r00lish67
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Post by r00lish67 on Aug 30, 2017 13:25:32 GMT
The bad debt long tail is something I'd not anticipated with p2p. On FC I've sold everything I can, but am stuck with 7% of my initial investment in the system, 2/3 in defaults, 1/3 in downgrades. If I view that as all lost, my return over the year was 4%, a disappointing return compared with other p2p sites, but still better than a bank. Recoveries so far have been meager, but I guess things will pick up, but its frustrating that some downgraded loans are paying reliably now, but I'm stuck with them for 4 years as a rump investment. One of the attractions of a bank, and a reason they can only offer lower returns, is that they guarantee to give you all your money back on demand. If FC become more bank-like, with their risky/safe auto buy/sell, will they allow complete liquidation on demand, writing off bad debt, or will you be stuck with it, as now. I haven't seen anything totally definitive, but the logical assumption is that it would still work as today. Otherwise, anyone who was unfortunate enough to get a disproportionate lot of bad eggs would withdraw their lot, thereby passing the bad eggs on to someone else, until they withdraw...and so on and so on. ..Which raises the other point I'm not sure if we've mentioned, re: liquidity. It seems a distant prospect at present, but with variable pricing eliminated then if FC suddenly becomes drastically unpopular then presumably autosell would become auto-er-queue? Edit: I have now seen something totally definitive, in the new T's and C's: 10.4. To meet your transfer request, the Funding Circle Platform will automatically attempt to select eligible Loan Parts for sale and transfer to other Investors. Loan Parts that are not eligible for transfer and that cannot be bought or sold are those: if there is one repayment remaining; if the internal risk band classification of the Loan has changed; which are late or in default; which are part of a loan securitisation exercise. Edit2: Also, the definitive "you can totally autosell anytime you want, unless you can't" blurb from the same source: 10.6. There is no guarantee that your Loan Parts will be transferred, nor any assurance as to how long it may take to do so. If a transfer has not been successful within 60 days after you make your request, we will delist the Loan Parts from the secondary market of the Funding Circle Platform. We will notify you if the transfer is not successful and you will continue to be the Investor in respect of the unsold Loan Parts.
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ceejay
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Post by ceejay on Aug 30, 2017 15:16:32 GMT
Really? I must have missed them. All that I have seen are fixed rate invest-and-forget type. With the possible exception of the AC Manual fund, which had a much smaller range of loans to choose from, FC was the only company allowing "stock market" type trading. You might want to have a look at ablrate - although they have a very small selection of loans to play with, I think it's what you are looking for.
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Post by GSV3MIaC on Aug 30, 2017 15:56:21 GMT
Yep, ABLRate has a fully functional (if clunky) SM where you can try to buy/sell to a profit. So does ReBS, but I'm not sure I'd recommend that to anyone, based on my personal experience (but some people swear by it .. then again some swear at it).
Depends what you are looking for .. horses for courses (and some of the horses are goats, elephants, or camels, so it matters quite a lot what you are trying to achieve). None of these others are in the 'too big to fail' category that FC likes to believe it is in, which means they are occasionally forced to actually listen/talk to their customers. The horror!!
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Post by dan1 on Aug 30, 2017 17:00:42 GMT
Also Huddle Capital - built from the same system (although older release) as Ablrate
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Post by df on Aug 31, 2017 3:02:14 GMT
Apologies if this has already been mentioned - I've lost track after 20 pages of comments! Word on the streets is that these changes - unwelcome to many, especially here - were a result of several pesky little devils using "bots" to apply multiple bids very fast on the high value loans, hence removing their availablilty to everyone else :-( I'm still rather surprised that "Autobid" was so slow, and/or that loans were put online before Autobid had been through for first pickings. But, it is what it is. So thanks you guys, in order to make a little profit - and honestly, surely it really was a little profit? - by taking the p... and abusing the system, you've ruined it for the rest of us! Bah, humbug! ... They want granny Doris feeling confident enough to put her £20k life savings in because she knows she will get 7-7.5% return per year with no effort and thats only going to happen if its deposit and click one button. If she had logged on to see auctions for dozens of loans and a SM with thousands of loans on sale all with confusing financial data it just wouldn't have worked. I don't think its any coincidence they seem to be ramping up the advertising effort right about the time these changes are coming in. I would think for any platform once it gets to a certain size its easier for them to go down this route. They just don't need the type of people who like to manage their loan books manually (and they need the grief even less) In deed, there is a huge market for smaller investors. Not only "granny Doris", but also people with some spare cash who simply have no time to engage in loan hunting across platforms. They want a 'savings account' that pays better rates. New FC product will be on the top of the list.
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c88dnf
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Post by c88dnf on Aug 31, 2017 10:21:32 GMT
... They want granny Doris feeling confident enough to put her £20k life savings in because she knows she will get 7-7.5% return per year with no effort and thats only going to happen if its deposit and click one button. If she had logged on to see auctions for dozens of loans and a SM with thousands of loans on sale all with confusing financial data it just wouldn't have worked. I don't think its any coincidence they seem to be ramping up the advertising effort right about the time these changes are coming in. I would think for any platform once it gets to a certain size its easier for them to go down this route. They just don't need the type of people who like to manage their loan books manually (and they need the grief even less) In deed, there is a huge market for smaller investors. Not only "granny Doris", but also people with some spare cash who simply have no time to engage in loan hunting across platforms. They want a 'savings account' that pays better rates. New FC product will be on the top of the list. Cue media outrage and adverts on the TV ("did you have PPI P2P?") in 3-4 years when "granny Doris" finds that she hasn't achieved the headline return and/or can't get all her money out because some of it has been lent without adequate checks.
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Post by preacherman100 on Aug 31, 2017 12:17:15 GMT
Few questions on the changes.
