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Post by astro1900 on Aug 29, 2016 13:15:23 GMT
Hi everyone,
This forum has been invaluable for doing the due diligence research when investing into various platforms but I have also come across several p2p comparison websites such as 4thway, Fundshare etc.
So I wanted to ask the crowd as to whether others find these useful? And if one had to write a wishlist for the tools you would need to create a diversified p2p portfolio, what would it be?
Thanks in advance
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Neil_P2PBlog
P2P Blogger
Use @p2pblog to tag me :-)
Posts: 355 
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Post by Neil_P2PBlog on Aug 29, 2016 13:21:54 GMT
I've been putting together one here: p2pblog.co.ukWhilst the 'compare' section is currently just a big list of platforms with basic details like their altfi index share and estimates of monthly website user volume I'm hoping to build a much more useful tool. There's also detailed reviews of my experiences investing via platforms and a some investment tools - a calculator for Funding Secure secondary market and a tool to analysis historical PP prices. |
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Post by wiseclerk on Aug 29, 2016 13:52:43 GMT
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Post by Deleted on Aug 29, 2016 15:52:00 GMT
I don't think I'd "go" with a simple table of comparisons, I looked at a few when I started and they did not manage the risk side of the equation very well.
To get a handle on risk you need to read these articles on this forum and invest a significant amount of time to get to understand what is being talked about. Then you need to design a strategy to deal with the risk as it is described.
No table is going to be able to do that for you. I know (you want a table, like I did) but if you think a table is the right answer you are asking the wrong question.
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Post by astro1900 on Aug 29, 2016 20:34:10 GMT
I don't think I'd "go" with a simple table of comparisons, I looked at a few when I started and they did not manage the risk side of the equation very well. To get a handle on risk you need to read these articles on this forum and invest a significant amount of time to get to understand what is being talked about. Then you need to design a strategy to deal with the risk as it is described. No table is going to be able to do that for you. I know (you want a table, like I did) but if you think a table is the right answer you are asking the wrong question. Interested you mention this as I agree that these tables in themselves are not able to provide enough data to invest. What I'd be interested to know is what would people prefer: 1) A "fund" platform to invest and forget (e.g. Bondmason) which automatically invests for you with little say in risk 2) Specific P2P analytics tools for the more hands on investors (e.g. NSR Invest - helps to backtest portfolio with Prosper/Lending Club; PeerTrader = allowing real time monitoring of available loans). 3) A fully tailored service with perhaps elements of an IFA etc. to help create the portfolio (clearly a more premium service) In essence what I'm asking is what would one need to feel that the risks are being appropriately managed?
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Post by Deleted on Aug 30, 2016 6:09:51 GMT
Interesting question. For me the answer would have to be "none of the above"  |
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archie
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Post by archie on Aug 30, 2016 7:06:47 GMT
For me the most useful information came from reading investor experiences on this forum.
One thing that might be helpful is the normal loan length for each platform. There are some platforms that initially looked interesting but loan lengths were longer than I'd like.
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ali
Member of DD Central
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Post by ali on Aug 30, 2016 7:17:34 GMT
Good idea. Something else that would be informative would be the platform's default rate and subsequent recovery rate.
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Post by easteregg on Aug 30, 2016 7:44:42 GMT
The P2P money website was the first independent peer-to-peer comparison site within the UK, and we cover all of the companies operating here. Peer-to-peer lending isn't saving, and actually the headline rate is pretty meaningless unless you take into account bad debts and fees. To perform a meaningful comparison you need to know AER, fees, and bad debts, and that also assumes money is reinvested immediately which on some sites is not possible.
