commitment not required, just ballpark generalisation. Hi James, I hope you are well. If you request a withdrawal before 4pm, it will take us 1 day to process and you can expect it to take 3 working days to clear. Best, Vanessa
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littonowl
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Post by littonowl on Oct 11, 2016 14:43:15 GMT
Got to say I'm much happier with progress today. The stats were showing 26 loans open and a target rate of 5.2%, so I dipped another toe on my father's behalf this morning and lo and behold within the hour he had 26 loans in his portfolio and his rate was up to 4.84%. At this point we decided to double up, and he now has a rate of 4.95%, so it would seem the 5.2% target is pretty accurate today. Also his risk profile has improved significantly, with the biggest loan now accounting for a more respectable 6.1%, rather than almost 10% as it was before.
I also upped my own investment a little today and now have 33 loans, and a rate of 4.92%.
So if anyone's thinking of adding, today stats do seem a pretty fair reflection of what's currently available....
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james
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Post by james on Oct 11, 2016 14:49:26 GMT
Based on current activity, roughly how long might it take for a withdraw request of say £50,000 to be fully fulfilled? A commitment not required, just ballpark generalisation. Hi James, I hope you are well. If you request a withdrawal before 4pm, it will take us 1 day to process and you can expect it to take 3 working days to clear. Best, Vanessa Just to be clear, does that include the time to exit the loans that the £50,000 is invested in at the start of the process?
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Post by vanessaiman on Oct 11, 2016 15:03:35 GMT
Hi James, I hope you are well. If you request a withdrawal before 4pm, it will take us 1 day to process and you can expect it to take 3 working days to clear. Best, Vanessa Just to be clear, does that include the time to exit the loans that the £50,000 is invested in at the start of the process? Hi James, Yes this includes the time to exit the loans, however there is no guarantee that would be the same in the future. Best, Vanessa
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Post by jordan on Oct 13, 2016 10:57:39 GMT
If you'd like credibility it would be good not to write things like "some of the best interest rates on the market" when referring to a 5% target rate. Describing the rates as mediocre or less than half of the rates available for the type of lending being done would seem to be more accurate. For some context on rates, it seems readily available in the UK P2P space to offer to investors 12% before bad debt on bridging or property development loan deals. Given the relatively low rates on offer the product might work best as a place to park money for relatively short terms while waiting for higher paying deals to come along elsewhere. I'm curious about something else. On your front page there is this quote "I've been an active peer-to-peer investor for a couple of years and I've been waiting for a site like Orca that comprehensively compares products. It's a great tool that helps me make better and faster investment decisions" adjacent to a picture of a person. Is that person actually the person named as the source of the quote? Hi James, You make a fair point. But we do believe that 5% + constitutes some of the "best" rates on offer given the low-rate savings and volatile stock market environments we live in currently. I appreciate your advisory sentiment and would certainly agree with it! Perhaps will include when we conduct further analysis. The gentleman on the home page did indeed provide this testimonial; he was an early-stage beta tester of our product when we launched earlier this year and remains an active user and friend of Orca Money. His name is Adam. Thanks,
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pom
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Post by pom on Oct 13, 2016 11:15:30 GMT
I think it's a question of comparing like with like - Octopus is for passive investors, the 12%ers can and should only really be used by active investors prepared to invest a good deal of time. For passive investors who just want to pay money to start earning quickly without needing to think about it too much then Octopus DOES have some of the best rates
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littonowl
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Post by littonowl on Oct 13, 2016 11:48:33 GMT
Agreed, pom. The fact it pays monthly, with the option of into your bank too, and has the necessary liquidity to facilitate speedy withdrawals, are additional reasons to like.
With the latest round of current account rate cuts announced this week from Lloyds, TSB & Halifax, I'd presume Octopus' offering will only become more popular in the months to come.
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pauls
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Post by pauls on Oct 14, 2016 3:59:48 GMT
I am slowly building a position with Octopus Choice and have been keeping an eye on developments. Of course as time goes on and I (we) make some more deposits and receive some income then the issue of reporting comes to mind. I cannot see anywhere on the site where I can generate a report for a month, or a specific period or a tax year.
vanessaiman , is there a facility to do this on the site, or can we do this on an individual basis? Will a reporting tool option be developed?
Thanks.
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Post by jordan on Oct 14, 2016 11:12:53 GMT
I think it's a question of comparing like with like - Octopus is for passive investors, the 12%ers can and should only really be used by active investors prepared to invest a good deal of time. For passive investors who just want to pay money to start earning quickly without needing to think about it too much then Octopus DOES have some of the best rates Definitely agree pom Octopus has a great track record, given their reputation as a renowned asset manager. Their acquisition of Dragonfly Finance in 2013, specialising in property lending, means their move into P2P could be fairly seamless. If you are looking at 12% + (maybe even less depending on your risk profile..) there will be various considerations you as an investor will need to bear, if you're content with 5%, well, you will be receiving better rates than anywhere else, assuming you have a low risk profile and want to invest passively.
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