nrw
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Post by nrw on Jun 2, 2017 8:33:40 GMT
I recently opened an AC account.
I deposited £5k into the GBBA and £5k into the GEIA to dip my toe in the water. My funds started deploying extremely slowly, indicating that the marketplace enjoys surplus capital but not enough loans.
I then attempted to withdraw the small amount that had deployed (~£3k). >24 hours later and >£1k remains deployed. On investigation, it appears that one GEIA £250 loan has run into trouble (with a couple of days of me purchasing, sweet), but what about the remainder?
This is ringing alarm bells for me. If I am unable to buy and unable to sell in the market, then something is either wrong with the market or I am missing a trick (possible, as it's confusing).
The FCA is pushing marketplace transparency - abolishing safeguard accounts in favour of returns being governed by the underlying loan book. I can see why and fully agree with this - I have substantial funds deployed across multiple platforms and am going to redirect all funds into non-safeguarded accounts (preferably regulated ones).
I spoke to AC this morning and they were unable to confirm why the marketplace appears 'clogged' (ie. why I can neither buy nor sell) nor how long a sale is likely to take.
Can any experienced ACers confirm:
- Why I can neither buy nor sell in these markets?
- How long it's likely to take for my funds to be returned?
- How long it's likely to take for the safeguard fund to pay out in the event that my dodgy £250 loan part turns sour?
Appreciated!
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bg
Member of DD Central
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Post by bg on Jun 2, 2017 9:32:14 GMT
I recently opened an AC account. I deposited £5k into the GBBA and £5k into the GEIA to dip my toe in the water. My funds started deploying extremely slowly, indicating that the marketplace enjoys surplus capital but not enough loans. I then attempted to withdraw the small amount that had deployed (~£3k). >24 hours later and >£1k remains deployed. On investigation, it appears that one GEIA £250 loan has run into trouble (with a couple of days of me purchasing, sweet), but what about the remainder? This is ringing alarm bells for me. If I am unable to buy and unable to sell in the market, then something is either wrong with the market or I am missing a trick (possible, as it's confusing). The FCA is pushing marketplace transparency - abolishing safeguard accounts in favour of returns being governed by the underlying loan book. I can see why and fully agree with this - I have substantial funds deployed across multiple platforms and am going to redirect all funds into non-safeguarded accounts (preferably regulated ones). I spoke to AC this morning and they were unable to confirm why the marketplace appears 'clogged' (ie. why I can neither buy nor sell) nor how long a sale is likely to take. Can any experienced ACers confirm: - Why I can neither buy nor sell in these markets? - How long it's likely to take for my funds to be returned? - How long it's likely to take for the safeguard fund to pay out in the event that my dodgy £250 loan part turns sour? Appreciated! Of course you can buy and sell. To invest in a loan just select browse loans and there are 81 loans available to invest in straight away. To sell you need someone to buy off you. Noone can predict how long that will be but you can look at the amount available of any given loan and it will give you a good guide. Loans with nothing available are likely to sell very quickly indeed (within a day certainly).
