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Post by chris on Aug 18, 2017 8:41:15 GMT
But exactly the same is true for MLIA investors with no free cash so the principle stands, as to whether it is fair, then that argument can be made but what is undoubtedly true is that it is a change from the previous system where MLIA got a ring fenced % & it is fairly obvious that the new system is far worse in terms of MLIA allocations than the previous one. Previously that system was used to ensure availability for the GBBA and especially the GEIA. Some management was done to balance that with MLIA demands, but in general the MLIA was not the beneficiary. That strategy was stopped 8 months ago so this isn't a new change for this loan. And I agree that the same is true for MLIA investors, but that is precisely why the approach of having one market with equal priority should be the right one rather than carving out special cases for the MLIA. If there are 200 investors why should 100 of them be singled out for a bigger share just because they invested via one route and not another? In this case even with just the MLIA the loan is over subscribed by a factor of 5 so you're going to be disappointed and complaining about the allocation even if the MLIA took 100% of the loan. The wider issue is why this loan & any like it are going anywhere near the QAA at all? Investors in the collective accounts need 3 things; 1. The headline rate promised in the glossy marketing, 2. The implicit liquidity promise & 3. The protection offered from the PF - everything else in terms of which loans they theoretically invested in is secondary (in fact used to be impossible to find out). There are currently plenty of 7/8/9% loans on the SM & in the pipeline to satisfy the demand from these collectively accounts so whilst that is the case any double figure interest rate loans really ought to be distributed to the MLIA, as a reward for them choosing higher risk options & forsaking the PF etc. It could be argued that allocations should be split 50/50 with GBBA/GEIA or even the equal shares policy currently used but with both these methods many investors would get double allocations which can be argued as unfair. It should come as no surprise that there is far more demand in the non - MLIA sectors as a direct result of the ongoing successful marketing campaigns & that should be welcomed - long term platform growth & success is good for all, not least for those of us who have equity stakes! However it is clear that some MLIA investors are unhappy, not just with miserly allocations but also that relevant loan Q&A's are routinely deleted, that e-mail enquiries go unanswered for weeks, communications in general could be significantly improved & system improvements often leave them worse off than before. Repeated warm words about maintaining & developing the MLIA are admirable but "by your actions shall ye be judged" & whilst customer feedback is often dismissed by firms that think they know better I believe it gives valuable information of how any business looks from the outside looking in rather than the oft rose tinted view looking the other way. I've had an open offer for a very long time to review any Q&A deletions that lenders feel were unfair and I've yet to have one sent to me that didn't breach the rules. There have perhaps been one or two where I felt we could have handled it better but for the most part the Q&A deletions are for the right reasons. I'm not aware of any email enquiries going unanswered for weeks, beyond one raised with me yesterday, if that's the case then let me know the specifics and I can chase them up. "Miserly" loan allocations are a factor of supply and demand from the existing lender base vs the direction our credit policy and pricing are heading. stuartassetzcapital has set out elsewhere our thoughts on where the market is heading and how we consciously and explicitly do not want to be targeting the higher risk end of the market at the current point of the credit cycle. Credit policy / pricing drives the loans we offer on the platform, marketing strategy and the accounts we offer then target lenders who wish to invest in those loans. The MLIA can invest in every single loan on the platform and you get a rate uplift on every loan for investing directly yourself without PF protection. I disagree with your reasoning that some loans should be ring fenced for the MLIA. Indeed #527 is the only drawn loan on the platform that has yet to have an MLIA holding in it, and that will be allocated soon. However it's a given that this unfortunately alienates some lenders who disagree with our chosen path and whom wish for higher returns for higher risk (although do not seem to like it when those risks become realised) but that is unavoidable and there are other platforms available who do target those lenders and that class of loan. If those platforms are a more suitable home for your funds then that's a shame but the strategy we're following at the moment is borne from lessons learnt in the past, careful study of the vast amounts of data we have collected, actual results from our marketing campaigns, and our view of where the markets are headed all combining to give us the long term strategy we think is right to build a long lasting high quality platform where lenders are happy to invest their funds. We do listen to the forum, there are a number of unavoidable reasons why we don't post here very much any more but myself and a couple of other directors read most of what is posted and this is factored into our thinking.
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Post by Butch Cassidy on Aug 18, 2017 9:06:24 GMT
"why the approach of having one market with equal priority should be the right one rather than carving out special cases for the MLIA. If there are 200 investors why should 100 of them be singled out for a bigger share just because they invested via one route and not another?"
