r00lish67
Member of DD Central
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Post by r00lish67 on Aug 21, 2017 17:01:11 GMT
I was extremely disappointed with this morning's news. I don't use Autobid, as I prefer to look through the loan offers, more likely to invest in a tea-room in Penzance, say, than yet another startup IT consultants in London! :-) But seriously, one of my main gripes about Autobid is that the amount bid is specified as a percentage of your total investment. So even at the minimum 0.25%, if you have more than 16,000 invested, you will be stuck with £40 loan-parts, which will be very difficult to re-sell. I believe they really should allow us to specify a (maximum?) bid value. And I'm appalled that I will no longer be able to specify individual loans that I want to sell. If a borrower is repeatedly late in their repayments, I will offload that loan. Is that unfair? I am not forcing anyone to take on my loan, just offering it up for sale. Others might be more willing to stick with it, especially if it is a high interest rate. But now I will be stuck with it, and if my fears come true and that company folds, then I'm stuck with the loss. Thanks! I understand many people (the majority, by all accounts) just want to put their money in and forget about it. Fine, I can understand that, but there are those of us with more time on our hands that enjoy the manual selection process. There are any number of P2P companies that provide the automatic fund, but FC is rare in offering this different, manual, product. There is talk about fairness. I don't know how the autobid system works, but if people using it weren't getting to the D and E risk loans, then surely that is a problem for the FC computer people to sort out with their system? They have acknowledged that some people might want very safe investments, so are offering the A/A+ only option, but as another commentator has said, they've not allowed those of us who want the higher risk/reward B-E loans the ability to opt out of A and A+ - something you can at least do now. Property development loans seem to polarise opinion. I believe there are people who love them, and certainly when I've put up such loan-parts, they've been snapped up quickly. I can see the attraction, you are literally investing in bricks and mortar! When (and note I say "when" !) they are late repaying, they are charged an extra 2%, so it seems terrific. But I find them frustrating, keeping a record of what loans I have, these outstanding loans mess up the spreadsheet! :-) There were things about their system that I would have liked to see tweaked, but this total change to the way it works is very unwelcome. Some good points, of which I agree with most. I would say however that you'll generally have no problem selling £40 loan parts. I regularly sell £500+ loan parts, even at premiums (or at least, I used to  ) There are plenty of larger investors out there who'll happily buy your parts at par.
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easylender
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Post by easylender on Aug 21, 2017 17:04:23 GMT
In what way will this platform be P2P? Can I ask the moderators to consider either creating boards for Barclays, RBS, etc or removing FC from the forum? In my opinion what qualifies as a peer-to-peer lending platform is one where the loan agreement is between the lenders and the borrower and their funds are ring-fenced from the platform. So in the event of platform failure the platform's creditors have no call upon the funds of borrowers or lenders, and the loans can continue to be managed by another party. It's nothing to do with whether or not lenders can choose who they lend to.
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adrian77
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Post by adrian77 on Aug 21, 2017 17:16:45 GMT
ref
so FC admit to coding an unfair system - ordinary people doing extraordinary things - yeah right!
Maybe it is just me but I get the definite impression this has not exactly gone down well....
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adrian77
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Post by adrian77 on Aug 21, 2017 17:28:14 GMT
There are now 40 pages on the secondary market
Here's an example of a D (yes D rated loan of 4.1% with £2/2%+ premium
4.1% £**.** £2.** (2.*%)
Think that protects the seller!
Any takers - oh come on, it's a steal!
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Post by GSV3MIaC on Aug 21, 2017 17:35:36 GMT
It's not gone down well with the folks on the forum who like to spend time selecting loans to buy, and loans to sell (at a premium, hopefully) and trying to 'beat the odds' - i.e. achieve > average return.
It'll go down a storm with the 95%+ who are not on the forum, who just want a simple 'fire and forget' investment system, without finding themselves on the thin end of the deal (i.e. worse than average return) because they were not smart, lucky, computer literate, or had time to apply.
Much the same was true when we moved to fixed rates, and letting autobid buy 100% of loans.
Yes, it'd be nice if everyone could have (as some US president was rumoured to have suggested once) an above average return, but averages don't work like that.
I still fear that 'whole loan' buyers are getting a sweetheart deal, and maybe beating the rates we are offered, but that's the advantage of having £100m+ to deploy (on most platforms). It'll sure be cheaper for FC, and hey, maybe their IT folks can actually build a functioning system, if it's simple enough.
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Post by gadget on Aug 21, 2017 17:54:00 GMT
In my opinion what qualifies as a peer-to-peer lending platform is one where the loan agreement is between the lenders and the borrower and their funds are ring-fenced from the platform. So in the event of platform failure the platform's creditors have no call upon the funds of borrowers or lenders, and the loans can continue to be managed by another party. It's nothing to do with whether or not lenders can choose who they lend to. That's really just secured lending. And how can the agreement be between the lender and borrower when neither of them know who the other is or are part of any decision making process? Removing even the option of the lender actually deciding who to lend to in my mind makes FC join the other big "p2p" lenders in really just being funky new fund managers who play table tennis rather than wear suits. Though to be fair Ratesetter wear suits and don't play table tennis which maybe explains their recent old skool (ie 2008) shenanigans.