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nrw
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Post by nrw on Jun 2, 2017 9:48:15 GMT
I recently opened an AC account. I deposited £5k into the GBBA and £5k into the GEIA to dip my toe in the water. My funds started deploying extremely slowly, indicating that the marketplace enjoys surplus capital but not enough loans. I then attempted to withdraw the small amount that had deployed (~£3k). >24 hours later and >£1k remains deployed. On investigation, it appears that one GEIA £250 loan has run into trouble (with a couple of days of me purchasing, sweet), but what about the remainder? This is ringing alarm bells for me. If I am unable to buy and unable to sell in the market, then something is either wrong with the market or I am missing a trick (possible, as it's confusing). The FCA is pushing marketplace transparency - abolishing safeguard accounts in favour of returns being governed by the underlying loan book. I can see why and fully agree with this - I have substantial funds deployed across multiple platforms and am going to redirect all funds into non-safeguarded accounts (preferably regulated ones). I spoke to AC this morning and they were unable to confirm why the marketplace appears 'clogged' (ie. why I can neither buy nor sell) nor how long a sale is likely to take. Can any experienced ACers confirm: - Why I can neither buy nor sell in these markets? - How long it's likely to take for my funds to be returned? - How long it's likely to take for the safeguard fund to pay out in the event that my dodgy £250 loan part turns sour? Appreciated! Of course you can buy and sell. To invest in a loan just select browse loans and there are 81 loans available to invest in straight away. To sell you need someone to buy off you. Noone can predict how long that will be but you can look at the amount available of any given loan and it will give you a good guide. Loans with nothing available are likely to sell very quickly indeed (within a day certainly). Perhaps I wasn't being clear. I can very slowly buy, and I can very slowly sell. However this doesn't compute to me. Given that there is a lot of automated buying and selling (through the 'aggregated' accounts), then unless it's a perfect market (which it's not) there will be a supply or demand imbalance. For example, Funding Circle and Zopa currently have a cash surplus - therefore if you choose to sell loan parts they immediately get matched (provided they aren't distressed, at which point they can't be listed on the secondary market). However if you choose to invest then funds take a while to deploy, as loan origination is the bottleneck. Doubtless some other platforms have insufficient investor capital - and therefore loans take a while to fund but investor capital is immediately deployed. However, with AC there appears to be surplus on both ends of the market place. Funds take a while to deploy (implying that there is insufficient loan origination), and loan parts take a while to sell (implying that there is a surplus of loan origination). This is where I'm confused, surely it has to be one or the other - given that bots are doing the buying and selling for much of the marketplace (aggregated accounts rather than discretionary ones)?
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Post by GSV3MIaC on Jun 2, 2017 10:26:38 GMT
I Think you're overlooking the matter of WHAT you can/can't buy or sell. For instance on FC their autobid (at par) will basically buy anything, so you can sell anything. You can't buy anything (at par) though. On L/MT there are currently several/many loans you can't sell (nobody is buying those) but there are, at the same time, plenty you can't buy (nobody is selling). Over at ABL (on or the LSE) you can buy/sell most anything, but only because you can (or have to) adjust the prices. AC has some automated buying for GEIA/GBBA etc, but that has criteria about what it'll buy, and what it'll pay, so it isn't necessarily going to soak up your sales, you need a buyer.
If you are saying you can't buy, and can't sell, the exact same loan at the exact same instant, then I would find that a bit strange, and suspect something would be broken..
Most P2P secondary 'markets' are not markets at all, because there is no pricing mechanism to adjust supply/demand for individual items. The result is the current logjam you can see at L, and to a lesser extent, MT.
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skippyonspeed
Some people think I'm a little bit crazy, but I know my mind's not hazy
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Post by skippyonspeed on Jun 2, 2017 10:51:02 GMT
Before giving up on AC completely, you should have a "play" with MLIA. This is the account that AC started with, and is where all my funds are. I prefer this acc. because I have full control.
As I do not use either of the accounts you have selected to use, I can not comment on some of the questions you ask. The MLIA account, as far as I am aware, offers all the loans your 7% accounts offer plus more. The difference being you get a far better return (currently up to 12%), but there is no PF, but if you choose loans with plenty of time left and no monthly payment hiccups, you should have no problems. To buy you just select "Browse Loans" from dropdown menu, there are currently about 80 loans that have spare capacity. Select the loan where you can check activity and see when the borrower made all monthly payments, if you decide to invest just click on the button and type in the amount. The allocation may take a couple of hours because from what I understand the system looks at each loan in turn and does all the trades for that loan before moving onto the next one. Selling takes the same time, you may not get all or sell all in one go, as it depends on demand.
Some of the more attractive loans ie long term, high interest, may take much longer to fill.
The advantage of this system is, you don't have to constantly watch the screen and there is no FFF!