Because investors with both a GBBA & MLIA get 2 allocations of scarce loans, MLIA investors take the full risk of default with no PF protection & rely on market liquidity to sell not just transferring a holding to other members of the same collective account. Many MLIA investors were the very people who supported AC in the days when that support was vital to ensure the success of the platform & loyalty is a characteristic worth rewarding, the direction of "safer loans, lower return" that AC are currently pursuing (quite reasonably in my view) means that the number of loans worth holding via MLIA, as opposed to just taking 7% with the associated safeguards, are few & far between so to keep it alive it needs some feeding.
"In this case even with just the MLIA the loan is over subscribed by a factor of 5 so you're going to be disappointed and complaining about the allocation even if the MLIA took 100% of the loan." - Something is better than nothing, who decides when & how much will be released from the grips of the QAA? Why can't drawdowns be given directly to MLIA/GBBA/GEIA under whatever allocation system - why go through QAA at all?
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Post by chris on Aug 18, 2017 9:11:57 GMT
MLIA £0.00, GBBA £0.00, QAA £0.06, 30-DAA £1.67, 30-DAA promo £0.10. Makes sense - 'Matrix' decides what is the most cost effective way to fill up the loan. Assuming df had cash in all five accounts and there is only one df per account and if what chris is correct about everyone getting an equal allocation why are these these amounts not equal? Am I missing something? QAA / 30DAA / 30DAA promo account all have a directly proportional split based upon the amount df has invested in each. Nothing has been released to the market yet so the loan is still in its state at the point where it's drawn down, where it was underwritten by the access accounts. When the loan is released to the market the split will be equal amongst all lenders and accounts looking to invest.
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ding
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Post by ding on Aug 18, 2017 9:15:41 GMT
Hi chrisIf the allocation policy worked as you say I would be ok with that. But I do think Assetz should be more open about how the magic machine works (and I don’t mean buried in a 50 page T&C). It's great you tell us on this board, but in the greatness of time it will be lost. It really should be on your web site. To date I’ve received £NIL for #527 in my MLIA. My buy instruction is dated 11th August. I thought I received £NIL on drawdown from another MLIA. Still waiting a reply from customer service (follow up) from 8th August. 10th August I queried interest on 30day promotion – no response from customer service. |
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Post by chris on Aug 18, 2017 9:20:13 GMT
"why the approach of having one market with equal priority should be the right one rather than carving out special cases for the MLIA. If there are 200 investors why should 100 of them be singled out for a bigger share just because they invested via one route and not another?"
Because investors with both a GBBA & MLIA get 2 allocations of scarce loans, MLIA investors take the full risk of default with no PF protection & rely on market liquidity to sell not just transferring a holding to other members of the same collective account. Many MLIA investors were the very people who supported AC in the days when that support was vital to ensure the success of the platform & loyalty is a characteristic worth rewarding, the direction of "safer loans, lower return" that AC are currently pursuing (quite reasonably in my view) means that the number of loans worth holding via MLIA, as opposed to just taking 7% with the associated safeguards, are few & far between so to keep it alive it needs some feeding.
"In this case even with just the MLIA the loan is over subscribed by a factor of 5 so you're going to be disappointed and complaining about the allocation even if the MLIA took 100% of the loan." - Something is better than nothing, who decides when & how much will be released from the grips of the QAA? Why can't drawdowns be given directly to MLIA/GBBA/GEIA under whatever allocation system - why go through QAA at all? Yes investors with two accounts get two allocations. In theory we could change the system so that it was a per lender allocation but that opens up other cans of worms such as deciding the split between the two accounts and how people would like to influence that. Even with your explicit carving up of the loan with different sections for different accounts that still holds true. There probably isn't a perfect approach and there are no plans to change the way the system works at the moment. MLIA investors take the full risk and rely on market liquidity but in return they gain a higher rate. GBBA / GEIA investors also rely on market liquidity but they get a higher rate than the access accounts. All loans are currently underwritten still via auction, often by the QAA sometimes by other underwriters as well. It's more a legacy of how the platform grew up and whilst somewhat of an anachronism it hasn't been a priority to update that process to something else. There's a manual step required to release those initial QAA holdings to the market, the timing of which is determined within the credit / ops team. I'll give them a nudge on this loan.