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Post by spiker on Aug 21, 2017 18:11:13 GMT
I am all game that you have no choice on what to buy, and its a level playing field on who is allocated what by the autobid.
However you should be able to select exactly what grade you want to buy (A+,A,B,C,D,E)
And the sell functionality should allow you to offload ANY loan if you don't like the look of it. (surely this is what investing is all about)
And obviously autobid wouldn't then buy back anything you have previously offloaded.
Surely thats a fair system.... not the one proposed.
Similar to what we have currently but a fairer distribution of loans without having to be logged in 24/7 to pickup D,E's
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TonyL
Posts: 53
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Post by TonyL on Aug 21, 2017 18:25:11 GMT
It's hard to believe that FC's software/algorithms are up to this task given how flakey their IT systems appear sometimes.
1. They say that the investments are still subject to £20 minimum per company. So let's say you've invested £10000 you'd be looking at approximately £100 per week to reinvest (interest + capital repayments) and their algorithm is going to automatically reinvest that for you, presumably as it drips in. So every couple of days or so it's going to choose just one loan for you...on what basis? FC can have a hundred new loans to fill in a day and it's going to pick one for you. If you've selected the balanced portfolio does it simply rotate A-E each day to keep you balanced? Or will it be random in which case you could end up with a whole pile of risky E's or underperforming A's.
2. Will it choose to simply buy something from the sellers market for £5 when you have £5 in your account, or wait until it reaches £20 and invest from the new loans pot?
3. If you have over £20000 portfolio and add a further £5000 cash into your pot, will it blow the whole lot in £100 chunks (as stated 0.5% max)? If so how does it automatically sell those for you if the majority of investors are having their pots held at sub £20 investing in all the new loans.
I have zero confidence in FC having a) thought this through and b) having an algorithm that will work.
Cards on the table...I exited from FC earlier this year (with only the obligatory £1000 of defaults waiting to pay back or fold), but this sort of change by FC wouldn't exactly encourage me back in. Very poor.
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Post by GSV3MIaC on Aug 21, 2017 18:48:01 GMT
And the sell functionality should allow you to offload ANY loan if you don't like the look of it. (surely this is what investing is all about) And obviously autobid wouldn't then buy back anything you have previously offloaded. Offload to WHO, exactly, given there is no mechanism for people to decide what to buy (or not to buy) .. you don't want it so someone else should have it, and you reckon that is fair? Now if you had to give a 10% discount to unload a particular part, and people could choose whether or not to buy such 'dented' parts, that might qualify, (or even the variable pricing seen elsewhere) but the current 'autobodge will buy anything at par or better' is not fair on the autobodge users if people can selectively sell. I mean ideally I'd autobuy everything (especially Ds and Es) and then autosell it at ~6 months (a system which has worked for many to 'beat the odds') .. trouble is someone is on the smelly end every time.
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registerme
Member of DD Central
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Post by registerme on Aug 21, 2017 18:53:08 GMT
It's hard to believe that FC's software/algorithms are up to this task given how flakey their IT systems appear sometimes. 1. They say that the investments are still subject to £20 minimum per company. So let's say you've invested £10000 you'd be looking at approximately £100 per week to reinvest (interest + capital repayments) and their algorithm is going to automatically reinvest that for you, presumably as it drips in. So every couple of days or so it's going to choose just one loan for you...on what basis? FC can have a hundred new loans to fill in a day and it's going to pick one for you. If you've selected the balanced portfolio does it simply rotate A-E each day to keep you balanced? Or will it be random in which case you could end up with a whole pile of risky E's or underperforming A's. 2. Will it choose to simply buy something from the sellers market for £5 when you have £5 in your account, or wait until it reaches £20 and invest from the new loans pot? 3. If you have over £20000 portfolio and add a further £5000 cash into your pot, will it blow the whole lot in £100 chunks (as stated 0.5% max)? If so how does it automatically sell those for you if the majority of investors are having their pots held at sub £20 investing in all the new loans. I have zero confidence in FC having a) thought this through and b) having an algorithm that will work. Cards on the table...I exited from FC earlier this year (with only the obligatory £1000 of defaults waiting to pay back or fold), but this sort of change by FC wouldn't exactly encourage me back in. Very poor. Clarity around the buy / sell algorithm, the circumstances it operates in, what constraints (if any) can be employed, and what any thresholds might be, would be very useful indeed.
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adrian77
Member of DD Central
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Post by adrian77 on Aug 21, 2017 19:01:17 GMT
ref 'fire and forget' maybe but I suspect it will be "fire, forget and see a pathetic return".
Granted the losses will be more even but what have FC got to lose by having even more shaky investments lumped in with better ones? To me this is basically a junk bond based on unsecured loans - why not invest in other p2p companies who have a better web site, secured lending and a provisional fund?