As long as you spread your cash over a wide range you should have no problems. I had 2 that did default, both were high risk high interest (15%) which paid an extra 3% after default. AC recovered 100% inc all interest on both. There are two others known on here as the plumber and the optician which defaulted and so far about 50% capital has been returned, but I don't hold much hope on any more. Diversification and keeping an eye on the activity tabs should be reasonably safe. My average rate is 12.5%, mainly because I do not look at anything below 11%.
To sum up, I think this account may suit you better as the trading part AFAIK gives you more freedom.
Hope this helps.
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Post by bracknellboy on Jun 2, 2017 11:03:44 GMT
nrw as mentioned by others, but I think not explicitely pointed out in what way, you may be confusing what it is you can't buy or sell. Both the GBBA and the GEIA have certain criteria for loans to be eligible for those accounts. So it is entirely feasible to have a situation where there appears to be both a surplus of loans for sale but still have an inability to invest quickly through e.g. the GBBA. That can arise because the loans for sale are not eligible for those accounts. The other potential issue is the rules on diversification in those accounts may be getting in the way of quick deployment.
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nrw
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Post by nrw on Jun 2, 2017 11:18:06 GMT
If you are saying you can't buy, and can't sell, the exact same loan at the exact same instant, then I would find that a bit strange, and suspect something would be broken.. This is the crux of my point. The bot bought loan parts a couple of days ago, ergo those loans met its criteria. It was unable to buy much else, so there weren't enough 'eligible' loans to satisfy bot demand. 24 hours later I attempted to sell those loans. The same bot is no longer purchasing them - and the criteria surely can't have shifted much - yet funds still deploy slowly on the other side of the market. So whilst I'm not trying to buy and sell in the same instant, it's within 24 hours. I'm tempted to set up another account and put buy and sell orders in to see whether they match - my assumption is that they won't. If there is another AC investor out there then we can try it out to dis/prove the theory? [ The other possibility is that the bot executes on highly irregular batches eg. weekly - however this doesn't appear to be the case as some of my loan parts have sold. ]
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nrw
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Post by nrw on Jun 2, 2017 11:26:06 GMT
Before giving up on AC completely, you should have a "play" with MLIA. This is the account that AC started with, and is where all my funds are. I prefer this acc. because I have full control. Thanks for the insight, much appreciated. Can this therefore be run on a *relatively* diversified + low maintenance basis? This is key for me - once I've set it up, I want it to run with minimal maintenance (I'm happy to put in a little time monthly). I don't have the time or inclination to research individual loans, so perhaps a strategy here could be to purchase £x of every currently available loan that hasn't had payment history issues, providing diversification across ~80 loans, and leave it alone? If this earns me 12% then it doesn't sound too bad. I'm less concerned about liquidity - a medium term horizon is fine for me. FWIW I currently have significant sums deployed across Zopa Plus, Property Partner, Advancr, Funding Circle (listed income fund FCIF), LendInvest Capital, Downing Crowd, wiseAlpha - and I'm happy with all of those.
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nrw
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Post by nrw on Jun 2, 2017 11:39:00 GMT
Overall I am somewhat nervous of 'black box' bots where you're not sure how they are working. This offers too much opportunity for the wheels to come off the train.
Zopa Plus is highly transparent - as is Funding Circle. There is clearly a shortage of loans, so funds take a while to deploy. As expected if I list loan parts for sale on either of those platforms, then they immediately sell (provided they aren't distressed). This makes total sense to me. And I get that they won't sell if there aren't enough buyers.
My concern with AC is that apparently there are enough buyers (because invested funds deploy slowly)... except there aren't (because 24 hours later the same loan parts won't sell quickly).
I am repeating the same thing, and hopefully I'm plain wrong!
If I don't understand a market / bot, then when it rains I fear I'll get wet.
