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The major difference* is that you don't know how much is being invested in loans and how much is being held back in cash at any one time. How the company decides on appropriate cash levels and when.

Why is this in any way a problem? Having a cash reserve structured into an investment product reduced risk, increases liquidity and also enhances the products ability to invest in new investment opportunities. This is exactly the way I structure my SIPP and for similar reasons so to me this makes perfect sense. As to how much in the QAA is in cash I am sure that there are very few investors that would be able to make any meaningful use of any data that could be provided by AC without an intimate understanding of how the AC platform operates and it's transaction volumes etc, something that AC would never reasonably be expected to make public so I feel this is a mute point

What types of loans it invests in: whether it is short term or long term investments, what maximum amounts are apportioned to each loan or each lending class in stressed scenarios 

Well as Andrew described loan types vary and again may represent commercially sensitive information to disclose publicly. Loan term again is a varying feast and anyway with all Zopa and RateSetter products you never know what terms you are buying into anyway. Actually if you compare AC, RateSetter and Zopa I would certainly put RateSetter and Zopa in the P2P for non-sophisticated investors in terms of how they are marketed rather than AC, however these companies products provide almost no information about who you are lending to, it could be a car loan, a BTL, an unsecured SME loan, someone buying a mobile phone or almost anything so how can you make any meaningful judgement on risk. In fact RateSetter and Zopa are free to develop new lending channels to totally different risk categories without any lender ever knowing about it or in fact every being told. If you want to estimate the loans sitting behind the QAA go and pick a random 100 out of the last 200 loans and that should give you a better idea of the underlying risk than you will get on the other plaforms

(AC doesn't have as many loans as Ratesetter or Zopa do at any one time so lack of any information on diversification may be a serious issue).

Loan diversification obviously has a place in the risk profile and you are right to mention it but as you are investing in a loan pool every investor has the same percentage exposure to each loan. More importantly, the reason loan diversification is so important with RateSetter and Zopa is that most of their loan are unsecured so risk of capital loss on default is very high. AC QAA loans however, as well as having a Provision Fund are all secured loans as well , most on property so you capital risk profile is totally different and does not stand up to comparison with the lending done by RateSetter and Zopa.


Who ranks where in case of bad debts, holding which loans.

All QAA investors are equal and all have equal rights to asset recovery and PF protection

Moreover, the company has said (correct me if this is wrong) that it engages in short term trading with those loans to facilitate liquidity (I don't believe any other company does this?).

Why would you think that it would not do this? it would be essential to buy into new loans, increase diversification as the number of loans on the platform increases, spread risk into other asset classes. In all honesty the fact that other companies do not (or more likely cannot) do this is not a negative of AC QAA, it is a positive.

The company states that the account is aimed at the more inexperienced investor and I maintain that you have to have much more experience and understanding in order to begin to get your head around this product and judge whether the rate on offer is sufficient compensation for the risks.

As I suggested above, I see the total black box nature of simple-to-use offerings from the like RateSetter and Zopa (which, I would like to point out I also have investments in both these platforms) in predominantly unsecured loans that you will never know the borrower or their risk profile/credit rating, asset class, term, securing assets (or not) etc as far harder to ever understand in terms of where your money is, how at risk is it, when it is likely to come back and so on. I do this for some of my investment and it requires endless spreadsheet manipulation to get just the basic information of what constitutes you loan portfolio. As I said earlier, if you want a good idea of the assets underpinning the QAA, go and look at the loan book as about 50% of the loans there make up the QAA.

Lastly, peer2peer investments are highly illiquid by their nature and most other companies I am aware of, don't try to attempt to mould this fact into something that it cannot be, in their product offerings, through 'clever' modelling which the company said is akin to a 'blackbox'.

I was going to describe how liquid most P2P platforms are under normal market conditions and how easy (and cheap!) it is to buy and sell loans but Chris already did that. You can't say the same for the stock market with all the broker fees etc. Many companies do try and shape there offerings to meet different requirements, Zopa do it, Ratesetter do it, LandBay do it, Wellesley do it (I think) where longer-term loans are wrapped into short-term products.

But as long as it 'works', I will continue to receive abuse and threats.

*I am not a fan of these models either (though see them as different to QAA) and it looks like Ratesetter may have 'modelled' their assumptions inaccurately, looking at the speed at which the provision fund cover is decreasing.

Agreed, but bottom line for me on this is this: RateSetter and Zopa are well and truly aiming their products (with the obvious exception perhaps of Zopa Plus) at the novice, unsophisticated user yet I believe these are products where risk is almost totally hidden from all but the most determined of sophisticated lenders. I do not see AC doing that in the same way. Their loan portfolio is there for all to see and the site is littered with warnings about capital risk and I am sure they have taken advice on the strength of the warnings etc to comply with appropriate legislation. 

Enough said, enjoy your evening.

If you do that then the funds are still being invested into the QAA, so there is still risk involved.  You're just telling the system to automatically withdraw those funds once they can be put to use elsewhere.

However this is an opt-in facility and people don't have to use it.  If they choose lenders can leave their funds sat idle in the cash account or MLIA and those funds won't touch the QAA or any account other than the one they explicitly transfer them into.

QAA sweeping is a convenience function for those that are happy with the account and would rather their funds weren't left idle if there is opportunity for them to earn some interest, albeit at a lower rate than they are targeting in the longer term.