teddy
Posts: 214 
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Post by teddy on Jun 8, 2017 16:29:04 GMT
THIS INVESTMENT ACCOUNT IS PROTECTED BY A DISCRETIONARY PROVISION FUND
The Discretionary Provision Fund aims to provide protection from any missed interest or capital repayments. Read more
Discretionary Provision Fund aiming for 5% bad debt coverage.chris above is for PSIA. Does this mean a) 5% of value of all loans in the account or b) 5x expected bad debt or c) 5% of expected bad debt? So if loan values are say £100m with expected bad debt of £2m then is the PF aiming to be a) £5m b) £10m or c) £100,000. As worded it would seem c). Or possibly a). However, comparing with the format for other accounts it would be b). Please could you clarify? Surely it must mean 5% of the value of all loans on the account. A PF that could only cover 5% of expected bad debt would more pointless than a broken pencil.
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Post by bracknellboy on Jun 8, 2017 17:30:57 GMT
A PF that could only cover 5% of expected bad debt would more pointless than a broken pencil. I think on a election day a broken pencil makes quite a point....
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nush
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Post by nush on Jun 12, 2017 11:02:07 GMT
is this account slowly emptying the other two 7% accounts. starting to look like another race to the bottom
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Post by df on Jun 12, 2017 19:14:37 GMT
is this account slowly emptying the other two 7% accounts. starting to look like another race to the bottom I doubt it. I think they introduced it to fill the gap for auto-investment range, I don't think property investments are eligible for GB and Green??? However, I'm not sure how successful this new account will be - investing in property loans at 5.5% is not worth the risk (even with PF 'safeguard') whilst there are plenty of property loans on the market paying twice as much.
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nush
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Post by nush on Jun 12, 2017 19:19:59 GMT
thanks, just my two 7% accounts are starting to build up with un invested funds.
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Post by bobthebuilder on Jun 12, 2017 21:38:36 GMT
is this account slowly emptying the other two 7% accounts. starting to look like another race to the bottom I doubt it. I think they introduced it to fill the gap for auto-investment range, I don't think property investments are eligible for GB and Green??? However, I'm not sure how successful this new account will be - investing in property loans at 5.5% is not worth the risk (even with PF 'safeguard') whilst there are plenty of property loans on the market paying twice as much. Property investments most definitely ARE eligible for the GBBA. In fact I would think that more of my GBBA positions are in property bridging or development loans than in anything else. I’ve been told by Customer Services at AC that the eligibility criteria for inclusion in the GBBA are: 1. Must have property security 2. Maximum LTV 75% 3. 8% minimum interest rate if LTV is less than 55%, or 9% minimum interest rate if LTV is in the range 55% - 75% 4. Exception is development loans where LTGDV is substituted for LTV. They cited #441 as an example. “Funds advanced Day 1 = £2.735million vs GDV of £6million, therefore the valuation ratio used by the mandate was 46%. As such, with a rate of 8% and a valuation ratio below 55%, the loan qualified for the account. When we get to the point, because further funds have been advanced, where the valuation ratio exceeds 55%, this loan will cease to qualify for the GBBA as the interest rate would need to be 9% or higher. This is unique to Development Loans because of the way the funds advanced change throughout the development period.” There’s also a target of allocating no more than 20% of your GBBA funds, including uninvested funds swept to the QAA, to a single loan. ---------------------------------------------------------------------------------------------------------------------------------------- On these criteria I can see no justification for the GBBA selling down my position in #391, and the fact that it has done so in my view lends considerable credibility to the conspiracy theory that GBBA lenders are seeing their loan diversification reduced and their average risk level increased by having their less risky loans transferred to the PSIA.
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Post by BrianC on Jun 29, 2017 13:16:33 GMT
Anyone got any idea how long has it been taking to match deposits in this account?
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liso
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Post by liso on Jun 29, 2017 13:43:42 GMT
I deposited a few hundred this morning and it was all matched within 4 hours.
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dermot
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Post by dermot on Jun 29, 2017 15:24:29 GMT
Anything I've put in gets matched within an hour or two.
I suspect this new account is a source for funding a lot of the 7 - 8% that AC have been taking on recently.
I have a few £K in it it, useful for a bit of diversification, if nothing else. I'm using it for a home for funds that I don't need for a few months, whereas I use 30DAA and QAA for funds that I *might* want to get hold of in a bit shorter term.
It is, after all, only 1% or so below BM (given the increase in fees and that fees come out of taxed income) and has a degree of protection from a PF (though that is only a modest part in my decision to park some cash there).
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Post by elephantrosie on Jun 30, 2017 0:39:27 GMT
what fees are you referring to?
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Post by df on Jun 30, 2017 3:34:40 GMT
what fees are you referring to? He is referring to Bond Mason. They charge 1.5% fee, which makes the return only 1% above PSAI. I don't invest in PSAI and almost got out of BM, but I can see how PSAI is a better option out of two.
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jonah
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Post by jonah on Jun 30, 2017 4:58:20 GMT
Not least as you, as I understand it, pay tax on the fee (as you pay tax on the interest before the fee is deducted) reducing the gap by 0.3/0.6/0.675%.
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savernake
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Post by savernake on Jun 30, 2017 11:39:41 GMT
I'm currently comparing the PSAI with BM. Whilst I like the presence of Assetz Provision fund (albeit 'discretionary'), I'm put off investing in any of the AC automatic accounts due to what I see as a lack of adequate diversification.
I understand from reading other posts on this forum that you could end up with 20% of your funds in just one single loan. Is this correct? If so, I am uncomfortable with this level of risk, and why BM's 1-2% loan diversification is looking more attractive - even without a PF.
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jlend
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Post by jlend on Jun 30, 2017 11:58:53 GMT
Interesting that they may charge for withdrawals from this account in the future
"No fee for withdrawals, although this may change in the future with notice provided at that time"
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Post by df on Jul 1, 2017 1:48:34 GMT
I'm currently comparing the PSAI with BM. Whilst I like the presence of Assetz Provision fund (albeit 'discretionary'), I'm put off investing in any of the AC automatic accounts due to what I see as a lack of adequate diversification.
I understand from reading other posts on this forum that you could end up with 20% of your funds in just one single loan. Is this correct? If so, I am uncomfortable with this level of risk, and why BM's 1-2% loan diversification is looking more attractive - even without a PF. You could end up with 20%, but I don't think this is the norm, it mainly depends on availability of loans matching the criteria specific to the account. I've never attempted to calculate how diversified I am in GB&Green, it would be very time consuming and pointless exercise. 20% sounds bad, but it is not detrimental if you are adequately diversified across platforms. I've had good experience with BM so far, it does that is promise. Leaving it because new T&C don't sit comfortably in my p2p portfolio (too many 'taboos' for 6.5% return platform).
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