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oldgrumpy
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Post by oldgrumpy on Aug 18, 2017 9:20:54 GMT
I think it will be a wise move for AC to indicate promptly on each drawn down loan, while it is 100% "waiting" in the QAA, that allocation to other accounts is pending, and maybe a date when this allocation is likely to be completed. That will reassure lenders that an apparent zero allocation is temporary, and a lot of this "noise" will not be repeated ............... much.
(cross posted with Chris)
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Post by chris on Aug 18, 2017 9:22:00 GMT
Hi chris If the allocation policy worked as you say I would be ok with that. But I do think Assetz should be more open about how the magic machine works (and I don’t mean buried in a 50 page T&C). It's great you tell us on this board, but in the greatness of time it will be lost. It really should be on your web site. To date I’ve received £NIL for #527 in my MLIA. My buy instruction is dated 11th August. I thought I received £NIL on drawdown from another MLIA. Still waiting a reply from customer service (follow up) from 8th August. 10th August I queried interest on 30day promotion – no response from customer service. August has been tough on the customer service team where, due to holidays and long term sickness, instead of having 4 people working there I believe we're currently down to 1. If you could PM me the details of those emails I'll chase them up for you.
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Post by Butch Cassidy on Aug 18, 2017 10:02:00 GMT
"why the approach of having one market with equal priority should be the right one rather than carving out special cases for the MLIA. If there are 200 investors why should 100 of them be singled out for a bigger share just because they invested via one route and not another?"
Because investors with both a GBBA & MLIA get 2 allocations of scarce loans, MLIA investors take the full risk of default with no PF protection & rely on market liquidity to sell not just transferring a holding to other members of the same collective account. Many MLIA investors were the very people who supported AC in the days when that support was vital to ensure the success of the platform & loyalty is a characteristic worth rewarding, the direction of "safer loans, lower return" that AC are currently pursuing (quite reasonably in my view) means that the number of loans worth holding via MLIA, as opposed to just taking 7% with the associated safeguards, are few & far between so to keep it alive it needs some feeding.
"In this case even with just the MLIA the loan is over subscribed by a factor of 5 so you're going to be disappointed and complaining about the allocation even if the MLIA took 100% of the loan." - Something is better than nothing, who decides when & how much will be released from the grips of the QAA? Why can't drawdowns be given directly to MLIA/GBBA/GEIA under whatever allocation system - why go through QAA at all? Well yeah but don't (us) MLIA holders get more interest to compensate? Only on certain loans; GBBA/GEIA set the risk/reward bar at 7% + PF protection + implicit ability to sell out (even when technically holding suspended loans) which means depending on your risk assessment it only becomes feasible (i.e. when benefits outweigh drawbacks) to hold loans of 9/10%+ via MLIA below this GBBA/GEIA makes more sense. Now competitive market pressure is driving down rates, meaning such loans are becoming less frequent twinned with rising investor demand but that makes what happens to such loans very important. Disappearing into the QAA when they could be distributed to eager investors, of whichever accounts, is not ideal but given the highly selective few loans that are now attractive for the MLIA any allocation is not just welcome but essential to keep alive hope of any investment. Especially when rival platforms are issuing plenty of loans at higher rates that are equally as safe as anything on AC.
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Post by chris on Aug 18, 2017 10:44:06 GMT
Well yeah but don't (us) MLIA holders get more interest to compensate? Only on certain loans; GBBA/GEIA set the risk/reward bar at 7% + PF protection + implicit ability to sell out (even when technically holding suspended loans) which means depending on your risk assessment it only becomes feasible (i.e. when benefits outweigh drawbacks) to hold loans of 9/10%+ via MLIA below this GBBA/GEIA makes more sense. Now competitive market pressure is driving down rates, meaning such loans are becoming less frequent twinned with rising investor demand but that makes what happens to such loans very important. Disappearing into the QAA when they could be distributed to eager investors, of whichever accounts, is not ideal but given the highly selective few loans that are now attractive for the MLIA any allocation is not just welcome but essential to keep alive hope of any investment. The MLIA rate is always higher than those offered in those other investment accounts. If loans are offered to the MLIA at 7% then they wouldn't be taken up by the GBBA / GEIA, although the PSIA may take them, as there wouldn't be anything going into the PF. If we only offered loans at those rates then GBBA / GEIA would eventually be shuttered due to lack of loans and a growing wall of cash, but the MLIA would survive as it still has access to those loans. I still maintain that the problem is that AC no longer originates enough loans at the rates you personally wish to earn and thus you are looking for solutions for that plight, whereas AC is just drifting away from you as a customer. That's just an unfortunate side effect of where we're heading vs your personal investment choices. Especially when rival platforms are issuing plenty of loans at higher rates that are equally as safe as anything on AC. Time will tell but we disagree. Take Lendy / SS as an example of the trajectory we were being encouraged to follow and that we actively avoided due to foreseeable problems. Base on Alt-Fi data for the last 90 days the only P2P platforms that are originating more loans than AC are FC, Z, and RS.
