Lending Changes to FC

Yes, you're right GSV. I had been expecting this change but had also expected to be able to sell manually to dispose of the loans I have bought manually. Mine is all property and very poorly diversified, and so holding on to the point of one repayment left is too much of a risk. So I have to sell loads before 18th Sept, to give myself a few months after 18th Sept before I sell the rest. I could think that the purchasers under the new scheme will be properly diversified, and that there is nothing dodgy about property parts with one month to go.

However, it has been noted that the risk profile of the property loans is very different from that of the SMEs, in that for property it is hugely end-loaded, and exploiting this is unfair and must be stopped, like flipping the risky SME loans, and selling loans which have been late but recovered. We must all, weak and strong, hold hands and cross the finishing line together in the new FC, fit for consumer lenders with ISAs. Understandable but sad.

 ......unfortunately I don't think autobid has an opinion

Autobid and the people that use it certainly does have an opinion. Which is that just getting a diversified portfolio is better than trying to pick out individually what is or isn't a good credit risk. 

And they are almost certainly right. Certainly when it comes to shares there is massive evidence that trying to stock pick and beat the market is basically pointless. 

Anyway we're going on a bit of a tangent here. Maybe this is what i'll use my newfound hour or two now i won't be bidding on FC. Arguing / debating pointlessly on internet forums....

I'm now totally out, well apart from the Tewkesbury property loans, but thats another story.........


Gadget makes a good point, some people want to spend more time on their investments, and therefore get a better return, others just want the 'balance managed' portfolio, that gets them a better return than the bank, this option is now being taken away, which will suit some but not others. Personally I like to spend a bit longer as the compounded effect of the few extra percent makes a difference.


I have watched the returns go down over time on FC as it gained in popularity, but as they say, when everybody else wants to get in, its time to get out.

Surely net repayment is not the same as net lender withdrawal. They did not have many new PL loans yesterday and so there would be a net increase in available funds. This would be a good plan if they were expecting a jump in SM trading - for every seller there has to be a buyer. (I sold about £20k and did make withdrawals).

From a personal perspective, I am gutted that FC are changing the game.  But looking at the bigger picture I completely understand why they have done so, and I agree that it will make FC much fairer for all rather than benefiting the few. I've had a good ride over the years with a strategy that involves a fair bit of flipping ("boo, hiss the villain") but now I'll have to find a way to maximise my returns under the new rules (although looking at the Q&A it appears we have no levers at all to influence the lending and selling).

What is frustrating for me is that in the new world we can only choose between "balanced" (A+ to E) and "conservative" (A+ to A).  My strategy has been to invest in C to E loans only, as I am prepared to accept the risk and volatility that goes with those loans in exchange for the potentially higher returns.  It would be good if in the new world FC could offer a "Risky" (I'm sure FC's marketing team can find a less emotive word) autobid option that only invests in C, D and E loans.

On the Autosell: does anyone know how the FC algorithm will choose which parts to sell on your behalf?  Will it apply a FIFO, LIFO or random approach?

Yes "quality of the black box" is very important. There is much discussion on Zopa+ as to just how much you have to invest to get the estimated returns. With 4,000 loans I am getting the target 6%+, however many with smaller amounts are underachieving. See thread another bad month or similar.