1. What happens to existing loans in FC.
2.What happens to money in my account paid back from existing loans from 18th September if I select neither investment option.
3.If I do select an option can I still see when a repayment is due on each new investment my money gets automatically put in-as I like to see what is due on any given day in the month.
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adrian77
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Post by adrian77 on Aug 31, 2017 13:15:21 GMT
Exactly - I hate to say this but maybe the banks lend at high rates for a reason i.e. they know the risks..granted they are greedy and immoral but the fact remains such loans are unsecured debt! Even the sub-prime mortgage debt was "secured" albeit on unfounded house price rises and people's ability to repay it. If people switch away from FC (I think one or 2 of us might just just done this) then how this will affect the FC business model? I have no idea but I doubt it would be positive.
Not being political but I really don't think the government have properly regulated the market and thought this one through - well it would not be a first!
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Post by jackpease on Aug 31, 2017 13:32:19 GMT
I'd love the choice to invest in unregulated p2p with high interest and high defaults and not have to subsidise others who just want the high interest and claim they were misled in a few years time.
those of us who refused to take on PPI we thought about it was bad value for money pay for those that got the protection insurance AND the refunds, and while some may be justified, I suspect most weren't
Jack P
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blender
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Post by blender on Aug 31, 2017 13:45:03 GMT
Few questions on the changes.
1. What happens to existing loans in FC.
2.What happens to money in my account paid back from existing loans from 18th September if I select neither investment option.
3.If I do select an option can I still see when a repayment is due on each new investment my money gets automatically put in-as I like to see what is due on any given day in the month. 1. Nothing different unless you instruct FC to sell (transfer) loans to the value of 'x'. Then they choose which loans to sell. 2. It goes to available funds and you may withdraw it. 3. No changes to visibility have been announced. You should be able to see repayments due, whether you select an option or not. No reason to remove visibility even if you do not agree the new T&Cs. There are likely to be further general changes in visibility downstream, say in the loan details and 'auction'. One thing to bear in mind is that placing restrictions on a particular class of lender, what they may see or do according to whether they have ticked this or that combination of boxes, actually causes development work for FC, which they would rather avoid.
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Post by hobbitcz on Aug 31, 2017 21:43:42 GMT
How is it possible that P2P operators will never learn. Bondora was such great site where you can get decent returns by handpicking loans, but then they start introducing the same changes as FC and ended up with autoinvest blackbox with much lower returns than promised. Their growth nearly stopped and slowly they come back with everything, but it is so difficult to win investors again. FC is going the same doomed path. Don't understand it, never can understand it...
This is end of my FC investments for me.
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c88dnf
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Post by c88dnf on Sept 1, 2017 13:37:40 GMT
When FC announced their changes they asked for feedback about them. I responded indicating displeasure and asked for more details about how their headline returns were calculated. FC have now replied as follows (various bits of marketing fluff stripped out). The reply may be of interest to those considering investing after Sept 18th.
>>>>
In regards to the projected return of 7.5%, this is for the 'Balanced' lending option and a projected return of 4.8% for the 'Conservative' lending option. The projected annual return for the overall Funding Circle loanbook, after fees and bad debt, will be 6.7%. Changes to the proportion of investors who choose each lending option may change the projected returns shown.
The new Autobid will only look at loans purchased after the 18th September, the current make up of an investors portfolio will not affect which loan parts Autobid selects. Form the 18th September onward Autobid will work to build a portfolio of loans which give an estimated fully diversified net return of 7.5% for balanced and 4.8% for conservative.
The algorithm behind the lending tool will buy loans that will most effectively help the Investors portfolio reach the projected return of the lending option they selected from when it was turned on, 7.5% for balanced and 4.8% for Conservative. It will ignore any existing loan parts that an Investor holds which will be not be considered in calculating the new return.
>>>>
Note that the overall portfolio payback is estimated at 6.7% and assumes that a good percentage of new lending will be "conservative". If that isn't the case, the 7.5% is clearly unachievable. Note too that your existing loans will not be factored into the return calculation, nor future autobids.
I aim to exit all current loans (all late or in default) and then see how the land lies early in 2018. I suspect curiosity will lead me to risk £4000 at the greatest level of diversification possible (0.5% per loan IIRC) and track what happens.
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kaya
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Post by kaya on Sept 1, 2017 16:21:55 GMT
Few questions on the changes.
1. What happens to existing loans in FC.
According to the latest newsletter.... These changes will only affect new lending and selling after 18th September, and will not affect any existing loan parts you own. This clearly suggests that we will still be able to pick current individual loan parts to sell. The 60 day selling period now available to us backs this up.
c88dnf '' I aim to exit all current loans (all late or in default)''
I would love to know how to do that!
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blender
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Post by blender on Sept 1, 2017 16:41:22 GMT
Few questions on the changes.
1. What happens to existing loans in FC.
According to the latest newsletter.... These changes will only affect new lending and selling after 18th September, and will not affect any existing loan parts you own. This clearly suggests that we will still be able to pick current individual loan parts to sell. The 60 day selling period now available to us backs this up.
c88dnf '' I aim to exit all current loans (all late or in default)''
I would love to know how to do that!
'New lending and selling' is not the same as new loans. Anything you have for sale at par on 18th will remain for sale, but they cannot be bought manually, just by one of the two new Autobid options. And you will not be able to manually list for sale old loan parts after 18th. That would be 'new selling' and the buying of it would be 'new lending' for the buyer. The old parts are unaffected in that they are not divvied into smaller parts and they do not affect the buying behaviour of your new Autobid. That's how I understand it.
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kaya
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Post by kaya on Sept 1, 2017 16:52:04 GMT
You may well be right blender even though the blurb clearly states These changes... will not affect any existing loan parts you own. |
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