littleoldlady
Member of DD Central
Running down all platforms due to age
Posts: 3,045
Likes: 1,862
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Post by littleoldlady on Apr 13, 2017 13:55:18 GMT
Because we implemented a maximum of 0.5% for certain loans - Eg. Invoice discounting loans.
I can now see how your assertion that I would be 50% deployed after a month, regardless of the amount that I had on the platform, is true. That is very helpful - thank you.
I think this should be made much clearer to your members. I have seen several references to people waiting till they get near to 100% deployed before adding new money, however if you want to get a sizeable amount in BM it may be better to bite the bullet, add your target amount, and suffer the cash drag for a month or two. At least we can make our own decisions if we understand how it works. There is nothing about this in the FAQs - I suggest there should be. If I had understood this maybe I would not have liquidated. I thought increasing my holding up to £5k would have just resulted in even more cash lying idle.
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Post by stevefindlay on Apr 13, 2017 14:11:49 GMT
The quickest way to get capital deployed is to deposit all of the funds in one go. This can be improved if you are looking to deploy £10,000+ at a setting of 1%; by starting at half of your amount - £5,000 at a 2% setting. Then, when the 1st part is fully invested, deposit the second portion and move your setting to 1%.
This does impact cash drag - I'll write a piece on this later.
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Greenwood2
Member of DD Central
Posts: 4,397
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Post by Greenwood2 on Apr 13, 2017 14:48:59 GMT
I'm still getting 1% Invoice discounting loans (with a 1% setting) not 0.5% as promised.
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Post by portlandbill on Apr 13, 2017 15:04:44 GMT
Steve, you have pretty much answered every other question on here but you have not really stated why you are not willing to keep old customers that have helped you grow. I understand you do not want new smaller customers and can accept that and can understand your reasoning behind this, however I do not see the reason why current investors can not stay if they wish? and also what is then to stop you in 6 months deciding you only want customers abover £10,000 etc. We have ~200-250 clients with £1,500 or less. We are grateful for every client that has chosen to place their hard earned funds with BondMason. In the interests of transparency: In: - Our fee each year is £15 for each client with £1,500 (or £22.50 in the new fee structure) Out: - On average, we communicate with each client 3-4 times a year. This is typically a couple of email exchanges and 1-2 calls of 30mins-1 hour each - It costs us £2.50 to conduct AML / KYC on each client - There is a cost associated with each deposit and withdrawal each client makes - [There is also a cost to acquire each client, but that is a sunk cost for existing clients so irrelevant here] So you can see that the cost of servicing clients below a certain level of capital deployed is simply uneconomic based on the actual level of client servicing that has been required (we lose money at the gross margin level as a business on all of these clients - regardless of whether they are existing or new). In the thread above we shared the options open to us to enable us to continue to service as many clients as possible, which culminated in the £5k min and fee change. Our revised fee structure should enable us to retain the £5k minimum forever after. I understand the frustration of existing clients, and if there was a way we could sensibly keep everyone, we would. I think they only way would be to offer an alternative product - a black box rather than a transparent box - which gives rise to the potential for fewer questions. But we aren't in a position to do this today. I think you'll lose clients, or at least fail to grow as big as you could have I only considered investing because I could dip my toe with an initial £1000 (which I actually thought was more than enough for a trial), and then increase my investment if things went well. As it turns out, |i won't now get that opportunity so I will have to liquidate with you (and find somewhere else to put that £1000 plus all my investment that is now coming out of SS).
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adrianc
Member of DD Central
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Post by adrianc on Apr 13, 2017 15:37:20 GMT
portlandbill is right - I'm happy for a £1k toedip in a new platform that looks promising, before ramping up if I'm happy. £5k is more of a footdip, and a stretch too far.
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Post by d_saver on Apr 13, 2017 18:46:33 GMT
The quickest way to get capital deployed is to deposit all of the funds in one go. This can be improved if you are looking to deploy £10,000+ at a setting of 1%; by starting at half of your amount - £5,000 at a 2% setting. Then, when the 1st part is fully invested, deposit the second portion and move your setting to 1%. This does impact cash drag - I'll write a piece on this later. As it happens, in the end, this is what I did. Reset my account to 2%, waited for deployment to reach a certain point, then reset to 1%, then add. As the old ones are paying back, new ones at 1% are taking their place, diversifying further and into what I might consider better loans. Also, please correct me if my thoughts are wrong though, in building from here it seems that trickling in money once you have reached a certain level might be a valid plan to grow the account rather than lump sums. For instance, 20k on a 1% setting is £200 chunks. Assuming you can find a few quality loans each month (value not being a problem, qty of loans being the issue), growing your account by adding £600 chunks, or 3 x 1% of your account or so should ensure quick investment in decent loans and minimal cash drag? BM is the type of account you can set and forget. A standing order or regular monthly savings would seem a sensible option? (though I realise this is not good for deployment in the early stages)
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Post by stevefindlay on Apr 13, 2017 19:22:17 GMT
I'm still getting 1% Invoice discounting loans (with a 1% setting) not 0.5% as promised. There are a very small number of Invoice Discount loans, where both the seller and debtor have very good credit ratings, and the 0.5% setting is adjusted to 1%. An illustrative example would be where the government is the debtor and the seller is a large organisation, where the services are undisputed and the invoice is verified. But these are a few exceptions.