I used to enjoy investing in FC but now I wash my hands of them - funny thing is I think the original auction model could have worked well. I see the latest offering as little better than Greek Government Bonds...in fact Greek Bonds are now paying 5.6% which I suspect will be more than FC investors will get! What's next - scrap the private investor and simply lend to institutions...
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bg
Member of DD Central
Posts: 1,368
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Post by bg on Aug 21, 2017 19:02:36 GMT
It's hard to believe that FC's software/algorithms are up to this task given how flakey their IT systems appear sometimes. 1. They say that the investments are still subject to £20 minimum per company. So let's say you've invested £10000 you'd be looking at approximately £100 per week to reinvest (interest + capital repayments) and their algorithm is going to automatically reinvest that for you, presumably as it drips in. So every couple of days or so it's going to choose just one loan for you...on what basis? FC can have a hundred new loans to fill in a day and it's going to pick one for you. If you've selected the balanced portfolio does it simply rotate A-E each day to keep you balanced? Or will it be random in which case you could end up with a whole pile of risky E's or underperforming A's. 2. Will it choose to simply buy something from the sellers market for £5 when you have £5 in your account, or wait until it reaches £20 and invest from the new loans pot? 3. If you have over £20000 portfolio and add a further £5000 cash into your pot, will it blow the whole lot in £100 chunks (as stated 0.5% max)? If so how does it automatically sell those for you if the majority of investors are having their pots held at sub £20 investing in all the new loans. I have zero confidence in FC having a) thought this through and b) having an algorithm that will work. Cards on the table...I exited from FC earlier this year (with only the obligatory £1000 of defaults waiting to pay back or fold), but this sort of change by FC wouldn't exactly encourage me back in. Very poor. I imagine it will work in exactly the way autobid works at the moment. Seems to work ok.
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fasty
Member of DD Central
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Post by fasty on Aug 21, 2017 19:02:39 GMT
It's hard to believe that FC's software/algorithms are up to this task given how flakey their IT systems appear sometimes. 1. They say that the investments are still subject to £20 minimum per company. So let's say you've invested £10000 you'd be looking at approximately £100 per week to reinvest (interest + capital repayments) and their algorithm is going to automatically reinvest that for you, presumably as it drips in. So every couple of days or so it's going to choose just one loan for you...on what basis? FC can have a hundred new loans to fill in a day and it's going to pick one for you. If you've selected the balanced portfolio does it simply rotate A-E each day to keep you balanced? Or will it be random in which case you could end up with a whole pile of risky E's or underperforming A's. 2. Will it choose to simply buy something from the sellers market for £5 when you have £5 in your account, or wait until it reaches £20 and invest from the new loans pot? 3. If you have over £20000 portfolio and add a further £5000 cash into your pot, will it blow the whole lot in £100 chunks (as stated 0.5% max)? If so how does it automatically sell those for you if the majority of investors are having their pots held at sub £20 investing in all the new loans. I have zero confidence in FC having a) thought this through and b) having an algorithm that will work. Cards on the table...I exited from FC earlier this year (with only the obligatory £1000 of defaults waiting to pay back or fold), but this sort of change by FC wouldn't exactly encourage me back in. Very poor. Clarity around the buy / sell algorithm, the circumstances it operates in, what constraints (if any) can be employed, and what any thresholds might be, would be very useful indeed. I'm quite sure that it will be conveniently proprietary
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Post by spiker on Aug 21, 2017 19:07:57 GMT
And the sell functionality should allow you to offload ANY loan if you don't like the look of it. (surely this is what investing is all about) And obviously autobid wouldn't then buy back anything you have previously offloaded. Offload to WHO, exactly, given there is no mechanism for people to decide what to buy (or not to buy) .. you don't want it so someone else should have it, and you reckon that is fair? Now if you had to give a 10% discount to unload a particular part, and people could choose whether or not to buy such 'dented' parts, that might qualify, (or even the variable pricing seen elsewhere) but the current 'autobodge will buy anything at par or better' is not fair on the autobodge users if people can selectively sell. I mean ideally I'd autobuy everything (especially Ds and Es) and then autosell it at ~6 months (a system which has worked for many to 'beat the odds') .. trouble is someone is on the smelly end every time. How is it not fair?, What looks bad to me might be acceptable to the next man. Thats called judgement. If the next man who gets it in his portfolio via autobid, if he doesnt like then he can also sell. thats a fair market in my view...
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Post by GSV3MIaC on Aug 21, 2017 20:10:07 GMT
Your 'system' requires there to always be a buyer whether they like it or not .. basically 'pass the toxic parcel and hope someone else is holding it when it implodes'. It favours someone who actively manages their portfolio every week, day or ideally nanosecond, to comb out the toxic junk .. note the word 'favours', which implies 'unfair'. If you reckon you can beat the system by deciding what to sell when, then you are also implying the lucky recipients of what you sell are going to come out worse than if you didn't have that option.
Saying 'yeah well they can do the same to someone else' doesn't actually address the issue, just kicks it down the road.
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) There are plenty of larger investors out there who'll happily buy your parts at par.