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happy
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Post by happy on Jun 2, 2017 11:59:46 GMT
If you are saying you can't buy, and can't sell, the exact same loan at the exact same instant, then I would find that a bit strange, and suspect something would be broken.. This is the crux of my point. The bot bought loan parts a couple of days ago, ergo those loans met its criteria. It was unable to buy much else, so there weren't enough 'eligible' loans to satisfy bot demand. 24 hours later I attempted to sell those loans. The same bot is no longer purchasing them - and the criteria surely can't have shifted much - yet funds still deploy slowly on the other side of the market. So whilst I'm not trying to buy and sell in the same instant, it's within 24 hours. I'm tempted to set up another account and put buy and sell orders in to see whether they match - my assumption is that they won't. If there is another AC investor out there then we can try it out to dis/prove the theory? [ The other possibility is that the bot executes on highly irregular batches eg. weekly - however this doesn't appear to be the case as some of my loan parts have sold. ] You say above the bot is no longer purchasing loans you just bought, lets me try and explain: you invest money into the GBBA The bots sees you available cash and goes to look for some loans that meet the criteris for GBBA (rate, security, LTV) Having found some suitable loans it puts in a buy order Buy order is processed and you now have some investment of your GBBA funds If you subsequently withdraw money from the GBBA the bot will queue your withdrawl request and then attempt to match the loans you hold with buy orders on the market to get a sale If the loans you hold in the GBBA already have units available for sale on the market (highly likely if you only recently bought them) then your sell orders will be pooled with others trying to sell the same parts and this will take some time but is should happen eventually assuming there is a suitable level of demand. In summary, the GBBA & GEIA accounts are not designed as quick in/quick out accounts but they do work ok where people expect to hold their investment for longer periods. I personally have invested and then withdrawn 10s of thousands from the GBBA in the past but it is totally dependant on what is on the market when you buy and who is buying when you try to sell. Hope this helps somewhat
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nrw
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Post by nrw on Jun 2, 2017 12:05:44 GMT
Thanks for the replies.
On digging further, I decided to download my loan book.
On AC's loan book page it tells me that I have £951.97 'Current total lent'. However, when I click the button to download the loan book as a CSV and open it, it's empty and there are no loans. Likewise, under 'Active loans' it tells me 'You have not made any investments yet!'. But I have.
Does everyone else's loan book tally up to the amount displayed on the 'Loan book' page? Am I doing something wrong?
This has stumped me - it all feels a bit wobbly. Or I'm just a bit wobbly.
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sqh
Member of DD Central
Before P2P, savers put a guinea in a piggy bank, now they smash the banks to become guinea pigs.
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Post by sqh on Jun 2, 2017 12:17:40 GMT
nrw Not many of the loans available are eligible for the GBBA. You would have been allocated some of these, but the algorithm would try to give you a much wider spread of loans. That would take a while. You then tried to sell, but you have mainly loans which other lenders already have. When your GBBA account has been running a few weeks or months, it should be much more liquid. New loans will become available and new GBBA accounts will want loans that your holding. EDIT: I think you have been very unlucky with the GEIA. I presume it's loan 437 that is the problem. It's not the first WT to miss the pre-accredited FIT rate, but I think there has always been a satisfactory resolution.
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happy
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Post by happy on Jun 2, 2017 12:20:43 GMT
Your GBBA loans are hidden in a seperate pool. The GBBA is designed to be black box and therefore for investors to not be concerned with what they hold. However, if you want to see what you have you need to look at the transaction statement for the GBBA and you can then download this to excel and then you need to add all the buys and sells for each loan to see you current holding.
Unfortunately when you have had the GBBA for some years this can get quite tiresome but it is the only way.
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Post by paulh on Jun 2, 2017 12:23:04 GMT
The "Active Loans" page and the corresponding CSV download only shows loans that you've manually picked (via MLIA). It doesn't show stuff that's been picked for you by the robots looking after GBBA/30DA/QAA etc).
At least that's what it looks like in my account.
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Post by pepperpot on Jun 2, 2017 12:23:04 GMT
GBBA is intended as a black box account for the hands off investor and works best for funds you don't require back on short notice. Sounds like you might be more comfortable in the MLIA where you are supposed to pick/choose/diversify to whatever level you require. The loan book download shows what you hold / have instructions on, in MLIA.
Purely personal opinion - Having grown up with AC, I think it's one of the least 'wobbly' platforms.
edit; crossed with above posts.
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