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Post by chris on Aug 18, 2017 10:46:05 GMT
I've just been corrected on the customer services front and been told that due to a couple of new starters the team is now back to full strength. I'm sure they're working through any backlog and I've personally chased the one case that was PMd to me.
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Post by oldnick on Aug 18, 2017 11:16:39 GMT
Given the narrowing margin between the GBBA rate and the majority of recent loans I can only speculate that some higher rate loans are helping to bolster the provision fund. But, given that higher rates are to compensate for higher risk, the impact should be neutral in the long run.
The QAA is proving to be an irresistibly reliable and biddable underwriter, so we can hardly blame AC for that - they've got a business to run efficiently for us shareholders.
My take on 'rewarding loyal early starters' is that I received my reward during that phase in direct proportion to the support I provided at the time - by way of higher returns.
Yes, I would like there to be higher risk loans available on the platform, in addition to the current lower risk crop, and if possible for them to be available to the MLIA first - different loan streams for different risk appetites. But assessing the risk is a tricky business requiring much due diligence, and even then... . Bad loans do nothing to burnish the company image, and take up a lot staff time, so, as a shareholder, I bow to Management on that one.
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Post by Butch Cassidy on Aug 18, 2017 11:50:18 GMT
Given the narrowing margin between the GBBA rate and the majority of recent loans I can only speculate that some higher rate loans are helping to bolster the provision fund. But, given that higher rates are to compensate for higher risk, the impact should be neutral in the long run. The QAA is proving to be an irresistibly reliable and biddable underwriter, so we can hardly blame AC for that - they've got a business to run efficiently for us shareholders. My take on 'rewarding loyal early starters' is that I received my reward during that phase in direct proportion to the support I provided at the time - by way of higher returns. Yes, I would like there to be higher risk loans available on the platform, in addition to the current lower risk crop, and if possible for them to be available to the MLIA first - different loan streams for different risk appetites. But assessing the risk is a tricky business requiring much due diligence, and even then... . Bad loans do nothing to burnish the company image, and take up a lot staff time, so, as a shareholder, I bow to Management on that one. That's a fair point & personally as a lender we drifted apart a couple of years back, so whilst I still have a decent legacy portfolio I only keep active on the platform largely through a shareholders eyes but still expect to find an efficient, honest, professional outfit that demonstrates good communication & rapid customer service. As I have repeatedly said I rate the senior management & think the business model will be a success & it is one of the few platforms that I would be comfortable being a shareholder in, however where there are failings & room for improvement I won't be afraid to highlight them.
Hopefully one point we can all agree on is that risk assessment is rather like beauty, often gauged in the eye of the beholder, solid double digit returns are possible with most asset classes across many platforms but do not come without risk but conversely low return doesn't always equate with low risk.
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dave2
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Post by dave2 on Aug 18, 2017 13:01:04 GMT
Butch Cassidy wrote ...#527 however has been drawdown yesterday & given 100% to the QAA;...
wysiati wrote MLIA allocation £0.00
Have you received your allocation for #527 yet?
MLIA £0.00, GBBA £0.00, QAA £0.06, 30-DAA £1.67, 30-DAA promo £0.10. Makes sense - 'Matrix' decides what is the most cost effective way to fill up the loan. Yaay! Got myself £8.26 worth of #527 in my MLIA account a couple of hours ago.  Sorted.
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ding
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Post by ding on Aug 18, 2017 13:55:36 GMT
Yaay! Got myself £8.26 worth of #527 in my MLIA account a couple of hours ago. Sorted. There are quite a few topics though this thread. I got the same allocation. I had assumed once a loan was moved from 'upcoming' to 'live' that you would get your allocation then. There is no way to tell if you got it at drawdown or it was sold by someone else. So no way for me to tell if the magic machine is working within tolerance.
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Mike
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Post by Mike on Aug 18, 2017 13:57:50 GMT
Is it known for sure that GBBA and GEIA can trade distressed/suspended loans? My understanding was that only applied to the fast access accounts.
The answer might provide a lot of valur
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