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Post by astro1900 on Aug 30, 2016 23:00:54 GMT
Interesting question. For me the answer would have to be "none of the above" Would you mind elaborating on what "right" might look like for you personally? Seems that the underlying market dynamics are somewhat different in the UK compared to US so keen to understand the root of the problem to help create a solution
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Greenwood2
Member of DD Central
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Post by Greenwood2 on Aug 31, 2016 7:14:09 GMT
One big problem with risk is the age of the platform, the new platforms look safe because they have no bad debt, that won't last, but how bad it will be is impossible to predict. As platforms get older bad debt starts to show and some platforms seem a worse risk than others, but do these platforms have higher rates that compensate for the added risk? And having experienced bad debt have the older platforms put in place better procedures to reduce future risk, compared to the untested newer platforms?
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Post by Deleted on Aug 31, 2016 8:04:30 GMT
Interesting question. For me the answer would have to be "none of the above" Would you mind elaborating on what "right" might look like for you personally? Seems that the underlying market dynamics are somewhat different in the UK compared to US so keen to understand the root of the problem to help create a solution I don't think there is a problem. What there is is a bunch of different types of loans, different types of portal and I think a relatively poor quality (by which I mean process quality) analysis of risk. Some issues: Within Portal A there will be a range of loans all claiming to be an Alpha risk paying say 12%. When you look in detail at the loan you discover the occasional anomoly and slowly you discover that Portal A is useless at lending say on boats. Now it may be that one of the comparison websites may have picked that up (or not) the point is, that a human will have picked that up BEFORE they took the loan but a comparison website requires data and so picks up the issue AFTER the loan went live (and often one year later) by which time, of course things have changed again. Rapid change is part of the industry at the moment. So basically backward facing data analysis is  at helping you with forward looking decision making especially when it is so granular. Then there is valuation. Scrap value, retail value, wholesale value, 90 day value etc etc and which Portal will step in to support the valuation to retain their default record even when they say they will not etc etc. Which loans are more recoverable? Those portals that offer "vanilla" loans say like ratesetter allows you to merge the problems and spreading your loans become the norm. This is good but you are basically looking in the 4-7% range before defaults some then build in "protection schemes". I hope that helps, now the danger is that because there is data people use it. If I have 1 melon and 1 pea do I really have 2 of my 5 a day? What looks right? Do the work, read this forum.
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Post by propman on Aug 31, 2016 8:49:46 GMT
I agree that these can only provide a starting point from which to do research. But some useful info would include:
1) Net assets of platform compared to loanbook managed 2) date since when platform has consistently exceeded £250k and £1m per week (and possibly 5 and 50 loans a week) 3) Average size of loans made and proportion >£100k and >£1m, largest loan raised. 4) Liquid funds of platform, running costs and latest results 5) Description of nature of loans made and idea of typical split by value 6) Security arrangements for lenders 7) living will arrangements 8) Average default rate on loans run to completion and potentially at mid-point. 9) Platforms performance of bad debts against expectations at inception by year 10) Existence of SM, availability of selling at discount / premium and fees 11) basic SWOT analysis 12) jurisdiction of lenders and borrowers 13) proportion of loanbook held by institutions 14) rates offered and fees charged to borrowers as percentage. 15) what proportion of loans are secured, valuation methodologies allowed and LTV
As you can see, more than one table. perhaps separate sections for history, performance, platform security and offering.
- PM
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Post by Deleted on Aug 31, 2016 10:28:11 GMT
I'd like the free cash of the Portal business and the cash burn every 6 months, but I very much doubt I'd get it |
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Post by jordan on Sept 13, 2016 21:17:11 GMT
Hi everyone, This forum has been invaluable for doing the due diligence research when investing into various platforms but I have also come across several p2p comparison websites such as 4thway, Fundshare etc. So I wanted to ask the crowd as to whether others find these useful? And if one had to write a wishlist for the tools you would need to create a diversified p2p portfolio, what would it be? Thanks in advance Hi Astro1900, We have been developing a P2P focused comparison service for some months, feel free to browse and feedback at your leisure. Currently, Orca Money is developing dashboard tools that dissect the loanbooks of platforms - something IFAs certainly require, but also many retail investors. Great to hear about requirements and requests from P2P investors! Keep it coming. Thanks, Jordan
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at helping you with forward looking decision making especially when it is so granular.