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Post by stevefindlay on Apr 13, 2017 19:26:44 GMT
portlandbill is right - I'm happy for a £1k toedip in a new platform that looks promising, before ramping up if I'm happy. £5k is more of a footdip, and a stretch too far. I understand and have sympathy for this. A footdip for one person may be a toedip for someone else (or a belly flop for someone else...). We recognise we will be catering for fewer potential clients going forwards.
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baz657
Member of DD Central
Posts: 500
Likes: 189
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Post by baz657 on Apr 13, 2017 21:00:12 GMT
stevefindlay - can I ask roughly how many <£5k clients there are, and roughly what proportion of the total client base they represent? Quite a few less then at the beginning of the week. We may have been small fry but they've bitten the hands that fed them from the start.
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Post by df on Apr 13, 2017 22:03:31 GMT
Steve, you have pretty much answered every other question on here but you have not really stated why you are not willing to keep old customers that have helped you grow. I understand you do not want new smaller customers and can accept that and can understand your reasoning behind this, however I do not see the reason why current investors can not stay if they wish? and also what is then to stop you in 6 months deciding you only want customers abover £10,000 etc. We have ~200-250 clients with £1,500 or less. We are grateful for every client that has chosen to place their hard earned funds with BondMason. In the interests of transparency: In: - Our fee each year is £15 for each client with £1,500 (or £22.50 in the new fee structure) Out: - On average, we communicate with each client 3-4 times a year. This is typically a couple of email exchanges and 1-2 calls of 30mins-1 hour each - It costs us £2.50 to conduct AML / KYC on each client - There is a cost associated with each deposit and withdrawal each client makes - [There is also a cost to acquire each client, but that is a sunk cost for existing clients so irrelevant here] So you can see that the cost of servicing clients below a certain level of capital deployed is simply uneconomic based on the actual level of client servicing that has been required (we lose money at the gross margin level as a business on all of these clients - regardless of whether they are existing or new). In the thread above we shared the options open to us to enable us to continue to service as many clients as possible, which culminated in the £5k min and fee change. Our revised fee structure should enable us to retain the £5k minimum forever after. I understand the frustration of existing clients, and if there was a way we could sensibly keep everyone, we would. I think they only way would be to offer an alternative product - a black box rather than a transparent box - which gives rise to the potential for fewer questions. But we aren't in a position to do this today. Steve, thank you for transparency and also for giving a very reasonable notice and fair choice of options. I've only been investing through BM for 4 months, but so far my experience was positive (incl. the speed of investment). I will have to leave the platform because 5k minimum at 6.5% return wouldn't fit comfortably in my P2P portfolio. I will leave with no frustration, but with thanks for the good service you've provided. I'm considering option3. Am I correct thinking that I don't need to take any action if I go for this option?
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Post by lionelrichtea on Apr 13, 2017 22:41:22 GMT
A bit sad to leave, but £5k minimum and an extra 0.5% in fees is a bit too much for me. Liquidated quicker than a Nutribullet and back into my bank account the day after. Thank you Steve and the gang for the great customer service, I wish your company well.
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jcb208
Member of DD Central
Posts: 838
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Post by jcb208 on Apr 14, 2017 7:28:59 GMT
Such a shame they have changed the criteria. I registered a few weeks ago and was about to start investing as I liquidate from lendy.Sorry but I will not be doing this now as I can only drip feed as funds become available
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TheDriver
Member of DD Central
Slightly bonkers
Posts: 493
Likes: 190
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Post by TheDriver on Apr 14, 2017 7:45:42 GMT
The quickest way to get capital deployed is to deposit all of the funds in one go. This can be improved if you are looking to deploy £10,000+ at a setting of 1%; by starting at half of your amount - £5,000 at a 2% setting. Then, when the 1st part is fully invested, deposit the second portion and move your setting to 1%. This does impact cash drag - I'll write a piece on this later.
The optimum funding strategy seemed fairly obvious to me when I read up on BM policies so this is exactly what I did, coincidentally at the figures mentioned! Nice to see it confirmed here; however, nearly 3 weeks in I'm not exceptional in still being only 40% deployed (which doesn't bother me in itself), but there's a refusal by the publicity bods to officially recognise this despite stevefindlay's admission on here it might take 56+ days.
However, my main concern now is the haste to jettison smaller investors; I can't see why there's much admin for established members unless account management is hands-on, which given the timescale suggests an imminent reduction in resources. Allied to the significant hike in fees, it suggests BM are financially constrained. I don't suppose there's any way to discern this until it's too late!?!
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nush
Member of DD Central
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Post by nush on Apr 14, 2017 9:11:58 GMT
how long does it take to liquidate funds, ive only just started the ball rolling but just wondered when it would be worth checking in again
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hantsowl
Member of DD Central
Posts: 672
Likes: 546
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Post by hantsowl on Apr 14, 2017 9:21:43 GMT
I have likewise just begun liquidation and a message was displayed indicating that it may take up to 28 days. Not sure whether that will include loans in default or on the watchlist which may take considerably longer. Mmmmm...I wonder if fees will still be payable for these dodgy loans which may prove difficult to dispose of.
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