Peer-to-peer lending sites: MSE guide discussion

shoi

What has happened is:

Several of the casualties appear to have been villains.

And I think all but one of the casualties*, despite the FCA mandated and approved "rundown plan" have just gone bust and fallen into the hands of receivers.  Yer average receiver is a vulture with zero conscience.  Their official job is to maximum recovery for the creditors, ie the people to whom the company owe money (the taxman, the office supplier etc), and we are not that.  So what they do is they run up huge bills treble checking our identity documents, the legal validity of the loan agreements, you name it.  To the point that even if a borrower does pay up the full agreed amount (and some borrowers are honest), then the receiver pockets half the money in admin fees.  And then seeing as if a recovered loan doesn't do the creditors any good (and they don't get their percentage), because the proceeds belong to us investors, they sell securities off cheap, so shafting us again, They don't get a penny extra by looking after investors interests, and so they don't bother.  If I had realised that "rundown plans" were an FCA authorised fiction I would never have got involved. 

I still have some faith in Assetz, Kufflink, Loanpad, Somo

* the good guys have been Bondmason, who shut up shop early (following the demise of collateral I think) and have since basically operated a recovery plan as advertised.

Aceace

Growth Street were also good guys IMO. They had an orderly closedown, returning all capital, interest and bonuses. 

Aceace

Sea_Shell said:

How's the P2P landscape looking these days in our post-Covid* world?

I've just read the last 5 pages of this thread and it was all looking a bit shaky there for a while.

Is confidence returning?



*Yes, I know it's still about, but hopefully the worst is now behind us.

Here's a link to my report on how my P2P portfolio performed in the last calendar year, with quarterly updates further into the thread: https://p2pindependentforum.com/post/414901/thread. 

cfw1994

Aceace said:

Sea_Shell said:

How's the P2P landscape looking these days in our post-Covid* world?

I've just read the last 5 pages of this thread and it was all looking a bit shaky there for a while.

Is confidence returning?


*Yes, I know it's still about, but hopefully the worst is now behind us.

Here's a link to my report on how my P2P portfolio performed in the last calendar year, with quarterly updates further into the thread: https://p2pindependentforum.com/post/414901/thread. 

Wow - I never realised there were so many P2P options out there!
We have a teeny tiny amount in Kuflink - they appear very solid to me, doing exactly what they say in the tin, yet still it is a negligible % of our worth: maybe I should look more into this stuff....

Sea_Shell

What percentage of peoples overall portfolios do you all have in P2P.

If I do invest, it'll probably be only 1% of our overall portfolio, in the short term initially.

cfw1994

Sea_Shell said:

What percentage of peoples overall portfolios do you all have in P2P.

If I do invest, it'll probably be only 1% of our overall portfolio, in the short term initially.

As mentioned….ours is teeny!  Less than 1% of our non-pension assets 😜
Probably should invest more to make it worth keeping tabs on, tbh….mind you, we have 0% in crypto, which feels like a boat that passed me by 🙄

Interested to hear what others have.

Alexland

0% in P2P and only ever contributed enough to get various signup bonuses. Just don’t like the sudden 100% loss risk. Might have also missed the boat with crypto but expect to achieve our goals without needing to speculate in such areas. Very comfortable with equities even in the 2000s when valuations were mostly going sideways so rather than diversify into unwanted assets my plan is just to build up enough in equities that the natural yield gives a high margin of safely.

itm2

Alexland said:

... my plan is just to build up enough in equities that the natural yield gives a high margin of safely.

As a matter of interest, what did you mean by "the natural yield"?

Alexland

itm2 said:

As a matter of interest, what did you mean by "the natural yield"?

The regular dividend income produced by the underlying fund holdings. With adequate diversification between geographies and sectors it tends to be fairly stable. So with enough in equities and a cash buffer there is low chance of getting into a sequence of returns type problem as the capital shouldn't need selling down whatever the valuation.

Aceace

Sea_Shell said:

What percentage of peoples overall portfolios do you all have in P2P.

If I do invest, it'll probably be only 1% of our overall portfolio, in the short term initially.

In case you didn't know, the FCA places a limit of 10% of a retail investor's investable assets in P2P. See here https://www.fca.org.uk/news/press-releases/fca-confirms-new-rules-p2p-platforms.

I understand the aim of it is to stop people over-committing to investments where they don't properly understand the risk. But its a ridiculously blunt tool IMO. For a start, it only applies to one's first investment in P2P, as once you've made one investment you are considered to be a "sophisticated investor" rather than a "retail investor". And there's no such restriction to stop you investing all of your assets in a single company share, or putting it all on red at the casino.

The short answer to your question is that I have roughly 50% of my portfolio in P2P. It's not something I'd recommend as it takes a great deal of time and effort to maintain my highly diversified P2P portfolio. It's become a major hobby of mine, so I'm very happy to spend that time doing something I enjoy, and it suits my needs very well of producing a very steady income between early retirement and pensions kicking in. There are many other traditional ways of achieving a similar result, but I don't find them as interesting or satisfying as P2P.

I think that starting with 1% of your funds is a good idea to see if it suits you. Personally, I started with 0% for a year while I did a paper exercise to see how things would pan out. It turned out to be a good idea as I managed to avoid many of the sharks in the water at that time. I believe there are far fewer sharks right now, but it's entirely possible that I just haven't noticed the fins yet.